Question about servicing bottom 10%

[Poppy Hill]

The owner and I wonder about the time spent chasing down the same nonpayers every month. When do you think it's not worth it?

 

[fed up]

10 % of your customers will always take up 99% of your time, whether it is chasing premium or processing claims/answering questions. Best time to fire them is at renewal. You've collected the premium for the policy period that is ending and you don't need their premium/problems going into the next policy period.

 

[Markthebroker]

The owner and I wonder about the time spent chasing down the same nonpayers every month. When do you think it's not worth it?

When it's cheaper to find a new client, you should consider firing them.

When it becomes more expensive to keep them than to loose them, then fire them. Asap.

 

[RustyBill]

I have a friend in another business ( B2B ) that "fires" his bottom 5% - 10% customers each and every year. Does an end of year audit and just tells that moving forward he won't be able to service their business. 25+ yrs doing this and he swears by it.

 

[LeeV]

What do you mean when you say "Bottom 10%"?

 

[DHK]

I'm going to add this PDF from Bill Good on Client Retention Strategies. Bill Good is primarily for investment advisor teams. I'm sure there are a few ideas that can be applied in various ways for P&C.

Do I Have To Keep Them All?

No you don’t. There are three categories of client who should not be retained.

1. Jerks. These folks are nasty, mean to you and your staff, always raining on your parade. Life is too short.

2. People who will not follow advice. Obviously, I don’t mean just the people who occasionally won’t do what you tell them to do. I mean the people that will not follow advice. These people need to go where they can get good advice.

3. People who will not accept your call. This is really a subcategory of “will not follow advice.

 

[walthamny]

If they are not paying and not referring you business, Bye Bye

 

[LeeV]

What if this client is profitable? Would you still say bye bye?

 

[DHK]

What if this client is profitable? Would you still say bye bye?

How can a client that doesn't pay their premiums and has to be constantly reminded... be profitable?

Okay, I guess you might be saying that it's a large premium policy... but if they're not taking your calls or paying on time... couldn't this be a professional liability, particularly if there are gaps in time of coverage, etc.? I'm not in P&C... but I'm also not in the business of being someone's papa to make them pay their premiums on time.

 

[WinoBlues]

Life insurance -

Cleaning my book years ago was freeing. Not premium wise but repeated service calls, rudeness, lapses.