Skip to main content

The Art of Customer Retention, Part 1

By May 4, 2021September 10th, 2021Charlie's Corner

Joey Coleman is an award-winning speaker who is an expert on customer retention and The First 100 Days®️ of a customer’s life. In part one of this episode Joey and Charlie talk about how to make a remarkable customer experience. After they cover that, Joey regals us with a personal story that has shaped his ideals in this space. The two also touch on what it costs to lose a customer. Overall, this episode wraps up with asking insurance agents to look in a unique spot to gain a customer…the ones you recently lost. Join us to learn more.

Joey Coleman and why customer retention matters

Edwin K. Morris (4s): Welcome to the trusted advisor podcast brought to you by Iroquois Group. Iroquois is your trusted advisor in all things insurance. This week, you’re listening to the special segment of Charlie’s corner hosted by our very own Charlie Venus. Welcome to today’s trusted advisor Podcasts.

Charlie Venus (23s): Yeah, and we have, as our guests, Joey Coleman, Joey helps companies keep their customers. He is an award-winning speaker and he shares his first 100 days methodology for improving customer experience and retention with the organization’s around the world. These include Whirlpool, Volkswagen Australia, and Zappos, his wall street journal number two bestselling book, Never Lose a Customer again, shows how to turn any sale into a lifelong customer. Welcome Joey.

Joey Coleman (54s): Thank you, Charlie. I so appreciate the introduction and I’m thrilled to be here too. And hangout with the other trusted advisors that love listening to your show.

Charlie Venus (1m 3s): Well, thanks. And we appreciate your being here. So first off, can you briefly tell us what sent you down the path of working with companies on how to make new clients and customers, lifelong customers?

Joey Coleman (1m 15s): Well, lets just say Charlie, that it was as, I like to describe it as an eclectic path that got me here are some might say that he can’t hold a job and I’ll explain that here in a bit, but more of, a lot of the story is I grew up studying government and international relations and went straight from college to law school where I studied national security law. I studied litigation, I studied international law. I worked for the white house I’ve worked for the CIA I’ve worked for the secret service. I then was a criminal defense lawyer for several years. I then taught at the postgraduate level, basically night school MBA courses. I ran a division of a promotional products company. I started and ran an ad agency for 15 years. And then about five years ago, I went all in on customer retention. Joey Coleman (1m 59s): Now the reason I did that is in all those jobs that I had had, what I realized is that most businesses, most organizations over index on getting new followers, new customers, new clients, and yet very few people were paying attention to how to keep those clients. I saw it in my ad agency in particular, we would drive all kinds of new attention, a new focus to a brand only to have them get folks to come in the door and run out the back door as quickly as we were bringing them in the front because they had no retention policies. They had no a strategic onboarding efforts going on. And so when I realized what a big gap there was in the market place, this was how few books had been written on the topic, how few speakers were addressing the topic, how few consultants were helping companies to figure these things out. Joey Coleman (2m 48s): I thought this could be an interesting way to take everything that I’ve learned in the past about humans and why humans do the things they do and apply it in a business context.

Charlie Venus (2m 59s): That’s a fascinating career that you’ve had. Now. One of the things that you talk about in the book and I, and, and just backtracking because we’re, you know, we’re in the insurance business and what you just said about the customer Retention certainly applies to the insurance industry, independent insurance agencies and brokers put so much emphasis on bringing in new customers and paying their sales people to get out there and, and bring in that new business. But they really don’t pay attention to the stuff on the back end. You know, in your book, you talk about a remarkable customer experience and you know, on a number of occasions, but the ones that really stood out was the experience you had with the dentist and the new dentist you went to, when you relocated from DC to Colorado, could you tell us a little bit about that experience?

