Making the most out of referrals

Referrals can be an extremely effective way to grow your insurance business. Research tells us that referrals have a greater power to generate new business than many other types of marketing methods. Yet many agents are reluctant to ask for referrals and to take the time to establish a plan for following up on the referrals they do receive. Consider making it one of your New Year’s Resolutions to do a better job soliciting and contacting referrals.

Start by making referrals a priority. You don’t want to aggressively press your customer base for referrals, but you may want to figure out a way how to work the gathering of referrals into your daily routine. For example, you could add a line to your e-mail signature asking for referrals. Or make it a point to contact one customer a day to initiate an insurance review and ask if they have anyone that may be interested in your services.

As you are soliciting referrals, make sure you gather as much information as possible about your new potential client. Crafting a personalized pitch for each referral can dramatically increase your odds of success. Try to contact the referral at least a few times. People are busy and don’t always answer their messages. If one of your clients has referred somebody to you, it is probably because they legitimately believe that this person can benefit from your services in some way.

Don’t forget to thank the person who has provided you with a referral — whether or not it immediately resulted in new business for you. Some agencies have established referral programs that provide an item of value, such as a $10 gift card, for each referral. That’s one way to thank the person who has provided you with a referral, as long as your referral program adheres to any applicable state laws. But an incentive isn’t the only way to say ‘thank you.’ A letter or phone call thanking your referral source can go a long way toward showing gratitude — and encouraging future referrals.