Pointers For Building Loyalty Among Your Annuity Clients

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In todays information-saturated world where well-informed, exceedingly fickle investors are proliferating faster than Intel can make processors, building loyalty among annuity customers is more important than ever.

In the annuity world in particular, where 1035 exchange activity has substantially increased over the past few years and negative net sales are on the rise, loyalty seems to be as lost as the second sock in the dryer. We wonder where it went.

Its a well-known fact that it costs more money–some say 10 times as much–to get a new client than to keep an existing one. And statistics everywhere confirm that its only a small fraction of customers who provide the bulk of returns and the largest share of profits in businesses today.

Needless to say, with shrinking profit margins and expense-control fever, no business can afford this dynamic for very long.

What can be done to keep clients from leaving? How can the industry build loyalty among annuity customers in this information-driven, super-accelerated world? Increasingly, producers are adopting a back-to-basics approach to client retention and relationship building.

1) Listen to your clients and anticipate their needs.

This is the foundation of developing a lasting broker/client relationship. Avoid falling into the trap of thinking of customers as a collection of names, numbers and dates on the computer screen. Instead, strive to treat them as if their objectives were your own.

The importance of this cannot be overemphasized. The more you listen to clients and identify with their goals, hopes, and dreams, the better youll be able to anticipate and provide for their present and future needs. Keep reminding yourself it could cost you as much as 10 times more money to find a new client.

2) Know your stuff.

With the rapid proliferation of technology and information sharing, contemporary annuity buyers are simply better educated and more sophisticated than ever before. That means you have to better educated and more sophisticated, too. Unfortunately, theres no magic bullet that can get you there. What you need to do is to learn your product line, inside and out.

To prepare for discussions with todays well-informed customers, consider these effective strategies.

Capitalize on your relationship with insurance companies, and get what you need to pass along your knowledge. Remember, insurers publish stacks of marketing materials aimed at educating brokers and clients, so that both understand the annuitys features and benefits. Your wholesaler is there for this reason, too; cultivate this resource.

Consult with your colleagues about the challenging questions their clients pose. That way, when the trickier inquiries do come bouncing your way, youll be better equipped to field them. Remember that the contemporary annuity buyer is but a mouse-click away from limitless information and products from a vast array of companies hungry for their business. So you have to be that much smarter, too.

3) Be proactive.

This is a surefire way to strengthen the broker/client relationship. Phone calls, letters, e-mails, informational mailings and meetings are all excellent ways to remind your clients that youre working on their behalf.

For instance, a simple phone call to check on how a client is doing, with no ulterior sales motive, can go a long way. It lets the client know you care, even when no money is being handed over.

Also, many brokers find its important to know some personal information about their clients–birthdays, anniversaries, spouses and childrens names, etc.

Yes, annuity buyers can get their products anywhere they choose. But, by being proactive this way, youll have the clear advantage. Its all in the relationship.

Customer loyalty is one of the biggest challenges in financial services today. There are hundreds of thousands of brokers struggling to gain share, Internet companies offering products at low cost, and portfolio return promises coming from all directions. Combine this with the fact that most customers have lost a great deal of their nest egg in the market, and its no wonder why they are not staying loyal.

Now more than ever before, clients are looking for stability and reassurance. They cant get that from their computers, but they can get it from you. Make retaining customers a top priority. Listen to clients and anticipate their needs, know your stuff, and be proactive. If you do these things, youll be well on your way to building loyalty among your annuity clients.

Geri S. Rhoades is the assistant vice president-marketing for the Retirement Products & Services Division of Sun Life Financial, Wellesley Hills, Mass. Her e-mail is geri.rhoades@sunlife.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, October 7, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.