Joey Coleman (3m 50s): Well, absolutely. Charlie, you know, its interesting when I asked people around the world, when I am giving speeches, when I’m doing presentations, what experience have you had? That is the worst experience you’ve ever had with a brand. And I say this respectfully, to all my friends who are dentists, dentists often get talked about insurance agents, not so far behind to be fully transparent, but dentists is often the thing where not A lot of people are raving about their dental experience and to make a very long story short, I have just moved to town. I’m living in Denver, Colorado. I really don’t know a lot of people there. I certainly haven’t establish new relationships with healthcare providers and I bite into a piece of candy and my back molar explodes. Joey Coleman (4m 35s): I’m in an incredible amount of pain, long story short, I call a dentist who was referred by a friend who lives locally. And I have the most incredible experience that I’ve maybe ever had in the health care or personal care space. They are empathetic. They are caring. They rush me in right away they are systematized we are not dealing with the traditional healthcare environment of handing me a clipboard that was made in 1942 with a pen that was purchased in 1958. And it has the cap chewed by every patient they’ve had since then to fill out a paper-based form where they asked me the same question, five times on five different sheets of paper that have been photocopied in a haphazard manner that I can’t even really read the questions. Joey Coleman (5m 19s): No, no, no, no. Everything is electronic. Everything is touch screen. Everything is sweet and easy. They never asked me a question more than once they get me in. They mill a brand new molar almost with a, like a 3d printing kind of milling technology that they have I’m in and out of there in about two hours feeling incredibly. And to take that one step further, they proceeded to check in on me at 24 hours at 48 hours at 72 hours a week later, their followup process to make sure that everything they had done was creating the life experience that I wanted was incredible. And so the reason that I start the book with this story is if a dentist can create a remarkable experience that has a patient raving in sending new clients and singing their praises far and wide, there is no excuse for any business or any industry in the world, not to embrace these types of ideas to create a better customer experience. Joey Coleman (6m 20s): So to say that your never going to be going to another dentist, Charlie, your, your absolutely right. You are absolutely right. You know, Dr. McCann, who’s based in Denver, Colorado, Aurora, Colorado, which is actually a suburb. I recently moved from Colorado to Iowa, which is where I grew up. I moved there in September and I said to her, when I was leaving, I will be flying back for appointments. Like I will literally fly to Colorado for a dentist appointment because when you find a provider that you love, when you find a provider that you know is going to go out of their way to take care of you, I don’t know about you and our listeners, but my gut instinct is you’ll do anything to continue working with them. Joey Coleman (6m 60s): And if you’re getting a remarkable experience, whether that’s from a dentist our my auto mechanic. When I lived in Colorado, I moved to Boulder, which was an hour away from Denver. I would drive to Denver to the same auto mechanic for an oil change an hour away. Even though I drove past several other dealerships and several other mechanics who had the ability to work on our vehicle, I would still go to the one in Denver because of the remarkable experiences they created for me.

Charlie Venus (7m 25s): And you think about everything that you’ve just talked about in terms of that customer experience. Let’s look at the other side, what’s the costs to a business when they lose a customer?

Joey Coleman (7m 37s): Oh Charlie, you know, there’s some fascinating research on this, right. You know, have we probably all heard that phrase of Oh, it costs three times more to get a customer than to keep a customer or five times more are seven times more or 10 times. But it’s always some multiple that’s bigger right? Or we think about the opportunity cost of recouping our marketing and onboarding costs. So we pay all this money to get a customer and we’ve got to keep a customer for a certain amount of time before we earn out the cost of acquisition. Right. But here’s the thing that I think hopefully will bring it home for everyone listening. Let me ask you this. If in 2021, everyone who had ever been a client of your insurance agency came back and opened a new policy. Joey Coleman (8m 25s): How much would your business grow this year? Two X, three X, five X. Oh, we got it.

Charlie Venus (8m 30s): Yeah. And I’m thinking of, it would be, it, it would be three to five X. Yeah.

