Insurance agencies have a lot on their plate. They must call potential prospects, schedule appointments, and close deals with customers. Most of these tasks are tedious and can take up a lot of time that could be used on the more important stuff.

Also, there is a big chance you’ll miss an essential task or confuse your customer details.

Unfortunately, a single bad experience can massively hurt your sales and customer satisfaction. To prevent that, you’ll need to get the right CRM solution that’s intuitive, reliable, and automate the whole process to maximize the sales potential.

In this article, we’ll take a look at 6 ways to pump up insurance sales with a CRM.

You’ll learn about the precise strategies that have helped thousands of insurance agencies become more successful and increase their sales.

How to grow insurance sales

#1 Capture The Right Leads

Capturing the right leads and avoiding wasting time on the dead ones can be critical in your overall success.

For instance, if you’re offering property insurance, there is no point in targeting teens. Most of them are probably still living with their parents and don’t care about property insurance.

Instead, you should much rather focus on targeting people with a family in their 30s.

A CRM solution can help you just with that. It allows you to identify your target audience, show you detailed insights about them, and help you discover who to target. You’ll also be able to determine which leads have the most potential and so maximize your ROI.

On top of that, it will also increase productivity and help you with marketing automation. For example, you will no longer have to segment and score your leads manually.

Everything will be automatic, and without any effort, you can automate your whole business.

Empower your agents - insurance agency CRM

#2 Provide Better Customer Support

Customer service is a huge thing nowadays. In fact, in some cases, it can be the direct determiner of whether a customer will go with your agency or not.

That’s because we no longer care about the price as much as about the experience.

If your customers have any problems with their insurance, want to get an additional one, or have any questions, you must answer them as quickly as possible. And that’s what CRM allows you to do.

Using the right CRM can improve your customer support and make it more personalized.

Your support team can extract data from your CRM in real-time, where they can see all of the previous interactions with your agency. They can also see what insurances your customers have ordered so far and what can be causing trouble.

It will improve the customer support experience and help you resolve issues faster.

Providing excellent customer support is critical to your overall success. It will make customers’ interactions better, which will lead to more happy customers and increase sales.

#3 Maximize Email Marketing Potential

Email marketing is essential, whether you’re a big insurance corporation or just a small start-up trying to get more sales.

It’s the most profitable marketing channel with a whopping 3800% return on investment.

But when you send emails to your customers, you have no way of knowing whether the recipients have clicked on the link or a CTA button inside the email. Moreover, you don’t even know whether your customers opened an email or not. Unfortunately, that means that there is no way to measure the effectiveness of individual emails in your campaign. Or is there?

If you’re using the right CRM solution, you can find that out. And trust me, it can be a complete game-changer to your email marketing game. 

You can set up alerts to notify you when your customers open the email, click on the link, or click that juicy order button. On top of that, everything is happening in real-time, so you can be sure you won’t miss anything. 

Renewal and retention automation - insurance agency CRM

Ideally, you should also integrate it with video marketing software.

This is because emails with videos have a 200 – 300% higher CTR. Integrating a CRM tool with video marketing tools can help you deliver a better experience, find out what works, and develop a winning strategy (here are my top picks for video marketing tools.)

It will improve your email marketing game and supercharge your insurance sales.

#4 Automate the Tedious Tasks

Whether you’re closing an insurance policy with your customers or just piling up some additional insurance, there are a lot of tedious tasks to perform.

You must find customer’s details, fill them in, and answer frequently asked questions,

Unfortunately, this only slows down your employees and brings you no value whatsoever. It would be much better if you could eliminate these tasks and focus most of your time on the things that matter – closing deals.

And that’s precisely what an insurance CRM solution can help you with.

It gives you access to all customer’s data in one place. It also allows you to automatically fill in all of the details and answer the customer’s questions effortlessly. This is especially true if you integrate your CRM with a chatbot. 

It will save you tons of time and perfect the user experience (here are my best picks.)

In essence, it will get the load off of your employees, free up their time, and allow them to focus on the things that will drive more results.

Insurance cross-sell engine - signals

#5 Segment Your Customer Base

Personalizing the user experience and segmenting your customers is one of the best ways to drive more substantial results and boost sales.

In fact, in some cases, it can even increase your conversions by over 200%. 

You no longer have to rely on your judgment and hand-pick different customer segments manually. Instead, you can do it automatically, within a few seconds.

What’s even better is that the right CRM solution can also do an advanced segmentation.

You don’t have to rely only on demographics like age, gender, and education. Instead, you can tap into more advanced metrics like psychographics, location, etc.

The results you see above are a golden standard, and you can easily achieve them with the proper customer segmentation using your insurance CRM.

So ensure you personalize the user experience as much as possible and yield tons of sales.

#6 Improve Collaboration Across the Board

Keeping everyone on board is crucial for a high-functioning agency. It will increase the effectiveness and productivity of your employees.

Moreover, it will decrease your chances of making an error that may be fatal.

