Question about servicing bottom 10%

[walthamny]

Generally speaking if a client is not giving out any referrals it is a B but more likely a C client. If they are a C client and they start lapsing policies, they are bye bye. If they are B client they may get more than 1 strike if they miss a payment. I know sometimes insurance companies are a pain. I had clients also got hacked so it all depends. If they make 200k a year and they lapse their term policy few times and each time argue they are not going to die, I used to try to keep them, nowadays they are bye bye. Clients who give you referals and introductions are much more profitable than clients who lapse all the time.

 

[Allen Trent]

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.

Assuming he must be in a less regulated industry. Harder to get rid of insurance clients you no longer want other than giving poor customer service

 

[Allen Trent]

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

Exactly. I think it is a ridiculous concept to fire bottom 10%. I do something totally different & way better. I keep the top 90% each year, anyone not in top 90% dont make the cut

 

[Allen Trent]

but I'm also not in the business of being someone's papa to make them pay their premiums on time.

There is good money in that on some adult only websites. InsuranceManKink.com

 

[rousemark]

Did you promise to service rheir business when you sold them?

 

[RickyG]

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

Are you in the P&C side of things? If so that question should be rhetorical.

 

[RickyG]

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?

I'd absolutely love to and have been pressing this point for years. Our broker however sees it differently, mainly I suppose because she doesn't have to deal with them directly. Its absolutely true I spend a good portion of the day dealing with the same % of people week after week year after year.

 

[Markthebroker]

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

If you live in a hilly neighborhood, the bottom 10% live in the lower parts of the neighborhood.

Duh.

 

[LeeV]

You guys are missing my point, which is revenue and profit. Just because a client is late and a call may be made, does not automatically mean that client goes to the bottom 10% for firing. Assume a book of business of 200, 100 of them never need a call and 100 of them need a call every month. In my example below would you fire the clients with a call every month?

	Clients	Clients
	100	100
Monthly Rev	$50	$20
Late Pay Call	1 Per Month	0
Est Cost of Call	$5	$5
Adj Monthly Rev	$45	$20

 

[rousemark]

Again, did you promise to service them when you aquired them as a client?