“People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.” -Mark Zuckerberg
It's no secret to most insurance agents that referrals are valuable.
In this post, we're diving into 5 compelling statistics about referrals and what they mean for you and your agency.
1. Referrals Convert!
According to this data from Marketo, the conversion rate for referrals is almost 11% - at least 4 times higher than other leads/marketing channels.
What does this mean for your agency?
Time and money spent on getting referrals will likely bring a higher ROI than other lead sources.
*Image source: Marketo
2. What your customers say about your agency > What you say about your agency
According to a study by Nielsen, 92% of consumers trust word of mouth "advertising" more than advertising coming directly from a brand or company itself.
Also, over HALF of millennials look to family and friends for recommendations in order to make the right insurance purchases (Agency Nation).
What does this mean for your agency?
What somebody else says about your agency is much more powerful than what you say about your agency - for better or worse.
3. Referred Customers are, quite literally, a gold mine.
Customers referred by word of mouth have a 37% higher likelihood of remaining a loyal, long term customer than other customers (Deloitte).
The lifetime value of a referred customer is also 16% higher than non-referred customers (Review 42).
What does this mean for your agency?
If you want to increase the monetary value of your book of business, referrals will get you there.
4. Referrals are some of the best quality leads.
According to Forbes, “marketers rate referrals as the 2nd highest quality of leads.”
What does this mean for your agency?
Focusing your efforts on obtaining and converting referred leads is an effective and efficient use of your time.
5. A Formalized Referral Program = More Revenue
According to Heinz Marketing,
"Companies with formalized referral programs experience 86% more revenue growth over a two year period when compared to the rest." (Socialphin)
What does this mean for your agency?
Implementing a formal referral program will aid in increasing your revenue. Simply "focusing on asking for more referrals" won't lead to the results you're looking for.
Get some ideas for your referral program here: Take the Awkwardness Out of Asking for Referrals: 4 Non-Invasive Referral Program Ideas
A Referral Program + Regular Customer Insurance Reviews
One of the many benefits of regularly meeting with your customers is the chance to enhance the customer experience (which leads to more referrals), and the opportunity to educate your customers about your referral program and all the products and services you offer.
Neglecting to put time and energy into your current customers is a surefire way to cut yourself off from lucrative referrals who could otherwise turn into life long customers.
How do you prioritize referrals at your agency? Feel free to share in the comment section below!