Joey Coleman (8m 34s): It would be staggering. Right? So here’s the crazy thing. What singular thing can you do to move the dial in your business more than any other marketing strategy, go back to the people who previously did business with you, explain how coming back will be different than it was before. And when we do that, when we focus on a strategic onboarding process, systematic way to create these types of experiences, we can actually keep a customer for life. The research shows somewhere between 20 and 70% of all new customers across all industries will decide to stop doing business with you. And the first a hundred days now, it’s interesting because whenever I talk to Insurance agents about this, they were like Joey and Joey, you don’t understand when somebody signs with us, they buy a year long policy. Joey Coleman (9m 22s): Like we don’t have to worry about them until month 10 or 11, when we do have the renewal conversation, but we try to upsell them on some new coverages, bring them in were good until then. No, no, no, no, no friends. The research actually shows that in those first three months, in those first 100 days, they have actually made the decision of whether they are going to renew. Stop and think about that. You’re thinking you’ve got until a month, 10, to come out of nowhere because you probably haven’t had any communication with them other than to make sure you’re still sending their invoices and they’re still paying statistically they haven’t had to place a claim in that first year. So there’s been no contact. And we just presume as Agents that when we roll into the living room, 10 months later with some new updated pricing and some new, additional benefits and some coverage that they didn’t think about last time, but they really should have considered O and these other new investment vehicles we have, and these other new things we’re offering. Joey Coleman (10m 17s): And Oh, you bought a new boat and lets make sure that we ensure that all of the upsell upsell, upsell, psychologically, they already checked out. They checked out based on how they felt in that onboarding process. And I don’t know about you, Charlie. And I know, you know, you and I actually had the pleasure of working together and you are helping me as an insurance agent. What I think is fascinating is the typical insurance agent doesn’t spend a lot of time in the onboarding process. And most insurance agents would agree that the onboarding process in many ways is the most, paper-driven complex, not fun part of the entire business. And that’s from your perspective, can you imagine what it is from your client’s perspective

Charlie Venus (11m 3s): On the national broker side, we had implemented your processes. And even when we lost a client and I can remember one producer in particular, he lost a couple of large clients one year and at the 100 day Mark, I said, look, I want you to go visit those clients and see what their experience is. Well, you know, at the nine month or 10 month Mark, we got both of those clients back because the experience that was promised by the new agency was never delivered. And so that was, you know, that’s a learning experience for all. Is that just because you lose somebody like you were saying earlier, go back after those people and tell them the experience is gonna be different or the experience that they thought that they were going to have with the new agent, you know, didn’t live up the expectation.

Joey Coleman (11m 55s): Absolutely. And you know, even just checking in on them to say, Hey, how’s it going? You know, I know you went with someone else and that’s totally fine. How’s that working out? How are you doing? Is everything good? What can I help you? You know, being in a relationship with people, to me at least means actually caring about how their life is going. That’s the thing that I’ve always found fascinating about the insurance industry. And I say this from a place of respect, I’ve never been an insurance agent. I have many clients who are insurance agents. I have carried many different types of insurance policies over the course of my life. But one of the things that I often wonder about is insurance agents really have this unique position in that we are counting on them to be there at the worst moments of our life. Joey Coleman (12m 41s): We’re counting on them to protect us when we feel like no one else will take care of us. The problem is that may never happen. Or it may be a long time before that happens, compared to the time we sign up for a policy. And so I think the opportunity that’s available for all agents is to say, what can I do to preview the type of care and concern that I will bring to the table? If there is a claim that I’ll bring to the table, if you need me before you need me, how can I show that I care? How can I give you evidence of my commitment to you prior to a claim being filed? Joey Coleman (13m 25s): ’cause, let’s be candid. And I say this respectfully, whether the claim gets processed and handled properly, and whether the person gets all the money, they believe they should get, w we’re all grown up enough to know that as a general rule, most people are not excited by what the payout is because in their mind it should always be bigger than it is always. Why? Because they are human. Not because there are bad and not because there are greedy ’cause, they are human. We all have this vision of Insurance providing us with everything we wanted and more, if something goes bad and that’s not the actual actuarial insurance business, right? That, that doesn’t work that way. Joey Coleman (14m 7s): So if we’re not going to quote unquote, win on the dollars, we darn well better win on the care. We better win on the empathy. We better win on the relationship or else we’re in trouble.