For instance, you can contact customers twice or offer them a different insurance policy than you’ve previously agreed upon. Unfortunately, this can make you look unprofessional, and in some cases, it can even cost you a customer or sale.

I am sure you don’t want that, and that’s why you must make your company co-ordinated.

The right insurance CRM solution can help you fix that by storing customers’ data, sharing it across the team, and making everyone updated all the time.

It’s a simple way to avoid potential problems and prevent losing a sale.


Running an insurance agency isn’t always easy. You must find the right clients, approach them properly, and create a perfect pitch to close a deal. 

Fortunately, integrating an Agency CRM into your marketing can lead to tremendous results.

In this article, we’ve talked about 6 ways how an insurance CRM can boost your sales, increase productivity, and maximize your results.

But there is a lot more that comes into a successful CRM. Be sure to dive deep and learn as much about it as possible (check some of the best online course platforms to learn more.)

Follow the advice above, start using the right insurance CRM solution, and increase sales.

The insurance industry is one of the fastest-growing sectors in India and across the globe. With insurance products like Life, Health, Motor, and more, the industry figures speak volumes of the immense opportunities in the market.

Indian Insurance sector saw a surge in the gross premium earned in recent years. However, the penetration of insurance in the country is only 3.7% of the gross domestic product. This indicates the need to address the challenges and promote growth.

State of Insurance Broking in India

The distribution of insurance products in India happens through various channels such as direct and intermediary channels. Intermediary channels include agents, brokers, bancassurance, retailers, and more. Amongst these, the only channel that represents the customer and not the insurer is Insurance Broking. The insurance brokers provide expert advice on the insurance policies suitable to the customer. In return, they are paid brokerage by the insurance company whose policy is chosen.

However, the channel is still evolving and needs to meet the risk management requirements of customers comprehensively. This article talks about the landscape of the insurance broking industry, its evolving expectations, and, more importantly, the steps you must take to promote growth.

What is the Broker Channel of Distribution?

An insurance broker is an individual who acts as an intermediary and sells, solicits, and negotiates insurance on behalf of a client for compensation. But they can’t bind coverage on behalf of the insurer. In simple words, unlike the rest of the insurance intermediaries, an insurance broker works for the benefit of the customer.

People prefer buying insurance from a broker as it saves time and money and results in better coverage. Brokers can get a client better rates on insurance policies than individuals buying insurance directly from the company. That is because insurance companies know that brokers have the experience to guide their clients to the right policies with the proper level of coverage.

Day-to-day Activities Performed by an Insurance Broker

An insurance broker performs various activities as a part of his daily routine, such as:

  • Understanding the client’s business
  • Providing consultancy about insurance products
  • Highlighting market knowledge
  • Comparing various policies
  • Assisting customers in value-added services
Activities performed by an Insurance Broker

An insurance broker is responsible to help his clients with their individual, family, or business liability risks. He provides comparison documents and quotes as per the needs of the client. Based on this information, the client can make an informed decision about the type of insurance to buy.

As insurance sales through direct channels grow, insurance brokers need to act proactively. The need of the hour is to take desired measures to find new ways to optimize processes and reduce costs. Hence, find better ways to connect with their customers. Brokers need to invest in automation tools while expanding the use of mobile devices.

Landscape of the Insurance Broking Industry

The number of brokers in the insurance broking industry has significantly increased since the last decade. As of July 2020, 468 insurance brokers have been licensed by the IRDAI. Brokers are the preferred channel of business in India as they account for more than 70% of commercial lines. These lines include marine, aviation, construction, engineering, risk, and liability insurance. Further, the dynamic and conducive regulatory landscape in the country is expected to propel industry growth in the coming years.

Landscape of the Insurance broking Industry

The insurance broking channel of India has changed drastically over time. With the advancement in technology, changes in human interaction, and the sudden onset of a pandemic, insurers are trying to change the traditional face-to-face insurance distribution. But with a large population of India still believing in the importance of human interaction while buying a policy, the broker channel of insurance will still thrive for long.

As the Indian insurance market continues to grow organically with increasing population and insurance requirements, there remains a massive opportunity for disruption through technology.

Challenges in the Insurance Broking Industry

The number of insurance brokers in the industry keeps increasing every year. But this role is still misunderstood and often not performed to its full potential. Few challenges that prevent the insurance broking industry from succeeding are:

1. Lack of knowledge among people while buying insurance

The concept of insurance has been highly misunderstood in India. The reasons for this are multiple- minimal guidance on the insurance policies, complex products, and high prices.

According to the 2018 Insurance Barometer Study conducted by Life Happens and LIMRA, 44% of millennials overestimate the cost of insurance by up to 5 times the actual amount. Not only that, people resist buying insurance due to minimal or no guidance from the insurers.

This is where insurance brokers come in. Their sole role is to advise people on the kind of insurance to buy based on the clients’ needs. Hence, by educating people about the various aspects of insurance, such as policies, coverage, claims, benefits, and more, brokers can increase their market share.

