29 Apr The Power Of Referrals To Generate High-Quality Insurance Leads
Referrals are typically viewed as an essential part of generating new business. Often testimonials, reviews, personal introductions or recommendations are strong-performing methods to connect you with new contacts, while establishing a sense of trust, relatability and connectedness early on in the process. Because of this, referrals are viewed as a cost-effective tool for generating higher quality leads in most cases.
While it is hard to argue that even in a digital world referrals are powerful, many insurance agents underutilize this promotional tactic. Not all insurance agents are naturally comfortable asking for referrals. Agents may avoid asking for referrals because they are concerned about potential client reactions or simply have not taken the time to integrate it into their process. But since referrals are so effective, it’s important for insurance agents to incorporate this powerful marketing tactic. Before you can start leveraging referrals to generate leads, it is essential to understand why referrals can be so impactful for filling a pipeline with high-quality prospects. Once you know more about the benefits of referrals, you can implement a process to integrate obtaining referrals into your overall sales process and strategy.
Why Referrals Are Essential To An Insurance Sales Process & Strategy
Referrals help insurance agents to solve for two challenges: relevancy and trust. Consumers have many options and may find it difficult to find the right insurance agent or insurance provider. Finding the right partner and coverage can be time consuming. Many consumers will agree, when they are in the market for insurance solutions, they want to find an option that aligns with their lifestyle, fits their budget and work with a professional they trust to assist them throughout the process. When an insurance agent connects with a prospect via referral, it is more likely that they will be a good fit. Personal introductions and recommendations allow insurance agents to enter into a conversation with a more established level of trust and understanding than cold leads. For nearly all sales professionals, trust can make or break your conversion rate.
A Referral Program Can Elevate Your Current Marketing Efforts
It’s critical to develop a tailored process for asking for referrals. Some insurance agents are naturally more inclined and comfortable asking friends, relatives and current clients to connect them with others. However, a number of insurance professionals instead prefer to use a more formal referral program. Here are some statistics from Social Media Today, Neilsen and MailShake.com that show how implementing a referral program can positively affect your KPIs.
- 49% of U.S. consumers say friends and family are their top sources of brand awareness. (Neilsen)
- 92% of consumers trust referrals from people they know. (Neilsen)
- Consumers are 4 times more likely to buy a product or use a service when referred by a friend. (Neilsen)
- 81% of U.S. online consumers’ purchase decisions are influenced by their friends’ social media posts. (Neilsen)
- 60% of marketers surveyed noted that referral programs generate a high volume of leads. (Social Media Today)
- 54% of marketers agree that referral programs have a lower cost-per-lead than other channels. (Social Media Today)
- Marketers surveyed rated referrals as the 2nd-highest source of quality leads. (Social Media Today)
- The average lifetime of a referred customer is approximately 16% longer than customers acquired from other channels. (Mailshake.com)
Five Easy Ways To Create A Referrals Process For Insurance Agents
Many top-producing insurance agents will agree that a process is key for success. Similarly, developing a referrals process will establish more effective and efficient ways to regularly ask for referrals, track referral metrics and measure referral success. Here are five simple ways insurance agents can develop and implement a referrals strategy into their sales process:
#1. Devise a basic strategy
Consider whether you want your referral approach to be more direct or more passive. Automated email is an example of passive communication and personalized phone calls and emails are more proactive communication methods. When mapping out your high-level strategy, also determine if you will act on all referrals or if you will prioritize referrals that come from certain segments of your client base. Make sure your strategy includes touchpoints for referral contacts and expressions of recognition and gratitude for your referring clients.
#2. Create templates for referral introductions, reminders, follow-ups and engagement
By drafting templates in advance, you will have a library of content to use across various communication channels, from social media to text messaging. Leveraging templates will help you to deploy messages in a timely fashion. By dedicating time to creating various templates, you will be able to ask for referrals with more ease in the future.
#3. Schedule the milestones that signal when you should ask for a referral
Do not solely rely on generic automated communications. While templates will be helpful, make sure you also set reminders for personal follow-up when asking for referrals. Make sure your sales process includes reminders to ask for a referral. This should connect back to a specific transaction or engagement trigger. For example, maybe after you’ve helped a client through an auto-accident claim successfully or after you closed a policy deal that helped your client save money, these could both be excellent milestones to trigger a referral request. Engaged, one-to-one conversations are likely to reap the best results. These conversations can help you maintain the integrity of your relationship with your client.
#4. Offer alternatives to referrals in your sales process
Prepare to offer options to clients who are not comfortable with giving you a referral. Keep in mind, this is not a poor reflection of your or your business. However, there is still opportunity here. If a client rejects your request for a referral, ask them to leave you a review or testimonial on your social media pages, Google or a similar review platform.
#5. Track your referral metrics to measure results
Even though a referral strategy can be impactful, insurance agents should not rely solely on anecdotal feedback to measure the effectiveness of their referral outreach. Here are a few KPIs you should regularly check, track and measure to evaluate your referral strategy’s performance.
- Click-through rates for emails sent to referrals
- Traffic sessions to URLs sent to referral contacts.
- Referral conversion rate (Number of referrals actually closing a deal)
- Lifetime Value (LTV) of referred customers
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