Updated: Mar 26, 2021
One of the most effective ways to grow your insurance agency is to obtain customer referrals.
Referred customers generate an average of 5 times more revenue in the first year than a non-referred customer, because you start your relationship off with a strong element of trust.
It's no secret though, that asking for referrals can often be uncomfortable for you AND your customers.
Despite how valuable referrals are, many insurance agents shy away from asking for referrals to avoid those awkward moments.
Having a referral program allows you to invite your customers to participate, rather than putting them on the spot to provide you with names which changes the feel of what you’re asking for by making it fun and removing the pressure.
Here are a few things to keep in mind when implementing your referral program:
Make all of your customers aware that you have a program.
What good is any program if you don’t talk about it? The Customer Insurance Review Meeting is the perfect opportunity to explain how it works.
Be mindful of local regulations of your state insurance department.*
The best programs provide incentive to both the referring customer and the referred customer. That way you provide incentive to your existing customers and they also feel like they are genuinely helping their friends and family.
To help you get started, here are a few ideas for you to consider:
Coffee Mug & $5 Starbucks Gift Card
For less than $10 you can show your appreciation by sending a coffee mug and a $5 Starbucks gift card to anyone who provides you with a referral. Consider getting custom mugs produced that have your agency name and logo so that you can keep building the value with your customer one cup of coffee at a time.
Pass-along Business Cards
Make it even easier for your customer to pass your name along to a friend by printing business cards that have 2 blank lines on the back. The first blank line is for your customer to write their name and then pass it to a friend. The second blank line is for their referral to put their name and contact information. Have a reward for both your customer as well as the referral when the card is turned into your office.
Raise the level of reward by holding a drawing for all referrals that are submitted within a given month. Make it a compelling prize, like a TV or tablet – something that is exciting enough for all your customers to want to participate. You’ll have to test a little bit to find a cost/value ratio that makes sense. Have fun with how you pick your winner by filming the drawing and posting it to your agency’s website and social media pages.
Various Gift Cards
This option may vary based on the customer. You may choose to do a $20 or $25 gift card to a lot of different places. You could do movie theaters, restaurants, Amazon, etc. Customize this depending on what your customer wants!
Regardless of what type of referral program you choose for your agency, the important thing will be to have a system in place so that asking for referrals becomes a comfortable part of interacting with your customers.
Effectively implementing and promoting your referral program will create a lead engine of potential customers that will be more profitable and have a higher close rate than any other type of lead in the marketplace.
* Many states do not allow “rebates” to be paid to a policy holder for helping to find you new business. The best way to avoid this conflict of interest is to provide a reward based on your customer referring a name, not based on whether that name purchases insurance from you. Please contact your state insurance department if you are unsure.