EFT and Retention
Recurring electronic funds transfer (EFT) payment plans are a key strategy in improving customer retention.
What is the focal point of your agency: new business acquisition or customer retention? If you said retention, you may be on the right track. As many insurance industry articles related to the subject of customer retention point out, it costs five to nine times more to acquire a new policyholder than it does to keep one and that just a 5% increase in retention rates can double profits over a 5-year span. Additionally, new customers come with a very high “churn rate” in which the average agency can expect to lose as many as one fifth of these new customers in a single year. Given this cost difference and profit potential, a focus on customer retention can be a winning strategy for improving profitability and long-term success.
Of the many retention strategies mentioned in industry articles, enrolling customers in recurring electronic funds transfer (EFT) payment plans is consistently listed as a key objective. An insured’s participation in an EFT payment plan is a strong indication of their commitment to maintain the policy, which is also a commitment to your agency. Carnegie General offers a convenient, point of sale EFT enrollment process in which your customer can automatically pay future premium installment payments via checking account or credit card. The benefits of enrolling in a recurring EFT payment plan include: reduced monthly billing fee, 30-day billing cycle, few (if any) lapses in coverage, and convenient, no-hassle payment processing. For existing customers not yet signed up for EFT, we offer enrollment at any point in the policy term via our consumer website portal.