Don’t underestimate the power of referrals. When you’re trying to grow your business, few methods are more effective than word-of-mouth advertising. However, referral business may not simply fall into your lap: if you want to gain more referrals, you have to earn them.
Referral Business Is Worth the Effort
If you needed to hire a plumber, would you be more likely to trust a recommendation from a friend or from an advertisement? If you’re like most people, you chose the friend. Your prospective insurance clients feel the same way. Although marketing is often effective, nothing beats word-of-mouth advertising. If you can turn your current clients into loyal advocates, you’ll create a steady stream of new leads.
Although referrals are a low-cost way to generate leads, earning them takes some planning and effort. To make referrals part of your growth strategy, you will need a proactive strategy. Below are six tactics to include:
1. Provide exceptional service.
Customers are more likely to recommend you if they feel that your service is exceptional. What makes an insurance agency exceptional? According to Property Casualty 360, 42% of customers cite communication as the main factor that determines whether they’ll recommend an agent to their friends, family, or business partners. In contrast, only 22% of customers cited price and another 22% cited attitude.
If you deliver a mediocre or even a “standard” level of service, you shouldn’t expect your clients to rave about you to all their friends and relatives. To ensure your service is exceptional, consider surveying customers regularly. This will help you identify how you stand out and how you can improve.
When you receive a glowing testimonial, share it in your newsletter and on your website to plant the “exceptional service” seed in other clients’ minds. If people see that other clients are raving about you, they may pay more attention to the level of service you deliver.
2. Check in on your clients regularly.
Imagine you have a customer who is extremely satisfied with your service. She would be happy to recommend you, but she doesn’t know anyone who needs help with insurance. Six months later, one of her friends needs an agency. By then, though, your customer hasn’t thought about you for a while and can’t recall your name immediately. The referral opportunity is lost because you weren’t top of mind.
To earn referral business, you must stay top of mind with your clients. This requires ongoing communication on at least a quarterly basis. Touchpoints can include:
- A monthly e-newsletter.
- Birthday and holiday cards.
- Social media posts.
- Personal phone calls to check in with clients.
- Relevant risk management tips and articles.
- Mid-year check-up and loss run review.
- 90-day pre-renewal planning session.
3. Ask for referrals.
Your clients may not realize you would like referrals. They may even assume you’re not looking for more business. By asking for referrals, you establish a human connection and encourage your clients to think about the people they know who might need insurance services.
As you request referrals, change your perspective. Don’t think of it as asking them for a favor; think of it as giving them a favor. After all, you know their friends will be thanking them once they experience your exceptional service and expertise.
If you still feel self-conscious, take comfort in knowing that asking for favors may actually make you more likeable. This is called the Benjamin Franklin effect.
4. Provide extra business cards.
When asking for referrals, make it easy for clients to pass on your name and contact information. The easiest way for them to share your information is through the old-fashioned business card.
When you meet with clients, give them extra business cards to share with their friends and family. You may also want to include a few business cards when you send mailers to your clients.
5. Thank your clients for referrals.
When you receive a referral, don’t let it go unnoticed – even if it doesn’t result in a sale. By taking the time to personally thank the client who referred you, you show that you appreciate the gesture. This will make the client feel good and may result in additional referrals down the road.
You may be interested in providing a gift for referrals. However, you’ll need to make sure you won’t be running afoul of any state anti-rebating laws. Also consider other regulations – CMS, for example, has strict rules for agents who sell Medicare insurance.
6. Seek referrals from other professionals.
Happy clients aren’t your only source of referrals; other professionals can also provide you with a steady stream of business. These are called “centers of influence” and networking with them is a fantastic way to grow your business. Look for other professionals who provide services for clients with needs similar to your clients. For example, if you sell homeowners insurance, you may want to network with real estate agents or moving companies in your area. If you sell long-term care insurance, consider networking with adult care homes or estate planning attorneys. You should also consider networking with agents who sell different lines of insurance. Of course, these relationships are reciprocal – you refer clients to them and they refer clients to you.
Do You Need Support?
Delivering a referral-worthy service is easier when you have support. Heffernan Network offers access to national A-rated carriers and exclusive programs and products. We also provide back-office support and market intelligence. Learn more.