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Agents and brokers have every reason to love referrals so much. Unfortunately, most insurance marketers do it the wrong way.

Here are 5 Quick Tips To Get More Referrals.

Why do insurance agents and brokers love referrals so much as part of their marketing strategy? That’s easy:

• Cheap, cheap, cheap customer acquisition cost. Done well, as close to being zero as possible.
• Here’s a weird psychological twist. According to research by Bain & Company, people who are referred come “pre-baked” as highly loyal insurance clients – unlike almost every single lead you buy or advertise for. (And, as we’ve explored in previous blog entries, loyal clients deliver much, much more lifetime value.)
• Referrals are a great “finger-on-the-pulse” of the health of your customer relationships. Referrals don’t happen in a vacuum. Loyal clients deliver referrals.
• Another weird psychological twist: when people make referrals, they automatically become better customers themselves. Robert Cialdini carefully documented, that when someone acts on a decision (like giving a referral) – no matter how small – it makes a huge difference in their loyalty. (Like 400% more.)

What do most agents and brokers do wrong?

The biggest problem: passive, passive, passive. No business process. Nobody in charge. No discipline. (The number of times I’ve heard principals tell me, “We get most of our new business from referrals,” while committing zero business discipline to proactively making that happen is enough to make you weep.)

5 Quick Tips for Tripling Your Referrals In 6 Months or Less

First, it is a formula. N+P+P+P=tons of referrals. Nurture + Program + Promotion + Persona. That’s reflected in the first four points below.

1. Nurture your clients more.

Since, according to Deloitte, 60% of the clients of independent insurance agents feel neglected already, there are plenty of reasons to do this anyway. Agencies who nurture their customer base make more money. Much more. One reason: loyal clients deliver 250% more referrals than neutral clients.

1. Stop being passive.
   

   

Have a Referral Program. I’m not talking rocket science. Create a fun program so that you reward the behavior you want repeated. I’ve got clients with silver, gold and platinum members of their Referral Program, with clients banging on the door to get to the next level. Now, apply the 80/20 Principle here. Do something small and get something big. A Starbucks card and a thank you note delivered sent within 24 hours.

The point is: client sends you a referral, you show your gratitude, and, perhaps, add a smile with a little gift. (Stay within the rules of your insurance department. In most states, you should reward every referral, not just the ones you close.)

Years ago, when gas prices were on the rise, debates raged among my clients about whether gas card, Starbucks gift cards or a co-sponsored card was the key to the Magic Referral Kingdom. One might get a better response than the other – but ultimately, “it ain’t about the gas card.” It’s about doing something – and doing it consistently. (And the other stuff below.)

Here’s one twist to seriously consider in your Referral Program. Make a charitable contribution for every referral you get. Dave Stauffer, a long time client of mine in Canada, first doubled his referrals by creating a “program” – and then doubled them again when he made charities the beneficiary of the program. (Yup, quadrupled.)

1. Promote it.

Bluntly put, the greater purpose in having a “program” is to give you something to promote. Put your program together, and now you’ve got something to talk about.

• Put it on your website.
• Remind your clients about it through your email marketing system.
• If you have a big monthly winner – a client or a charity or both – take pictures and put that on your website.

A little secret: 80% of your referrals will come from 20% of your book. You may even get 95% from 5% of your book.

Why? As Malcolm Gladwell demonstrated in his best seller, The Tipping Point, some people are by nature, “social connectors.” These people thrive on connecting people with other people. You probably have friends like that. My former client, Umberto Fedeli exemplifies that: if you want to know someone in Ohio, ask Umberto.

Part of the purpose of the “promo” part of the Referral Formula is to smoke these people out. Once they’re found, they’ll thank you for the chance to play.

1. Persona…in other words: be a real person.

Here’s where the idea, “it ain’t about the gas card” takes root in reality. Gas card, Starbucks cards…all that adds a little juice to your Referral Program. That’s the surprise in the Cracker Jack box. But the deep, core psychological reason that people give referrals is because it feels good to help people. We’re a tribal species that depends on relationship for everything from happiness to survival. And the terrific thing about referrals? They’re a two-sided winner: giving a referral helps your colleague and your agent.

Copying one another’s successful marketing has been a great shortcut for our clients over the years. But it has a dark side. I recall critiquing a client’s referral flyer some years back and barked at him: “I can’t tell if this is from you or – other than the address and logo – some agency in Timbuktu. People don’t want to make referrals to a ‘flyer.’ They want to make referrals to a human being.” Remember:

• The more your marketing reveals yourself as a human, the more that the other members of your tribe will refer to you.
• Say “thank you.” Say it again. Use words like “gratitude, appreciation, thanks.”

1. Use marketing automation software to simplify, automate and execute.
   

   

Anything worth doing in business is worth creating a business system for.

And nothing supports systems like technology. Good use of modern communication technology can do this for you:

• Guide your customers throughout their customer journey with you. By delivering the right message to the right person at the right time – personalized – you will create a deeper sense of relationship and appreciation. The economics of the industry rarely support our desire to stay in meaningful contact with our customers. Technology solves that problem.
• Technology can easily deliver meaningful communications throughout the year. The care you show by sharing safety and risk management tips to families, businesses and individuals show what you stand for. Technology lets you go from “wish I did” to “done” in minutes. (For the year!)
• And of course, you can promote your Referral Program using insurance marketing automation. You can drive people to a landing page, a web form, to call you…or just remember you and remember your program.
• Be transparent and human in your language. One of our email conversations starts like this:

Hi <FirstName>, Thanks again for choosing to do business with us.

May I ask a quick favor?

Our business ‘works’ because of people like you. Good business relationships and word-of-mouth is very important to me personally. It also means so much to our team, and to all of our families.

Then the message goes on to ask – in simple language – for help. People like to help. And they like to help people. Be real.

Referrals are the lifeblood of the agency and brokerage channel. After all, it’s the “real people in real communities” that make us different than the direct channel. It’s our strength – let’s build on it. Just because the consumer has “gone digital,” doesn’t mean they don’t have “real conversations” with their friends and colleagues. Your digital communications should build on what matters to you: making deeper, stronger relationships, and from time to time, asking those relationships for help. This is what makes the world go ‘round.