Four Tips for Developing a Referral Program
There's an old adage that says, "Everyone wants to go to heaven, but no one wants to die to get there." That can be realistically revised to apply to insurance agencies: "Every agent wants their agency to grow exponentially, but no one wants to ask for referrals to get there."
Big mistake. Really big mistake. The chances of exponential agency growth without a successful referral program are about the same as getting to heaven without dying.
Why Do Agents Hate to Ask for Referrals?
It's not that they don't want to. It's that they have been led to believe that the two leading killers of referrals are really upstanding citizens.
"If you can't close the sale, at least get a couple of referrals." How's that been working for you? Is it anything even close to realistic to expect a lost sale to refer other potential clients? Of course not.
- "After you close the sale, get a couple of referrals." Yeah. That's the ticket. After spending a couple of hours proving how much the client means to you and your agency, let them know that it's not really about what they need - it's all about what you need.
The answer to the question is obvious. These methods don't work. But that does not mean that referrals are not important. Nor does it mean that there aren't better ways to get them.
Four Things Necessary for Developing a Successful Referral Program
A Sense of Trust. The truth is that people like referrals, but they must be from someone with whom they already have a good relationship - someone they trust. People ask friends, neighbors, and co-workers for recommendations every day. Those friends recommend someone they trust.
A Sense of Timing. Before asking a new client to give a referral, give them at least enough time to get past buyer's remorse. Plus, it's never a good time to ask a lost sale for a referral. What would their motivation be? (Money? Keep reading.) Satisfied, loyal clients are the key source of worthwhile referrals.
A Sense of Value. Never offer money for a referral. Although the referrer may like the reward, if the potential client suspects or learns that is the case, that information can be detrimental to both the referring friend and your agency.
A Sense of ROI. Handled in a friendly and professional manner, referrals should never cost anything but time. Referrals are word-of-mouth advertising, the least expensive available. Don't relegate them to the back burner, waiting for times when things around the agency are slow.
There are probably hundreds of tactics and tools to employ for getting referrals, including email and social media. Regardless, none will work as they should to effectively promote your agency, if they are not applied within the context of these four essential tips.
Make sure your clients are happy. That's the most important issue. When they're happy, they'll be referring people to your agency without you even asking, but they will also give referrals willingly when you do ask.
American Agents Alliance is here to help you build your agency. Get in touch with us. We will be more than happy to show you how to build a better referral program.