2. Poor penetration in semi-urban and rural areas

Insurance penetration continues to be a challenge. It only marginally improved to 3.76 percent in 2019 from 2.71 percent in 2001, the Economic Survey 2020-21 shows. 

The geographical analysis highlights the concentration of brokers in major states and cities, preferably in industrial areas implying low penetration in other areas. This is more severe for the semi-urban and rural retail and SME segment.

Insurance penetration in India

The low penetration can be attributed to-

  • Lack of insurance knowledge amongst customers
  • Tons of paperwork
  • Complicated policies
  • Poor perception of risks
  • Broker’s high cost operating model

3. Lack of product innovation and training

Insurance policies are often complicated and hence, difficult to understand. An insurance broker is responsible to advise and sell policies to a customer. However, if the broker is unable to understand the policy, it will be difficult for him to convey it to his clients.

Therefore, insurers need to simplify their products. Alongside this, brokers should be trained properly about the policies so that they can justify their roles.

These challenges have been a part of the industry for a prolonged period. But as the insurance sector makes a shift towards digital, it is set to witness significant growth in various aspects.

1. Embracing Digital Landscape with Cloud Technology

COVID-19 has brought some unexpected changes in various sectors across the globe. One trend that remains common in all industries is the reliance on technology and digital products.

Technologies like Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), and Intelligent Automation (IA) are a few of the many trends that will pave the way to the future of insurance broking.

Intelligent Automations

Automations minimize manual work, simplify document collection, speed up underwriting, and streamline communication. Internet of Things (IoT) provides clients, brokers, and insurers extensive data and insights to design holistic risk management tools and systems. This boosts their customer information repository and enables them to offer timely, pertinent coverage based on individual needs.

Moving to cloud technology and Software as a Service (SaaS) will help in engaging with the client online for all processes- from making the first contact to selling renewals.

2. Aligning Insurance Products to Customer Needs

The needs of India’s new-age consumers have changed drastically over the last few years. Health insurance was once predominantly perceived as a necessary solution only for senior citizens and people inching closer to retirement. But today, the consumer includes more millennials.

As more and more people understand the value of insurance, companies need to start building customer-centric products. Complicated policies are the major reason why people are reluctant to buy insurance. Customers don’t have complicated needs. They want to be able to choose from a good selection of policies that provide clear, transparent information along with smooth, hassle-free interactions.

Uncomplicated products aligned to customer needs

Since brokers directly interact with consumers, they can help insurers with data and intelligence to customize their product for the target consumer group. Brokers can also help customers compare policies from several insurers (similar to online brokerage platforms) to make the best decision. This way, they can help bridge the gap between insurer and consumer.

3. Redefining the Role of Insurance Brokers

2021 is the year of digital transformation. As the insurance industry embraces technology across all distribution channels, redefining the roles of advisors becomes a necessity.

Technology has changed the way people sell and buy insurance. Products are personalized and focused on the needs of the customer. Hence, insurance brokers should leverage this technology to redefine their role as advisors in order to increase their sales efficiency.

Redefining role of Insurance Brokers

Insurance companies should work closely with the brokers to train them regarding the product offerings. They should provide clear success metrics, roles, and responsibilities to every broker to keep them at the top of their game. Automated insights into individual broker statistics – premium collected, new leads, and renewals will help in assessing individual performance and understand glitches in the current process.

4. Constructing an Omni-channel Strategy for Customers

Omnichannel is not just about providing multiple platforms to the customer to interact. It’s about maintaining regular and personalized interaction with the end consumer across various channels.

To put customers first every step of the way, brokers need to proactively communicate during the information phase, focus on personalizing interactions with customers on diverse channels during the purchase phase and create a blend between personal contact and digital tools to elevate support and claims.

Omni-channel Strategy in insurance

They need to provide consumers with personalized services across the various channels- email, phone, SMS, WhatsApp, and more. Staying on top of the mind of the customer and reaching out to them when they need you the most will help in building a strong relationship. Customer behavioral analysis will help in predicting customers’ next move and acting accordingly.

5. Focusing on Risk Management and Compliance

As all major insurers start focusing on leveraging technology, they need to pay attention to issues such as customer and data protection and privacy. They should also focus on the company’s code of conduct, risk culture, and customer outcomes. This will put an emphasis on customer protection, including product design and transparency as well as distribution.

Digital sales models raise new and more complex concerns over financial crime and buyer verification. And the increasing use of big data demands that privacy and data protection requirements be addressed for an ever-growing body of information.

Those that tackle the challenges and move quickly to establish best practices in their organizations will reap the rewards of customer trust.

In a nutshell

The Indian insurance industry is at a very critical juncture. It has a very high potential for significant growth if progressive actions are taken. Proactive and collaborative action by the stakeholders — insurers, brokers, regulators, and other stakeholders can help realize this potential.

The penetration of insurance needs to increase. This can be done by building a strong digital network. Insurers need to spread awareness amongst customers, create policies that are easy to understand and make processes like renewal and claims smooth and consistent.

