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The Importance of Client Referrals and How to Get Them
According to the Wharton School of Business, a referred customer costs a lot less to acquire and has higher potential for retention and loyalty. In fact, a referred customer has a 16% higher lifetime value than a non-referred customer. What's more, these customers are free to acquire for your business -- a win-win.
According to Nielsen, 92% of consumers trust referrals from people they know.
Not only that, but 82% of Americans say they actively seek recommendations from friends and family when considering a purchase. People prefer getting referrals from people they know, rather than hearing from someone selling a product. By asking for referrals you are giving people that opportunity.
So, how do you pick the right referral source?
Maybe it’s a client that is very appreciative of the work you do, or maybe a local business with customers in common that could bring referrals your way.
Whomever it may be, make sure to give them some content to pass along or send an email detailing how you want your business to be referred.
Don’t leave anything to chance. Whenever you have someone referring you, make sure they know how to refer you.
You may be tempted to offer an incentive to your clients for referrals. This may or may not be acceptable, depending on regulations from your state’s insurance department.
Make sure you check with carriers and your state insurance department for direction before offering any incentives.
Your referral process should be methodically planned out so that you can repeat it easily each time. There are software applications that can really streamline this process.
Or just write it down somewhere, if that works for you. Just make sure you take the time to do this right.
A steady stream of referrals is business gold, and will pay off big time. So, don’t forget to ask for referrals, and be consistent about it. It’s better to put the time into developing a good referral process than it is to spend all your time finding all new customers on your own.
If you have any questions about the referral process give us a call. We’d love to help you grow your business.
So, let’s talk about how to get referrals.
For starters, before you can get referrals you have to first be referable. And in order to be referable you have to create a first-class customer experience. You have to really be sincere in offering to help your clients.
A happy client is almost always willing to recommend your services to a friend, but they will likely need to be prompted, so don't forget to ask them.
It’s surprising how many agents we speak to that say they don’t consistently ask for referrals. That’s money left on the table every time. You should be asking for referrals after every sale.
Sources:
https://faculty.wharton.upenn.edu/wp-content/uploads/2013/05/Schmitt_Skiera_VandenBulte_2013_Referrral_Programs_2.pdf
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