Charlie Venus (14m 19s): Some of the research you did in terms of that 20% to 70% of customers that leave within the first one, a hundred days, I think in the financial industry where insurance would fall probably about, I think your numbers were around 32%, make that decision to go back to their prior provider. Within those first 100 days, you just talked about why businesses lose customers, particularly from an agency standpoint and not dealing with those claims situations in advanced on how they’re going to address those and showing empathy what do agent’s in particular needs to do with their on-boarding process for a new customer.

Joey Coleman (15m 0s): I think there is a number of things that agents can do when it comes to onboarding Charlie and I, I, I would encourage folks that are listening to take the things I’m about to suggest and apply them to your operation because different policies, different approaches, different set-ups from firm’s are going to have different onboarding processes and strategies, but apply some of these things on top. And I think it will really be helpful. Number one, we need to do our best to recognize that while we are celebrating, that we’ve landed the new client, we’re feeling excited. We’re seeing all of the possibility we are counting, the commission dollars were growing our book of business, fill in the blanks. Joey Coleman (15m 40s): You know, someone, just one, a trip to Vegas, you know, for vacation or to The Bahamas or whatever it may be. The reality is on the client’s side, there are doubting the decision they just made, their wondering, could I have gotten a better deal if I would have kept shopping in other places, they’re wondering, did the policies I sign up for? Are they really going to protect me? The way I need to be protected? Or, was I oversold or up-sold or undersold into things that may be I and the agent couldn’t envision they’re in this place of fear and doubt and uncertainty that is only compounded by the fact of, they’ve heard the horror stories, of insurance not paying out, or when there was a claim and their presumption is that they are not going to get what they want. Joey Coleman (16m 25s): So stop and think about that. If we’re operating in an industry where upon, becoming a new customer, our presumption is your not going to keep the promise. Our hope is that you’re going to keep the promise to pay, but our presumption is your not going to keep the promise. Why? Because we’ve seen enough new stories that we’ve had enough friends who have made claims, who didn’t get what they were wanting or didn’t believe they got what they deserved. And as a result, we’re in this emotional hole of fear, doubt, and uncertainty. So stop and consider the fact that the agent is at an emotional high, the client is in an emotional low. If we don’t close the Delta between those two spaces, the space between our emotions and their emotions and close it quickly, that emotional gap only continues to grow over the duration of the relationship. Joey Coleman (17m 12s): So what we need to think about is how do we quickly show them that we care? How can we quickly show them that we are going to be there for them. How do we quickly show them that they made the right choice? This can be around simplifying paperwork. This can be around helping them to complete paperwork. This can be around not asking them to read 10,000 pages of disclosures. This can be something as simple as, Hey, you’re going to get a package of information from the agency, you know, from the Carrier, you don’t need to keep any of it. I’ve got copies for you. Oh, I don’t have to give up because little things like that, your, your clients don’t even know what’s important to keep or what they have to save .Even just giving some direction on something as simple as that can change the difference about how they feel when they think about you.

Charlie Venus (18m 4s): Well, I mean that, that’s a really extremely valid point. And when I was on the broker side, we not only sold property casualty insurance, but we sold health insurance as well. And one of the issues that was amazing to me, we would go out and we would have enormous financial savings for some of these clients on the health insurance side. And they still would not move the coverage and the reason they wouldn’t move the coverage was because the onboarding process and moving to a new carrier and moving to a new broker was so onerous, particularly to the human resources people and all of the people that I’ve had to deal with. Charlie Venus (18m 44s): The, the new policies, the new doctors, you know, all of the new networks that the CFO or CEO would you say, you know, I get too much pressure from these people. I’m just going to stay where I am.