Intelligent automation can be used to quickly automate the critical processes to achieve higher efficiency and streamline the cost of operation. The right CRM system allows insurance companies to support customers throughout their lifetime, extending their journey with the company instead of merely providing services at the moment. The future is customer-centric and only those insurers will drive growth who understand customers’ current and evolving risks and modify their products accordingly.


Who is an Insurance Broker?

An insurance broker is an individual who acts as an intermediary and sells, solicits, and negotiates insurance on behalf of a client for compensation.

What does an insurance broker do?

An insurance broker is responsible for understanding the client’s needs, providing consultancy about insurance products, highlighting market knowledge, comparing various policies, and assisting customers in value-added services.

What is the difference between an agent and a broker?

The major difference between an insurance agent and a broker is that an agent represents the insurer while a broker represents the customer. A broker can’t bind coverage on behalf of the insurer.

Staying competitive in the current business landscape is a challenging task. Consumers are now constantly bombarded with personalized ads telling how brands can take care of their pain points.

Consumers, on the other hand, also have a lot of options when it comes to spending their money. But they will commit to the brand that can convince them the best.

If we see, getting a new customer is a difficult task. But retaining the old ones is comparatively easy – especially with the help of CRM software.

Businesses now have better access to customer data such as demographics and purchasing habits. With customer retention strategies in place and using CRM software, brands can tune their business and marketing to retain customers and improve the overall Customer Lifetime Value (CLV).

CRM customer retention strategies brand examples


Why is customer retention essential in today’s time?

While customer retention helps keep your revenue stream intact, new customer acquisition helps achieve your expansion goals. Therefore, to sustain the competition, you must devise strategies to prevent losing customers and acquire new ones.

According to, around 44% of companies focus on customer acquisition, while 18% solely focus on customer retention. The remaining 40% has both customer retention and acquisition strategies in place.

Repeat customers make a significant part of any business. Consumers who have made a purchase are more likely to make subsequent purchases if they had a satisfactory experience. This benefit is non-existent with new customers as they are more likely to abandon their shopping cart. This issue persists with big brands too. Adobe has reported 75.5% of shopping cart abandonment. Some reasons behind this can be the pricing, need, trust, or availability of payment options.

But on the positive side, a person who has purchased from you before is more likely to buy again. Plus, they can spend more. Word-of-mouth and loyalty can also bring in new customers. For instance, the probability of selling to an existing customer is 60 – 70%, vs. 5 – 7% for a new customer. Because if a customer is happy with your service, he will be willing to invest more in your product. In other words, the chances of cross-selling or upselling are more. Ultimately, you would receive more ROI from an existing customer as you’ll need not spend on marketing again for existing customers.

How CRM helps in customer retention?

CRMs provide you with the tools needed to retain your customers.

A CRM platform contains a lot of information about customers and their interaction with your business. It includes conversations, past activities as well as purchases. It helps you with:

  • Customer data (identity, behavioral, and qualification data)
  • Email campaigns
  • Customer satisfaction surveys
  • Social media responses
  • Customer segmentation for more targeted outreach
  • Provide personalized offers and promotions
  • Notify customers about order updates or a product launch
  • Manage customer support follow-ups
  • Purchase history for customer loyalty programs

Now let’s look at how brands have been using CRM to provide exceptional customer experience and execute their customer retention strategies.

25 Examples customer retention strategies (using CRM) from leading brands

#1 Make use of customer service tools.

The small and medium-sized businesses generally have a small customer service team. It makes servicing customer requests quite laborious. A CRM helps improve the efficiency of customer support teams without having to hire new people. A great example is how Santa Cruz Bicycles provided support to their riders.

The aggregated data from the CRM also helps in product improvement.

Similarly, Decathlon uses CRM to book workshop appointments for customer support. This way, they know every granular details of their customer experience.

Decathlon - Make use of customer service tools

#2 Apologize for your mistakes

Companies will inevitably make errors, but that does not mean that customers will end their relationship with the company. Instead, 96% of the customers, according to a survey by HubSpot, said that they would continue engaging with the company if they apologized and rectified themselves.

HubSpot themselves publicly apologized for an outage in 2018 and explained how they would prevent the situation from happening in the future.

Hubspot - apologize for mistakes

#3 Use experimental marketing

Refreshing your product is a great way to spark interest in the minds of your existing customers. Brands like McDonald’s, Dunkin’, Coca-Cola changed their packaging over the years. Moreover, they also provide experiences to elicit positive feelings about their product.

McDonald’s have their happy meal program. Coca-Cola’s Share-a-Coke campaign is another example. These campaigns also work as free marketing as people share their purchases online, encouraging others to try out.

Share a coke - Use experimental marketing

To track campaigns, lead sources, and other KPIs, CRM is a great aid.

#4 Make use of subscriptions

Incorporating a subscription model into your business is a great way to keep existing customers engaged. However, have a good idea of what your existing consumers want. For instance, Amazon has its Prime subscription program where consumers can access fast delivery, music and movie streaming, and more.

