Small Business Owner Michael McLean Deploys his Secret Weapon For Customer Retention:

And as a Result Grows The Family Business from 3 Million to 10 Million dollars a year in just 36 Months.

In 2002 after selling his own professional hockey team Michael McLean agreed to help his father in the family insurance business. Michael’s father was 65. A fantastic salesman and entrepreneur in his own right but was burnt out after many long years working on parts of the business that weren’t his strength. If Michael chose not to step in his father was going to sell the business and retire.

Putting an End to Being “Just Another Insurance Agency”

When Michael stepped in the business he realised that he needed to be able to retain the existing clients of McLean Insurance – Michael concedes that their retention rate was ‘abysmal’ in the early years of the business. A 1% increase in retention represents 100,000’s of dollars in revenue. Finding a low cost low, involvement strategy to retain existing customers was very important.

They also needed to move existing clients who had purchased a single policy to holding multiple policies. Often times many customers didn’t realise that McLean Insurance was a ‘one stop shop’ for property and casualty insurance – it was common for customers to have policies with other insurers they could have had with McLean Insurance.

Finally they needed to increase their referral rates. Referrals had not being a great source of new business traditionally for McLean Insurance.

Michael realised the increasing necessity of driving up referral rates as many traditional forms of advertising became more expensive and the leads generated weren’t converting as well into customers. Michael set the goal to make McLean insurance a referral driven business.

Implementing Just Two Ideas Triples The Size of The Business in 36 months

During the first year in the business Michael worked in every part of the business from the ‘front door to the back door.’ In his spare time he worked on improving the marketing of McLean Insurance.

From his days running his own hockey team Michael knew that a personal relationship with your customers and excellent customer service were the keys to keeping customers for the long term.

So he worked hard at making sure the team in the office at McLean insurance were the best he could get and then focused on two critical strategies that could grow McLean Insurance from within.

  1. Handwritten ‘thank you’ notes
  2. A printed customer newsletter that is mailed to every customer 12 times a year every year until they ask to be no longer receive the newsletter

The handwritten thank you notes provided a point of difference that was greatly appreciated by new customers and existing customers that renewed their policies with McLean Insurance. Setting the customer relationship off on the right foot and reinforcing it each year. (Who doesn’t want to feel important enough that the insurance agent took time out to hand write a note specifically for them).

Michael says implementing their customer newsletter has become the bedrock of McLean insurance’s business – Easily their best return on investment. The newsletter brings in between 2:1 and 7:1 R.O.I.

Michael happily boasts “the newsletter contains almost nothing on insurance.” The general feeling at McLean Insurance is that if you can’t afford to send your customers 12 printed newsletters a year it is time to target a better calibre of customer.

Referral Rates Surge – 10X Increase in 7 years

McLean Insurance’s referral rates skyrocketed on the back of their newsletter. Until they implemented that newsletter none of the customers knew that there was even a referral program. Using the month newsletter Michael educated customers about the referral program and his customers have referred new business to McLean Insurance en masse.

In the first year they started their newsletter McLean Insurance was getting at most, a handful of referrals per month. But their referral rate has risen steadily each year. Now in its seventh year the referral program has generated 57 referrals in a single month (a company record). And those referrals have the highest close rate of any source of new business.

Industry defying Customer Retention Rates

In the insurance industry the typical life of a policy holder is between two and three years depending on a couple of variables. Year on year they retain 91% of their customers, up from 85% when Michael started in the business. McLean Insurance retains its customers an average 9.5 years and is closing in on ten years. Between three and five times the Industry average.

The reason for losing customers is generally circumstances beyond their control, such as a death in the family or sale of a vehicle and not purchasing a new one.

Michael believes the reason for the high retention rate is the strong emotional bond that publishing a monthly newsletter has created in his customers and that has stopped them from looking around for a different insurance agent.

A Happy Ending For This Family Business

McLean Insurance has discovered the bedrock to building a sustainable long term business is its printed customer newsletter. With Industry defying retention rates and high referral rates McLean insurance is more profitable than most insurance agencies and is able to invest more heavily in customer acquisition because each account is far more valuable.

Michael’s Father remains active in the business to this day (even though he is now 75) doing what he loves, looking after the most important accounts in the business.


Featured Quote:

“The first thing I would do in a new business I am working in and I first thing get all of my Coaching clients to do regardless of where they are at in their business is to start a Printed Monthly Customer Newsletter.”

Michael McLean, McLean Insurance and Creator of the Ultimate Millionaire Agent Program.

Could You Do The Same?

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