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7 New Tips for Creating an Agency Culture of Receiving Referrals


You know it; We know it. Referrals are valuable.

They’re usually the least expensive lead type to acquire and typically spend up to 25% more on the initial purchase than non-referred customers. (Go Nectar)

They’re often an easier sale as well - according to a study at Nielsen, consumers are 4 times more likely to buy when referred by a friend. (Nielsen)

The lifetime value of a referred customer is also about 16% higher than non-referred customers. (Go Nectar)

I could go on and on with more compelling statistics about referrals (which I’ve already done here,) but chances are, you’ve probably heard them all.

Finding and executing a process to receive referrals seems to be the most challenging part for most insurance agents.

You can easily google “insurance referral program ideas,” and you’ll get tons of ideas for referral programs.

From incentivizing your customers with gift cards, raffle drawings, and business pass-along cards, there’s no shortage of different ways to get referrals.

I did some research to find tips and ideas that aren’t discussed as much - tweaking your current referral program or introducing a new element to it could give it the extra push it needs to take off and bring in those treasured referrals.

Here are some valuable tips I found:

First and foremost: Provide exceptional service (needless to say)

It should go without saying that the first thing you need to do to get referrals is do your job and do it well.

Insurance agent meets with older couple to review their current coverage.

I don’t know about you, but I’m not referring my friends to a business that didn’t communicate well or deliver the service/product I needed.

1. Timing

Have you ever asked for a referral at an awkward time and immediately wished you could un-ask the question?

If you want to avoid awkward interactions with your customers, don’t ask for a referral when they’re unhappy with your agency for whatever reason(warranted or not).

Maybe they’re in the middle of a stressful claim or unhappy with their premiums.

Read the room.

And make sure your producers also know how to read the room.

More opportune times to ask for a referral could be…

  • Shortly after a smooth onboarding process

  • When you’ve saved them money by bundling/discounts

  • After pleasant interactions with your agency

  • After you’ve helped them with a claim

  • At an annual review appointment that is going well

2. Identify Prime Referrers

Segment and identify the customers that bring in the most revenue.

People generally interact with others who are in similar life stages.

Young married couples are usually friends with other young married couples.

Wealthy people with many assets to protect are usually friends with other wealthy people with many assets to protect.

Agency manager works with staff to identify prime customers to ask for referrals.

Once you’ve identified the customers that bring in the most revenue, target them with your referral program. (EverQuote)

3. Ask (different) Questions

“Who do you know that is looking for insurance right now?” or “Do you know anyone who might need some insurance you could refer to me?”

While these questions are direct, they typically prompt a quizzical look and a shrug, “I can’t think of anyone…”

This isn’t to say that asking for a referral this way is wrong.

If you ask for referrals this way, props to you!

92% of happy insurance customers say they would refer their friends/family to their agents, but only 11% of agents ever ask for a referral (Agency Zoom).

So if you’re asking, give yourself a pat on the back!

And if asking directly for a referral in the above way is working for you, keep doing it!

If you’re finding that it isn’t working for you, consider the following:

What if you, instead, asked the newlywed couple that you just onboarded for their auto and renters insurance the question, “What friends do you have that also recently got married and might be in the market for insurance?”

As established above, people are friends with people who are in similar life stages.

Here are some questions that can prompt more thoughtful responses from your customers:

Do you know anyone who recently…

  • Moved here from out of town?

  • Bought a new home?

  • Started a new job?

  • Got married/divorced?

  • Had a new baby?

  • Retired?

  • Has a child that is beginning to drive?

  • Has a child that is going off to college?

  • Bought a new car?

  • Remodeled their home?

  • Started a business?

Even if they don’t result in an immediate referral, your customer won’t immediately say no.

They’ll be more thoughtful, and when they do come across the person in a situation you asked about, they’ll think back to your conversation and are more likely to send them your way!

(Source of some question ideas: Think Advisor)

4. Utilize a Product List

Some of your customers have just one or two policies.

Chances are, they don’t know the extent of the products you offer.

Make a list of the different products you offer with simple explanations and examples of when these policies are necessary or beneficial for someone.

It’s unrealistic that you’ll be able to sit down with every customer and educate them in depth about each type of coverage you offer, but you can provide them with a list of your products so they’re familiar. (Go Nectar)

When someone they know is in the market for a specific product you offer, they’ll be more likely to refer them to you if they see that you provide that product.

This prompts new referrals and makes for a more seamless upsell or cross-sell.

5. Incentivize Your Producers

It can be hard to get into the habit of asking for referrals while selling, so giving your producers a higher commission or another incentive when they onboard a referral can help motivate them.

Insurance saleswoman enters referral information on her computer.

6. Support Client-Owned Businesses

Within your customer base, you’ve got all types of people who work in different industries.

Many of your clients may find employment where you occasionally need service.

When you need a plumber, call up your client who is a plumber. When your friend needs a plumber, refer them!

Talk to your car salesman client when you need to buy a car. Refer your friends who are in the market for a new car.

Artist receives a referral from her insurance agent for a commissioned painting.

You might not be in the market for a commissioned art piece, but your friend might be. Refer them to the client who is an independent artist.

This type of support creates a culture of “I’ll scratch your back, and you scratch mine.”

7. Follow-up/Report Back to the Referrer

By giving you a referral, your client has put a lot of trust in you!

Keep them in the loop and let them know what happened (Think Advisor).

By keeping them in the loop, you can strengthen their trust in you, and they’ll likely give you referrals in the future.

These tips are here for you, not to complicate your efforts but to give you ideas of how to better create a culture of receiving referrals.

If you haven’t asked for a referral in a long time, start asking.

If you are asking, keep asking.

Don’t be afraid to tweak your approach to find what works best for you.

Stay persistent, and don’t give up.

What are some other tips you have for agents seeking referrals? Share your ideas and insights in the comments below; we’d love to hear from you!

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