Joey Coleman (18m 58s): Absolutely, absolutely. And I think part of the reason for that is we forget that we’re in a human to human business. See lots of times we think this, these acronyms of B2C and B2B drive me insane. You’ve got me on a soapbox. Now, Charlie, I’m going to rant just a bit, right? We have this belief that, Oh, we’re a business to consumer business, or we’re a business to business type entity. And that’s what we sell to no, you’re in the H to H business. I don’t care what industry you’re in. And it sure as heck applies strongly to Insurance. You’re in the human to human business. You’re selling to another human being. You’re building a relationship with another human being. And when we hide behind the cover of, well, Joe, you don’t understand it’s B2B or Joe, you don’t understand the strategies work Well, but I’m in B2C it’s a little different over here. Joey Coleman (19m 41s): No, it’s not. It’s all H to H and as quickly as we can get rid of the excuses of why it’s different and instead focus in on the people we’ll realize that at the end of the day, its people making decisions about their own pain, about their own ease about their own frustrations. You know, one of the things I find passing, you mentioned health insurance and particular Charlie, this whole idea of an EOB letter, right? An explanation of benefits letter that across the top says, this is not an invoice. This is not a bill. What other Industry sends you paper? That looks like a bill, but isn’t a bill. Joey Coleman (20m 19s): Oh yeah. While you’re waiting to think of one, I’ll tell you no business, no Industry. Now we can have a whole discussion about why EOB paperwork is necessary and that, you know, a statutory regulations and the things that have to happen. But lets just dive down to the consumer. Who’s just had this traumatic injury of this traumatic health issue and they get something in the mail and they’re dreading the bill. They are dreading the bill and they get something in the mail. That’s not the bill, but it looks like the bill. And it pulls up all that negative association again, who was that negative association attracted too. And who is that drawn to? Joey Coleman (20m 59s): And I’ll tell you, it’s not drawn to the person that maybe caused the medical issue it is not drawn to the doctor. It’s not drawn to the nurse. It’s not drawn to the parking attendant at the hospital who, you know, park their car while they went in for their checkup. It’s drawn back on to the insurance agency. And by default because they’ve never met anyone at the Carrier to their broker, to their agent, to the person that did the deal with them. And so even just having a conversation early on in the onboarding process to say, Hey, by the way, as soon as you start to get these type of letters, the first one, you get a call me, call me. And we’re going to talk about what’s in the letter were going to talk about why it matters. We’re going to talk about why it doesn’t matter. Joey Coleman (21m 40s): And we’re going to talk about what you can do with the letter. I know I mentioned this before Charlie, but here’s the interesting thing. The mere fact of what do I do with this piece of paper that looks legal causes so much stress in the average household because there’s one member of every household that thinks that every piece of paper that comes into the house should be saved. And there is one member of every household that thinks every piece of paper that comes into the house should be recycled, or thrown away. That conflict did exist in almost every household is one that you, as the agent need to be aware of and you as the agent need to make sure you’re not contributing to find a way to diffuse the conflict. Joey Coleman (22m 21s): You find a way to keep a customer for life,

Charlie Venus (22m 23s): Man. That’s great advice, Joey, in the book, it was a lot of fascinating topics in it. I think one that’s really important to insurance agencies. You know, there is a lot of acquisitions out there these days where you know, insurance agencies are being acquired by bigger agencies or by a private equity firms is the impact of the financial valuation of a company based on customer retention. And you give a great example in the books. So could you walk us through that? The valuation example?

