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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.
How do you pick the right Client to be a 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.
Now let’s talk about how to get referrals
1. Create a first class customer experience
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, and make them want to refer you to their friends.
2. Make it easy for clients to refer others
By creating a referral program with a referral link or form, you can make it easy for your customers to refer their friends and family to your business.
At the end of the day, 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.
3. Use social media
Encouraging your customers to share your insurance products or services on their social media accounts can help to increase brand awareness and potentially lead to new customers.
Don’t fall into the trap of thinking seniors aren’t on social media. There is enough data to show that is not true. You need to be active on Facebook and share content that interests your clients in order to be top of mind.
Present your referring clients with content they can share with their customers or business networks. Sharing free content gives you a reason to contact referrers on a regular basis to keep your name front-of-mind, and it also helps you to build that authority and trust with potential prospects even before they’ve been officially referred.
Guide your referring clients on how to help their friends/audience through the challenges of selecting insurance coverage. Make it about them helping others. You're just facilitating.
Of course, part of them helping others will be sharing the contact info of a trustworthy advisor (you) that she goes to for help with those matters.
4. Partner with complimentary businesses
Consider partnering with businesses that offer products or services that complement your own. You could offer mutual referrals to each other's customers.
There are many professionals you could network with:
- Lawyers
- P&C agents,
- Financial planners,
- Pharmacists,
- Senior Living Community property managers
- and just about any professional who deals with the same demographic as you are.
5. Hand written thank you cards and birthday cards
Everyone can appreciate a personal hand written thank you card these days. Thank your client sincerely and let them know your there for them if they have questions.
If they mentioned anything to you that you can refer to, mention it. ie. Did they mention they were going on vacation? Wish them a good trip. Were they looking at buying a new house? Wish them good luck on their home search. This reinforces the fact that you were really listening to them.
If you feel everything went well, send some business cards and add a PS on the card to let their friends know you can help them if they need it. Try to include at least one magnetic card. They are more likely to go right on the refrigerator, and not get lost.
If you’re sending birthday cards, the same rules apply. Make it personal, and don’t send business cards in a birthday card. The card is to wish them a happy birthday and shouldn’t get into business. It cheapens your effort.
6. Be creative and create an event that engages your prospects
Maybe host a cooking class featuring some healthy and easy to create dishes or snacks, and highlight how important nutrition is for their health.
Of course, you could also discuss how some Medicare Supplement plans could help cover the cost of healthy food, and let that start a conversation around the benefits of certain coverage.
There’s a multitude of options when you really dig in and start thinking about them. Of course, the MCS rules are always evolving. Remember to always follow all relevant compliance regulations, such as those set by the Center for Medicare Compliance, when seeking referrals.
If you have any questions about the referral process give us a call. We’d love to help you grow your business.
Sources:
https://faculty.wharton.upenn.edu/wp-content/uploads/2013/05/Schmitt_Skiera_VandenBulte_2013_Referrral_Programs_2.pdf
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