There is no lead more powerful than one gained through a referral.
According to the National Association of Professional Agents (NAPA) 82% of consumers trust referrals from people they know. New business through referrals can be your most powerful tool for growing your agency. Seventy percent of consumers trust branded websites, 61% trust brand sponsorships, and 56% trust email newsletters that they signed up for.
While a professional website, content marketing, and email campaigns are all important pieces of your marketing strategy, if you aren’t tapping into the power of referrals, you’re missing a golden opportunity.
Despite their potential for new business, many agents are reticent to ask for referrals. Dale Carnegie is famous for saying that 91% of clients are ready to give a referral while only 11% of service professionals ever actually ask for one. And according to a 2018 Texas Tech University study, more than 8 in 10 clients are willing to make a referral, but only 29% do. The difference comes from the relatively low percentage of businesses that have an aggressive and efficient system for requesting referrals.
Don’t let yourself fall into the referral avoidance trap. The best strategy for referral marketing is to create a system that runs year round. With the new stream of income you receive from referrals, you’ll wonder why you waited so long to get it going.
1. Create a referral list
Your clients are your greatest resource when it comes to marketing. You can proclaim that you are the head of the pack when it comes to providing service value, but when someone who has worked with you gives their endorsement, it means so much more. As you provide your clients with satisfying experiences, add them to a mailing list specifically for referral marketing. They don’t have to be your biggest fan, just any client with whom you have demonstrated your unique service proposition.
You don’t have to limit your referral list to current clients either. You can seek out advocates for your business by reaching out to anyone you currently interact with, previous customers, vendors, industry contacts, and other groups. Once you have a referral marketing list, it’s time to attract referrals using email marketing and other promotions. Promote your program through multiple channels for broad reach and an increased online presence:
- CTAs & email signatures
- Product updates
An excellent way to put your program in motion is by sending an email announcing your referral program. Keep it brief and easy-to-understand. Include content that identifies the types of customers that can benefit most from your services.
Consider creating a referral kit filled with resources for your clients to share with people they know. This can include case studies, testimonials, ebooks, and videos — anything referrals would be attracted to share. Make sure each medium includes consistent messaging and calls to action to turn those leads into prospects
2. Asking for referrals is all about timing
There are not absolutes when it comes to when and how often to ask for referrals. There’s only one rule: the client you ask must be completely satisfied with your services or product. Asking a dissatisfied client for a referral isn’t just a waste of time — it could further damage your reputation with them and people they know
Getting the timing right can be a little tricky. Asking too early can seem pushy, and asking too late can be interpreted as neglectful thinking. We recommend asking your customers for a referral about four times a year. By spacing your requests out quarterly, it will not feel as though you are pestering your clients, but it will keep you top of mind when they are interacting with friends and family who might require a new policy.
Don’t feel awkward about asking for referrals. It is a great opportunity for your clients to demonstrate value to their friends through you. Be sure to treat referrals like gold. They not only represent an opportunity to gain a new client, but they are an opportunity to make your existing clients look good which will increase their retention and longevity.
3. Provide an incentive
It is always beneficial to provide your clients with a carrot to motivate them to give a referral. Surprisingly, when it comes to asking for referrals, a University of Chicago study found that non-cash incentives are 24% more effective at boosting performance than cash incentives. The value of the incentive has little influence on how much it motivates clients to take action.
We suggest offering a digital asset like an ebook or white paper to inspire your clients to help attract referrals. It is an excellent way to show your appreciation without adding any additional cost to your referral program. For select segments of your client list, you could even promote something more attractive, like a discount or credit on your services. Airbnb is a prime example of this action: When a customer refers someone, they get a $20 credit — and when a customer first signs up, they get a credit towards their first booking.
4. Automate the process
Getting more business through referral requires excellent service and products, but it also takes consistent promotion and engagement. To help your referral program reach its full potential, it’s important to automate the process and empower clients to make recommendations. Marketing automation boosts efficiency, lessens your workload, and keeps your referral program working 24/7.
Consider these automated marketing stats:
- Companies using automation for email marketing earn twice as many leads as those that don’t.
- Seventy-five percent of companies using marketing automation see a return on investment in a year.
- Companies using marketing automation increased sales by an average of 34%.
- Ninety-one percent of those using marketing automation say it is “very important” to the success of their program.
Agency Revolution offers Attract™ a suite of products that includes a referral generation campaign that will automatically mail your most satisfied clients four times a year asking them to refer their friends, family, and colleagues. It drives them to a dedicated referral page installed on your website that will capture the new prospect’s information. We even provide you with a digital download to use as an incentive for your clients. If you’re ready to attract referrals and grow your business, don’t hesitate to contact our representatives about it or request a demo today!