You might be turning away good money without realizing it. You might also be leaving your clients exposed to coverages that you could have helped them purchase. If you’re not embracing cross-selling and account rounding, you’re doing both yourself and your clients a disservice.
CROSS-SELLING AND ACCOUNT ROUNDING
Before we get into the benefits of cross-selling and account rounding, let’s define the terms:
- Cross-selling occurs whenever you sell a new category of insurance business to an existing client. For example, you offer commercial clients the opportunity to purchase employee benefits or homeowners.
- Account rounding involves offering additional products within the same lines of business. For example, you might offer a client with general liability insurance the opportunity to purchase excess liability coverage, cyber liability coverage or employment practices liability.
- Upselling is another related [mechanism]. In insurance, it might involve offering a policy with more bells and whistles, such as enhanced endorsements or a higher limit. For example, many business owners first bought $1M of Cyber insurance and today we increased their limit to $3M.
WHY IT’S SMART TO OFFER MULTIPLE INSURANCE PRODUCTS
It’s generally accepted that it costs more to acquire a new customer than it does to retain an existing one. How much more will depend on the industry and the company’s cost of acquisition, but an article from Harvard Business Review says acquiring a new customer has been pegged as anywhere from five to 25 times more expensive than retaining an existing customer. Even on the lower end, that’s a huge cost difference.
There’s also the Pareto Principle, also called the 80-20 rule. According to Investopedia, this rule asserts than 80% of outcomes are the result of 20% of causes. When applied to business and sales, this rule indicates that 80% of your profit will come from 20% of your customers. Given this, it makes sense to focus on the top 20% of your clients in order to secure the best ROI.
CROSS-SELLING AND ACCOUNT ROUNDING CAN BOOST CLIENT SATISFACTION
You’re the insurance expert. Your clients might not know what insurance products they need. They might not even know that they don’t know about certain products.
Let’s say a client comes to you for a business owner policy. You provide some options and close the sale, but you don’t offer anything else. Several months later, the client experiences a cyberattack, and that’s when they realize they don’t have sufficient coverage. Now they’re mad that you didn’t offer a cyber insurance policy. Or maybe the owner experiences is sued by an employee for wrongful termination and wishes you’d offered employment practices liability insurance.
Cross-selling can also help with retention. For example, let’s say you sell commercial insurance to a small business owner, but you don’t offer personal lines. The client goes to another insurance broker for those policies. Now you’re losing sales to another broker. Even worse, if that broker also happens to offer commercial lines, you’re also giving that broker a foothold to come in a poach your client.
BUT WHAT IF YOU DON’T HAVE EXPERTISE IN OTHER LINES OF COVERAGE?
You may be an expert in personal lines or workers’ compensation but have no idea about D&O or E&O coverages. Any good insurance broker will be well versed in all lines of coverage at a high level and should have expert relationships with people that can help. Offering a wide range of insurance products is important to build the relationship with your clients. You can always help be the quarterback, as long as you have a good team behind you.
In these scenarios, having a strong network partner can make all the difference. Your network not only offers market access to other products – they also function as your expert partner in helping you deliver the best possible solutions for your clients. A network partner can help you introduce new lines of business or develop niche programs that cater to specific industries.
When you join a quality network, you’re not alone. You have an experienced team by your side so can compete effectively and confidently.
YOUR NEXT STEPS
The advantages of cross-selling are clear. However, many organizations fail to meet their cross-selling goals. If you want to reach your goals, you need to strategize.
- Create a plan to review accounts for unmet needs. This can include looking for additional opportunities when a policy is placed as well as annual reviews and sustained cross-selling campaigns thereafter. Don’t let opportunities slip through the cracks. Regularly review your book to identify clients who may have other needs.
- Keep an eye out for specialized needs. For example, if you have multiple clients in the same specialized industry – or even just a single large client – it may make sense to look for specialty programs that cater to the industry.
- Secure access to insurance products. Obviously, you’ll need access to the various lines and specialty programs that you plan to cross-sell. Heffernan Network can provide access to national A-rated carriers and exclusive programs and products. We also offer large account support and outsourced fulfillment of lines of coverage outside your area of expertise, including life insurance, employee benefits, commercial lines, and personal lines.
Want to see how cross-selling and account rounding can help you grow your own revenue while better serving your clients? Start a conversation