Amazon - Make use of subscriptions

A lot of e-commerce retailers have introduced such a subscription model. Food delivery services now waive off the delivery charges for subscribers.

#5 Make your brand unique

There will be hefty competition if people can compare your brand with another brand. But you can always highlight to your consumers how your products are different. A great example, in this case, is Apple and how they transformed their products from simple consumer electronics to more of a lifestyle product.

You can leverage your customer data using CRM, look at what your customers love about your brand, and try to use those points to stand out from the crowd.

#6 Gamification and referral programs

Gamification is a great way to keep users engaged. This method is something Amazon India does as well with their daily quizzes and Spin-to-Win games. Gamification keeps consumers browsing products for more details as they play the games.

Referral programs leverage social proof for marketing. Uber started operating in India using referral programs where consumers would receive discounted or free rides.

Uber - Gamification and Referral Programs

You can also use a CRM to manage referral coupons and codes for your business.

#7 Speak to your customers

When brands reach out for a one-on-one conversation, it shows the consumers that brands care about their opinions. An example of such a CRM customer retention strategy is Decathlon. They respond to every negative review on their website, apologize and try to rectify the issue. One-on-one conversations can be powerful when you are running an online business.

You can use your CRM to set up KPIs and see how these communications with your consumers help generate revenue.

#8 Offer personalized product/services

Customer data collection also enables personalization. Personalization allows brands to address consumers directly as individuals and not as a crowd.

For instance, you can use CRMs to send personalized mailers to consumers. They can also have one-on-one interactions on social media. Brands like Tesco, Amazon, Spotify, Xbox, Starbucks, and more provide highly personalized customer support on social media. It is possible because they have access to the customer interaction history.

#9 Offer convenience

CRM coupled with ERP can help businesses provide convenience to consumers.

For example, Starbucks has a feature within its app that allows consumers to pay for the coffee even before they arrive at the store.

Starbucks - Offer convenience

Brands like Dominos and Zomato have also adopted this feature, allowing consumers to pay for orders beforehand. Another example is Decathlon. It lets customers pay for the products and then pick the items from the store in a couple of hours.

#10 Give consumers a reason – “why you?”

Show your consumers what you stand for. Consumers often back brands that have altruistic or environmental goals. It makes consumers feel that they are a part of something bigger. For example, Toms donates a pair of shoes to people in need for every pair purchased. Brands like Pela, Thinx, Yes Straws make green products. They also donate to NGOs that take care of the environment. Since the customer plays a role in the contribution, convey the same in the purchase they make. You can also track their contributions over time and let them know the impact they have made. Look at this example from Quickride, a ride sharing app in India.

Quickride - contribution to the environment

#11 Keep things interesting

You can use software tools to understand how frequently customer visits your store. Based on that, you can keep changing your inventory, or you can start a new promotion. For example, Five Below saw that their customers visited their stores approximately once every 99 days. Based on this info, they restock and redecorate at least once every 99 days. It gives customers a novel and FOMO experience. It is also an example of how a CRM customer retention strategy can be data-driven.

Five Below - CRM customer retention strategy

#12 Offer products that solve a single most-difficult problem

You need to understand the reason why your leads are turning into customers and invest heavily in that. For instance, Canva, the graphic design platform, has become so well-known simply because they made the design easy. People no longer have to go through hours of tutorials to design something using Adobe Illustrator or Inkscape.

Listen to customer feedback and integrate those in your product and service continuously as your business moves forward. Started off as a SaaS design tool, Canva now offers a range of services like social media post scheduling, video making and editing, and more to retain users.

Canva - Solve customer problems

#13 Design unique accessories

Another way to make your customers stay is to design a product that keeps your customer coming back to you. An example would be Airwick Mist Diffuser. Here, the diffuser works with only refills from Airwick and nothing else.

Glade, Bath & Body Works, and other brands have also designed their scent plug-ins in such a way that you cannot switch to a competing product.

#14 Integrate with the customers’ lifestyle

A great way to keep a customer is to become a part of their lifestyle. It is much easier to keep an old customer if they use the product or the service as a part of their daily life. Take for example, the payment apps on our smartphones. Cash App, Google Pay, Apple Pay, Samsung Pay, and others have their unique quirks. People using one app tend to stick to it.

Just make sure that you support the services that your customers use frequently.

Apple - Integrate with the customers' lifestyle

#15 Create a community for your product

When you offer a product or a service, you should also create a platform where users can talk to each other. Not only is this a great way to collect user feedback, but it can also help you serve customers better. A great example is Flo, an app for women’s health. While there are tons of apps that help track cycles, Flo allows users to engage with each other and even chat anonymously. It helps address the isolation that a lot of people feel before they get expert medical advice.

#16 Establish a relationship of trust

Transparent marketing is the only most essential element for building trust. Trust is now the new currency when it comes to marketing. Furthermore, brands should also provide something that the customers value.

For example, the brand Minimalist reveals exactly what its product contains. Classy Curlies sells DIY kits and provides customers with blogs on how to use them. By showing your products in action, you can build trust for your products.