Joey Coleman (22m 56s): Well, there’s a couple of ways this is done. And what’s interesting is a lot of this started in the last decade in Silicon Valley. So what happened is, as software is a service businesses started to be created. They recognized that because there is recurring revenue that’s coming in every month that keeping a customer is significantly more valuable in a monthly subscription business than maybe in some other businesses. Because 30 days later we get another infusion of cash from that customer. And what happened is the venture capital firms an the private equity firms that operate in Silicon Valley and do the valuations on software is a service companies started moving the dial where they would value a company at a greater level if their retention percentage was greater because they knew they could track immediately what the ROI was and the, and the lifetime value of a Customer. Joey Coleman (23m 49s): The thing that is crazy to me is the typical business has a tendency to operate in a very shortsighted way. They don’t fully embrace the lifetime value of a customer. Let me ask this. Let’s, let’s bring this specifically to Insurance. I don’t know many people who wake up in the morning and go, Oh man, I gotta go find some new Insurance today. That’s what I’m doing today. And I’m super excited about it. Instead. It is seen as a necessary evil. And I say that respectfully, I’m not trying to talk ill about the insurance industry. I’m just trying to give some insight into what the majority of human beings, at least in the United States think about when they experience an insurance conversation, it’s something that they know they have to have, but it’s not something that they are excited to pay for. Joey Coleman (24m 35s): It’s something that they feel they need to have, but it’s not something that they are eager to go find. And so the reality is if we set this up properly, we should be able to keep a customer for a very long time because they’re not excited to go shopping. The reality is most insurance agents, when, when your customer leaves, the reason they are leaving is because you forced them to leave. I hate to be so blunt, but the reality is you created a situation where they couldn’t help, but leave. Now when we go to, you know, more corporate policies and larger policies may be, they have some requirements internally that they need to do, a review of all of their vendor contracts on a certain number of years or something like that. Joey Coleman (25m 22s): So maybe there are some things that it wasn’t because of anything you affirmatively did, but on the individual consumer or a homeowner policies or things like that, the reality is a situation arose that they felt they had to go looking for someone else. They had already gone through the headache of signing with you, but now they feel they have to go somewhere else. I understand why we might get upset when that happens. I understand it hurts to lose a client, but instead what I’d love everybody who’s listening to think about next time a client says they’re not going to renew or their going to go somewhere else to actually pause for a moment of reflection and say, what could I have done differently? Joey Coleman (25m 60s): What did I do to create an environment where they left? Is it because I haven’t been in contact in 10 months? Is it because I, when I am in contact, its only to try to sell the more is it because I believed that our company issued e-newsletter was enough to keep in contact with them, even though I don’t even read our monthly newsletter or was it because you know, fill in the blank of all of the reasons that it could have been ask them and try to figure out what can we do differently next time?

Charlie Venus (26m 32s): Yeah. And that’s such an, an accurate statement because you know, the thing with most insurance agencies is when a customer leaves, if it’s an independent insurance agency, they’re going to another agent that has the same or very similar markets or carriers that they represent. So it’s not because of the Carrier typically its just because of that experience they have with the agent, absolutely. Or the lack of experience or lack of it.

Joey Coleman (26m 59s): I think you’re spot on there, Charlie. Yeah. And here’s the thing we, for some reason we have decided as human beings to accept the idea, that lack of experience is a good experience, right? So we think, well, if, if, if nothing’s happening in this conversation, if we’re not rocking the boat, it’s at least staying the same. It’s saying good, no friends, there are two States in nature. Something is either living and growing or it’s decaying and dying. Those are the only two States that exist in nature humans or the same way where they’re living in a growing or decaying and dyeing. The reality is our relationships with our customers are the same way either. We are affirmatively moving them forward, making them thrive, making them grow, adding depth, adding color, or we are letting them stagnate, letting them fall apart, letting them wither on the vine. Joey Coleman (27m 49s): Those are the two States and what’s probably making some of our listeners uncomfortable right now is as you think of your clients, you know that some of them are in a state of decaying and eroding. What are you going to do differently about that now that you know, now that you think about this and go, Oh my gosh, that’s the Joey has got a point. There, there is some validity that there are only two States in nature and if I’m not growing and if I am not feeding this and I am not deepening the relationship, what do I need to do to stop the decay, to stop the erosion? That’s the opportunity that’s available to us.

Charlie Venus (28m 23s): Thanks for being here today, Joey, we are looking forward to diving deeper into the eight phases of the customer experience. Next time on the trusted advisor.

Edwin K. Morris (28m 32s): It was your podcasts. Thanks for listening to this edition of Charlie’s corner brought to you by Iroquois Group. I am Edwin K Morris, and I invite you to join us for the next edition of the trusted advisor podcast.

Close Menu