Why Referrals Can Help You Grow Your Insurance Business Faster

Why Referrals Can Help You Grow Your Insurance Business Faster

A good insurance referral system is one of the most important marketing elements for independent insurance agencies & brokerages to grow their business. Take care of your clients and they can offer a nearly endless supply of referral leads. Let’s take a look at some of the top reasons referrals can help you grow your agency or brokerage.

Insurance Referrals Consistently Deliver a High ROI

Referrals are some of the most viable leads you can generate—here’s the proof from Forbes:

  • Referral programs generate excellent leads, according to 78% of B2B marketers
  • Referral programs generate a high volume of leads, says 60% of marketers
  • More than half (54%) of B2B marketers say that referral programs have a lower cost-per-lead than other channels
  • Marketers rate referrals as the second highest source of quality leads.

According to a recent study, more than 8 in 10 clients are willing to make a referral, but only 29% do. The difference comes from the low percentage of agencies and brokerages using an aggressive and effective insurance referral strategy.

Referrals Are Ready to Close

Referrals come to you already “warmed up” by their friends and family. A lot of people don’t like feeling “sold to.” When you’re talking to a referral, you’re talking to someone that is not only seeking the kinds of services you offer, you’re talking to someone who already has a level of confidence that you’re the solution to their insurance needs.

As an independent insurance agent or broker, you understand the importance of referrals for generating promising leads. According to the National Association of Insurance Commissioners, as high as 79% of insurance shoppers ask family and friends for recommendations, while 65% turn to work and social acquaintances.

When you introduce your products and services to a referral, you face fewer sales objections than you do with other leads. As savvy referral marketers know, the closing ratio for referrals can be as high as 70%, while the closing rate for non-referred leads can be as low as 10%.

Referrals Often Become Ideal Clients

Referred customers are more loyal than non-referred customers because they have a relationship with fellow customers. Referred customers can get reliable guidance about your offerings from someone they trust. This relationship strengthens the referral’s trust, loyalty, and satisfaction with your agency or brokerage.

Think about how powerful that is: Every time you close an insurance referral, they’re more likely to become a long-term client that also refers others. With a well-designed referral lead generation system, it’s like you have an automatic feed of viable leads.

One thing to keep in mind is that loyalty is a two-way street. If the referrer leaves you, the referred customer may not stick around because of their loyalty to the referrer. The best way to combat this trend is to nurture your relationships with referrals to create a stronger bond with you and your business.

Referring Clients Become More Loyal

Dr. Robert Cialdini spent a lot of time documenting and writing about this interesting psychological phenomenon: When someone reaffirms their decision to do business with you (by referring a friend or family member to your services, for example), the referring client becomes event more committed to your agency.

Not only that, but by reaching out to them and telling them that their help mattered to you and your business, you deepen the relationship and remind them they’re “not just a customer.”

Referral Programs Create Stories Worth Sharing

Referral programs are a fun way to engage your customers. If you do it right, you create excitement and turn your happy customers into ambassadors who help you grow your brand.

Every time you hand out an incentive or recognize your referrers, see if they’re willing to swing by for a photo. Announce it. Share that experience on your website. Better yet, share it on social media. You just created and documented a fun experience! Be proud. Have fun.

Show your community that you aren’t just another company. You’re a local business full of real people that get excited when their clients are happy—the perfect story for sharing! Stories are powerful, and if your customer is compelled to share their experience, prospects will listen.

Your Number of Referrals is a Reflection of Your Current Relationships

A well-run referral program is a great way to keep your finger on the pulse of your relationships with your customers. If you’re asking for referrals, but you’re not receiving an appropriate number for the size of your agency, that could be a sign of deeper issues. It may be time to take a loot at how your agency or brokerage is nurturing customer relationships.

It’s Easier Than Ever to Tap Into the Power of Referrals

Thanks to modern technology like Agency Revolution’s Attract™, running a good referral program has never been so easy! Our suite of tools makes automating email messages or sharing on social media and your website an effortless experience. Not only that, Attract™ even comes with a ready-made referral rewards campaign that you can use as-is, or modify to fit your agency or brokerage personality!

You have every reason to build a referral program. Referrals have a high closing rate usually become some of your best clients. And these days, running a great referral campaign is easier than it has ever been! A rewards program is a fun way to show appreciation to your customers and create great experiences that are worth sharing online. And since you’ve taken such good care of your existing customers, referrals are a rewards well-earned.

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