#17 Give your customers a reason to stay

Know why your customers are leaving and try to communicate with them. An exit survey is a great way to understand what made them churn.

An example of how to communicate with a customer who is about to leave is that of Adobe. Adobe Creative Cloud offers 2 months of free subscription (and other free services) for those who plan to cancel their subscription mid-way. By giving extra care to customers who want to leave, you can make them stay.

Adobe - Give your customers a reason to stay

#18 Thank your customers

Customers are more likely to stay when you improve their shopping experience. You can go overboard to thank new customers when they make a purchase. The clothing brand Zappos provides sends gifts to customers to show how much they are appreciated. Brands like Chewy, Epic Bars, and ZULZ Bag Co send handwritten thank-you notes. You can provide gifts, samples, even discount coupons. Wool and the Gang share their customers’ projects on Instagram, making them feel like they are in the spotlight.

#19 Offer omnichannel interactions

Offering good customer support is not enough. Brands need to support their customers via channels of their choice. You can even use other tools to get the job done. For example, Slack, a workplace communication tool, often lets people know about their outages on Twitter. Bicycle maintenance brand Looplube uses social media platforms and messaging apps such as Instagram or WhatsApp for training, sales, and support despite having their website. Brands must spend some time in customer’s shoes and understand where they go looking for information.

#20 Use the element of surprise

Surprise your customers by sending them gifts, handwritten notes, or free samples. Use the customer data to market new products and services to old customers. For example, Chewy sends handwritten notes and other similar gifts to their customers to surprise them.

Chewy - surprise your customers

#21 Educate your customers

When it comes to retaining your customers, do not just sell but educate them too. You can offer onboarding tips, provide one-on-one training sessions, provide extensive training videos, and more. For example, the bicycle retailer Bumsonthesaddle hosts training sessions, workshops, and more. Eventually, these training sessions help them to sell bike tools and accessories.

When trying new products, consumers are more likely to trust people they know – their friends and relatives. You can share testimonials, celebrity endorsements, business credentials, and more.

Consumers trust user reviews extensively. However, word-of-mouth is one of the most effective marketing strategies that allow brands to use current customers to get new ones.

Bumsonthesaddle - Educate your customers

#22 Leverage Social Proof

When trying new products, consumers are more likely to trust people they know – their friends and relatives. You can share testimonials, celebrity endorsements, business credentials, and more.

Consumers trust user reviews extensively. However, word-of-mouth is one of the most effective marketing strategies that allow brands to use current customers to get new ones.

#23 Collect extensive feedbacks

Feedbacks allow consumers to expose potential problems with the brand. A customer may be unhappy with the purchase procedure even if they like the product. Or a customer dislikes the shipping procedure, but the brand uses third-party shipping, and there is no way to improve it.

Surveys allow customers to express their opinions. The shorter the survey, the more feedback you can collect. If you want comprehensive feedback, you can even give incentives to customers, such as discounts or vouchers.

For example, Best Buy gives points for writing surveys, which users can redeem at the store. Starbucks launched My Starbucks Idea back in 2008 to improve its services.

#24 Make returns easy

For SMBs, processing returns can be difficult and may even incur losses. However, to ensure that customers stay happy, you need to make returns and refunds easy.

For example, flower and gifts retailer Ferns N Petals instantly provides a refund or replacement if the product is unsatisfactory. Ikea has a 365-day no-nonsense return policy. Casper takes it a step further and donates returned items to charity. When you create a return policy for your website, be clear, concise, and use simple language. The Bonobos return policy page is a great example.

#25 Reward loyal customers

A great way to keep customers coming back is by creating loyalty programs. You can use a points system that The North Face uses. Alternatively, you can implement a VIP membership program like Barnes & Noble that offers discounts every time you shop. You can even have a tier system that e.l.f. Cosmetics use. It is also a way to incorporate gamification into the rewards program.

The north face rewards


Keeping your old customers is not only easier, but it is also more profitable than solely focusing on new customers. These twenty-five customer retention strategies can help you tune your marketing campaigns and use your existing business tools more effectively.

LeadSquared is a leading CRM software trusted by over 1000+ brands worldwide. If you are looking for sales and marketing automation along with all the essential CRM features, LeadSquared is the way to go.

For more information, please feel free to contact us at

While the Indian economy steeply recovered from the effects of the first lockdown, the second wave of the pandemic increased the risk in the credit profiles of borrowers – making credit risk management the need of the hour.

Moody’s, a US-based credit rating agency, commented upon the recovery of the economy: 

“A severe second wave of the coronavirus has increased risks to the outlook with potential longer-term credit implications. Risks to India’s credit profile, including a persistent slowdown in growth, weak government finances, and rising financial sector risks, have been exacerbated by the shock.”

Rising credit risks also leads to an increase in interest rates that can further lead to a decline in credit growth in banks. Authors of a recent RBI study suggest that banks have accumulated high NPAs over the last few years. This increased risk can prompt banks to increase their interest rates, making it difficult for borrowers to procure loans. 

