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9 steps to drive growth with referrals

Written By
Dave O'Brien

My neighbor owns a business and over the weekend we were talking about his insurance broker. He said the broker does a great job, services his account well and stays on top of their needs. I responded, “That’s great, have you referred others his way?”  The answer was telling and an odd reflection of our industry. My neighbor said, “No, he has never asked.”

Are your producers being proactive in terms of referrals? Producers, be honest, are you asking for them? In a survey on the industry, I read 69% of brokers felt they did not have a formalized referral process, and it’s not hard to see why. Asking for referrals isn’t easy. Yet we are an industry built on relationships and pride ourselves on our people and our service. If an agency has 100 clients and can get two referrals from each, think of how quickly that can affect your pipeline and next quarter’s results.

At your next agency meeting, list all of your customers and then ask everyone in the room, “Who on this list has given us a referral?”  It should serve as a wake-up call to explosive potential growth right at your fingertips. It is easier to open doors with a referral and closing ratios are much higher. The following are 9 steps for a roadmap to referral success.

1.    Make sure you have a compelling story

To earn a referral, the customer needs to feel compelled to want to give it. A broker just handling the renewal nowadays is not going to cut it. Clients are looking for brokers to proactively monitor their needs, have monthly communication and keep them abreast of legislative and regulatory compliance. Make sure your agency has a great story and your people are good at telling it.

2.    Track what you do for clients

This has become a lot easier to do with technology and customer relationship management systems. Often a customer has no idea you made 20 calls on their behalf or remember you negotiated their renewal down 6%. Encapsulating your results and service in an annual stewardship report should translate into an easy way to ask for referrals.

3.    Create a list

Work through your customer list and target the people who really love you first. Whether it is performance-based or simply a good relationship, these should be the first ones to target. While you are at it, stop to take a moment to think of who else might refer you as well, such as your banker or accountant.

4.    Train your producers to ask for them

Asking for referrals is not easy. It is an immediate barometer of the relationship, similar to asking someone out on a first date. It takes practice to do it well and an agency should do mocks and practice to get it right. It might feel stupid but could be the single best thing to drive your top line this year. Hard to feel stupid when your results increase by 30% – and if you get pushback from producers, just tell them this will put money in their pocket. There are proper ways to ask and books on the topic, so put together a strategy and practice. And don’t forget to make this a part of training or mentoring for any newer producers you bring on board.

5.    Create a standard message at end of year

How many holiday cards do you get from carriers with a bunch of signatures and a canned note? Half the time I had no idea who the people were who signed them! Why bother? Your clients feel the same way. Instead take the time to do a handwritten note. Thank them for their business and ask them in the season of giving, would they be so kind to give a referral? Yes it’s a lot of writing but it will distinguish you and it’s a great way to practice better handwriting!

6.    Change your email signature

Be unabashedly proud of the service your agency delivers and change your email signature. Underneath your title insert a tagline that says something like, “We are proud of the service we deliver and appreciate any referrals.” Make it your own to fit your agency, but you get the idea.

7.    Make referrals internally fun

You need to get people onboard and create a culture that proactively asks for referrals. Start with a contest. The person with the most referrals gets a gift card or nice dinner out. They do not just have to come from Producers, often times Account Managers can be pretty adept at getting them as well. Pay an override on referral business that closes in the next quarter. Incent the staff and make it fun. On Mondays have everyone tell a success story or a denial. A denial hurts at first but can be a learning experience and sometimes a good laugh once you shake it off.

8.    Send a gift basket

When a prospect awards you with the business, send a gift basket. The card should thank them for their business. It also should outline everything that your agency provides. Oftentimes a P&C producer may neglect to mention the agency does benefits or vice versa. It is a great deep sell tool. In addition, mention that you are a firm that grows with happy clients and always grateful for referrals.

9.    Use LinkedIn

While many see LinkedIn as mainly for people looking for jobs, you would be surprised at how many influential people your own network of relationships contains. Oftentimes you can look up companies you would like to open a door with and see what shared connections you have, to find someone who may be willing to make the introduction.

Once you kick off this referral initiative, track it and celebrate the successes. Be sure to thank the person who referred you as that will encourage more referrals and foster that relationship. And don’t forget to remind staff that only happy clients refer business, so each referral is a direct reflection on the great service your agency provides. The best part is, simply implementing a tested referral program will put you ahead of 69% of brokers and fuel your agency to higher growth. What are you waiting for?



2 responses to “9 steps to drive growth with referrals”

  1. Great advice Dave!

    If I may, I would like to suggest a couple additional steps.

    First, when asking for referrals, show up with a list of the referrals you want. It’s okay to ask for the favor of a referral, but not necessarily okay to ask them to do the job of researching who the referral should be. Identify the relationships your clients has (think of their business neighbors, their best clients, people they buy from, non-profit boards they sit on, industry groups they belong to, and look for their connections on LinkedIn) who fit your Ideal Client Profile and take that list with you when you ask for referrals. Make it easy for them to help you.

    Secondly, set the expectation of referrals when they become a client. Acknowledge, you haven’t earned the privilege yet, but that is your intent to deliver such high results that they would be comfortable giving future referrals. If you establish the standard and expectation at the beginning of the relationship, then it is infinitely easier to come back later with your list and make the ask.

    Again, great post!

  2. I think referrals naturally come from clients who have a good experience during the engagement and upon delivery of the results. The client would make a referral if it is clear that others might benefit from the same service and results you provide. The process of cultivating referrals should begin the first moment you come in contact with the client. Make the entire engagement process positive and memorable.

    • Listen to the client.
    • Explain what actions you will take to address the client’s concerns.
    • Make a commitment, not a promise, to “take care” of the client.
    • Quantify the results in terms of savings and benefits.
    • Enforce the positive sentiments.
    • Make it a happy event.
    • Ask for the referral immediately.

    Thanks for a great post!

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