Too much of the same types of customers can lead to massive exposures in your business, it’s sort of like investing all your retirement savings on one stock or stepping up to the roulette table and putting in all on red. If a majority of your customers only buy one or two products from you it might be time to offer more variety. If all your customers are the same age, you might want to think of attracting new segments. These seem like basic principles, however, many insurance businesses rely on only one or two products to drive profit and very reliant on an aging consumer.
“Share of wallet” is a popular term to describe how much product a customer buys from you; if a customer has 5 insurance products (the wallet) – how many do you service (your share)? Two things to think about here; one if you only service 2 out of five how do you get the other 3? Let’s say you have all 5; are there new products you can offer to expand the wallet to 6 or 7?
Have a look at your customers, what’s their average age? Group your customers by age – do you see a gap or bulge? Boomers might be your big spenders today; however, what are you doing to attract the big spenders of tomorrow? Take for example a Bank that runs a “basics of money” class in a grade school – now that banking on future customers.