Therefore, to resolve this challenge banks must develop flexible risk assessment and management processes.

In this article, we will discuss the nature of credit risk and different risk management tools and techniques to help banks curb risks and sell better.

A Guide to Credit Risk Management for Indian Banks

What is credit risk?

RBI defines credit risk as: “The possibility of losses associated with diminution in the credit quality of borrowers or counterparties. In a bank’s portfolio, losses stem from outright default due to the inability or unwillingness of a customer or counterparty to meet commitments concerning lending, trading, settlement, and other financial transactions. Alternatively, losses result from a reduction in portfolio value arising from actual or perceived deterioration in credit quality.” 

In simple terms, banks experience credit risk when assets in a bank’s portfolio (borrowed loans) are threatened by loan defaults. Credit risk is a sum of default risk and portfolio risks.

Default risk happens due to the inability or unwillingness of a borrower to return the promised loan amount to the lender. Whereas, portfolio risks depend upon several internal and external factors. Internal factors can be bank policy, absence of prudential limits on credit, lack of a loan review mechanism within the company, and more. 

External factors may include the state of the economy, forex rates, trade restrictions, economic sanctions, and more.

The presence of credit risk deteriorates the expected returns and creates more than expected losses for banks. 

What are some major types of credit risks?

 Now, banks can experience five major types of credit risks:

  • During the repayment period, i.e. when the borrower does not repay the amount.
  • When selling off a secured asset does not yield expected returns.
  • In case when a series of repayments stop due to some unexpected reasons.
  • Credit risk due to loss of funds while settling acquired securities.
  • Risks while payment to offshore organizations when they are under sovereign jurisdiction.

To offset such risks, banks must use various credit risk management tools and techniques. Let us look at some of those.

Techniques and Tools for Credit Risk Management

Techniques and Tools for Credit Risk Management

Credit Approving Authority

Banks can create a multi-tier credit approving system where officers review the loan before sanctioning it. It can help reduce the chances of any new credit risk. To maximize this benefit, banks can create a grid of officers, and they can operate on multiple levels of the organization i.e., regional offices, zonal offices, head offices, etc.

Additionally, the grid/committee could oversee the sanction of high-value loans by carefully assessing borrower creditworthiness. To ensure the best quality of credit decisions, banks must review them periodically.

Banks can also use new-age Lending CRMs like LeadSquared to conduct pre-screening checks and analyze credit profiles while onboarding prospective borrowers. Not only will this accelerate the screening process but will also maintain borrower credibility.

Prudential Limits

Banks can set up prudential limits on various KPIs such as debt-equity and profitability ratio, debt service coverage ratio, and other important ratios. Further, they must ensure that the loan policy mentions the most permissible deviation that can be allowed from these KPIs. Based on the concentration risk, banks can also reduce their credit exposures to individuals who enjoy credit facilities excess of their capital threshold.

Even while lending to industries, banks can set limits for every sector. Based on the stress on each segment, banks can adjust the exposure and lend with reduced risk. Banks can do this by limiting new advances against assets that can experience high price volatility and, hence credit risk. While lending to distressed sectors, banks must adequately back their credit by collaterals and strategic considerations. Prudential limits must be reviewed periodically. It will factor in other market-related issues and improve credit risk management.

Risk Rating

Rating borrower creditworthiness is standard practice across all financial institutions. However, banks can also create a separate risk scoring/rating method for internal purposes. It will give loan officers a clear understanding of the risks involved as time passes on.

Risk rating will help banks understand individual credit behavior better and the overall risk within their portfolio. The rating can be designed on various quantitative and qualitative factors such as:

  1. Financial analysis
  2. Projections 
  3. Financial ratios; and 
  4. Other operating parameters.

Banks can improve their rating mechanism by weighing these ratios based on years. It will give a higher degree of importance to near-term developments and make ratings more accurate. In addition to this, separate scales for rating can be devised for different borrowers to personalize risk assessment and improve the system’s flexibility. To ensure that these rating models remain relevant and consistent, they should be rechecked and revised. It will enable banks to identify variations that could cause any future credit losses and address them quickly.

Risk Pricing

Pricing your loan products based on risk categories of borrowers is important to curb credit risks. Generally, borrowers having less than average credit history or weak financials are categorized as high-risk individuals and subjected to high interest rates.

To ensure higher accuracy, banks should price credit risks based on the expected probability of default. Internationally, large banks have implemented the Risk-Adjusted Return On Capital (RAROC) framework, which adjusts the interest rates based on the expected loss on loans from the start itself. The banks then allocate some capital to cover up the losses incurred on the prospective loan.

The RAROC framework helps banks in effective credit risk management and provides better loan pricing to borrowers.

Analytics for Risk Detection and Control

Through AI and ML, banks can now analyze customer credit history to foresee changes in their credit behavior. Banks can detect any change in the risk profile of the customer and make effective credit decisions. 

