Analytics and the Independent Insurance Agency
I just read a great piece in Forbes magazine about Jim Goodnight, CEO of SAS. SAS is the leader in high-powered analysis software.
SAS helps large to midsized business analyze their data so they can make better decisions. The author asked Jim the following question:
“What do businesses want to analyze today?”
Jim’s response was, “Businesses are looking at customer data to gain insights into cross-selling and up-selling.”
This sounds very familiar. It’s the old adage, “it’s cheaper to KEEP the customer you have than to acquire a new one”. Businesses are starting to realize that they need to objectively understand their customers better. Every customer leaves clues (data), based on their profile and behavior. If you can read these clues, you can tell how likely and when they are are ready to buy.
Start Collecting Data Today
In order to analyze data, you MUST have some way to collect it. For most agencies, that collection process involves their agency management system and their staff. After working with over 500 agencies and their data, I can tell you that most agencies do a poor job of ensuring that they are collecting as much accurate data on their customers as possible. Accurate data is essential to solid data analysis. Having a system to collect your customer’s profile and engagement with your agency is key.
There are several data points you can collect. One such point could be your customer’s policy profile (i.e. an auto policy and a home policy). Combine this with the customer’s online behavior (they visited visited your website and opened an email recently) and you have enough data to begin to predict customer behavior. You can actually develop a digital signature of each client and rank them accordingly. The is very similar to RFM ( recency frequency and monetary value) method of ranking customers.
With increased pressure from direct writers and lead gen companies, independent insurance agencies need to do all they can to KEEP the customers they already have. Being tuned into the profiles and online behavior of your customer base will give you a huge competitive advantage. This concept is not just taking place in the insurance industry, but one that small businesses are starting to leverage in increasing numbers.