This real-time insight into customer behavior will allow banks to take proactive measures. It will help them design effective credit frameworks and install policies to reduce credit risks. Data analytics can also be applied to simulate stressful environments for lending processes and to find out credit weaknesses. 

Portfolio Management

Appropriate risk rating/pricing can enable better portfolio management. Banks must identify patterns in the migration of borrowers based on the change in their credit quality. The data will provide banks the insights they need to identify the quality of their loan books and take corrective actions if necessary. Additionally, banks can also:

  • Create credit ceilings based on borrower ratings to limit credit exposure.
  • Understand the rating-wise distribution of borrowers in various industries.
  • Limit exposure to segments based on the pros, cons, and current financial state. In case the industry is going through a period of stress, banks can increase the quality standards required to borrow from them.
  • Design and undertake stress tests to identify weaknesses in their credit administration, policies, and tools to improve their credit risk management process.

Loan Review Mechanism

An LRM is a great tool to understand the quality of loan books and bring qualitative improvements in credit-related decision-making. LRM can help banks identify large value loans that can potentially develop credit weakness and create a proactive approach to credit risk management. Additionally, LRMs are also very helpful in:

  • Identifying adequacy of and adherence to loan policies, procedures.
  • Checking compliance with government laws.
  • Supporting existing credit risk management infrastructure.


Conclusion Image

Effective credit risk management starts with assessing the borrower’s profile and continues till recovery and beyond. Banks must create agile lending processes equipped with relevant rating systems to identify creditworthiness and charge appropriate interest rates. This will help them cover up any potential loan defaults that may happen in the future. Banks must also allocate enough capital to cover up any major loan losses and remain afloat. Such practices are necessary to reduce higher default probabilities and improve the health of loan books.

LeadSquared’s new age Lending CRM is helping leading Indian banks identify creditworthy borrowers during the onboarding process and creating an additional layer of security for credit risk management. Take the free trial to experience the features yourself.


What is risk management in the banking industry? 

Risk management is a proactive process to identify any potential loan losses that may occur due to some reason and reduce the overall risk in your loan portfolio.

How to manage operational risk in banks?  

Banks can experience operational risk in the event of a breakdown of internal controls and corporate governance. It can lead to loss of finance through error, fraud, or the inability to perform required functions promptly.  
The banks can manage operational risks by setting up risk monitoring systems to gauge the performance of operations, set up operational limits, create contingent systems, and design policies to offset such conditions which can cause risk. Lending CRM is also a helpful tool to assess the borrower’s profile and disburse loans faster.

What is the credit risk management process?  

Credit risk management is a process through which financial institutions (FIs) can cut/mitigate any possible credit risks in their loan portfolio. FIs can do it through several tools and techniques such as setting up credit approving authorities, risk rating, risk pricing, portfolio management, and loan review mechanisms.

The past year has been a challenge for the lending industry. While the government and businesses took measures to combat the effects of the pandemic, one question remains. How can lending institutions show agility in the face of any new business challenges caused by unforeseen circumstances?

Key Discussion Points:

  1. Identification of creditworthy customers to stay ahead of the competition
  2. How to leverage your existing customer base to create new opportunities
  3. Traditional vs. Focused processes in lending
  4. How to improve customer experience and build lasting relationships
  5. Understanding how technology improves marketing penetration and aids in creating a sustainable pipeline

“Lending today has become a lot more scientific instead of being an art form.”

KV Srinivasan, Executive Director & CEO, Profectus Capital


KV Srinivasan, Executive Director & CEO, Profectus Capital

An alumnus of the Indian Institute of Management, Ahmedabad (1989), KV Srinivasan is also a member of the Institute of Chartered Accountants of India (1985) and Institute of Company Secretaries of India (1987). Having worked with ICICI Prudential Life Insurance, ITC Classic Finance, Reliance Life Insurance, and Reliance Commercial Finance, Srinivasan has over three decades of experience in the BFSI sector. Srinivasan is the Director of the Finance Industry Development Council. He is also the Co-Chairman of the NBFC Committee of IMC Chamber Of Commerce. 

Nilesh Patel, Co-founder & CEO, LeadSquared

Nilesh is the CEO of LeadSquared, a sales execution platform loved by over 1000 brands across the globe. He aims at helping businesses in high velocity, high volume sales to improve their sales execution and increase sales efficiencies. He is on a mission to build LeadSquared as the software partner of choice for sales execution for businesses. Previously, Nilesh was the founder of Proteans, a recognized name in the software product development services space. Nilesh has a degree in engineering from Delhi University, and before founding Proteans, he has spent four years in IBM with their microprocessor test tools division.

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Key Discussion Points:

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Karthik Palaniappan 
Founder and CEO, August Academy

After a Ph. D. in Aerospace Engineering from Stanford University, Karthik decided to start August Academy in 2013, which is now one of India’s leading MBA Admissions consulting firms. Their students study at some of the world’s premier business schools including Harvard Business School, Chicago Booth, Kellogg, Dartmouth Tuck, Berkeley Haas, and more, and have attained over USD $ 5.5 Million in scholarships.


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