As an insurance broker, your clients are the bread and butter of your business. Depending on the relationships you have with your clients and the value you provide them, they’ve likely sent you referral business from their personal or professional networks. While unprompted referrals are flattering, brokers can harness the power of their clients’ word of mouth with a streamlined client referral program.
A recent study found that businesses using referral programs report 71% higher conversion rates than companies that don’t. This means an insurance client referral program could optimize your marketing efforts while building stronger client relationships and improving your bottom line.
Building a top-tier referral network takes front-end effort, but your business should see significant returns with the right program.
Let’s break down client referral program basics, the biggest potential benefits, and a checklist for establishing the perfect system.
A client referral program is a coordinated strategy that generates new client leads by incentivizing your existing network to recommend your business to their friends, family, and colleagues. Referrals can come from current clients, associates, professional employment organizations (PEO), consultancy services, and more.
A client referral program helps you capitalize on positive experiences and relationships you have within your professional network to generate more business and warm leads. A referral program can significantly improve your business in a few key areas:
A referral program does more than bring new customers into the fold. It improves your relationship with existing clients, supports your company’s network growth, and incentivizes your brand to continually focus on quality.
Before you can begin reaping the benefits of consistent referral business, you have to build an effective program. Let’s discuss what you need to get your program up and running.
Before you start asking for referrals or brainstorming incentives, make sure your business is referral-ready. Specifically, you should review the quality of a few critical areas of your business:
Simply put, you should tackle your outstanding to-do list before bringing in new business.
After making sure your i’s are dotted, and t’s are crossed, you can begin brainstorming a list of potential referral sources. As previously mentioned, you should look beyond your existing client roster and consider seeking referrals from second and third parties, such as:
While you’re creating your list of potential referrers, you should also consider which will offer the most and highest quality leads. These sources are where you should focus the majority of your marketing efforts.
A standard operating procedure (SOP) is a document your team can follow when working with a referred lead. You likely already have SOPs for sales, customer support, or claims departments, but you should also consider creating one for your referral program.
An SOP will benefit your program, clients and staff by making it easier for your team to ask for and follow up with referrals while streamlining the process for referrers. It should outline your process, rewards structures, branding information and basic boilerplate language employees can pull from during conversations.
Most importantly, the SOP should prioritize making it as simple as possible for both the referrer and the person being referred.
After you’ve nailed down the basics of your program, it’s time to identify rewards for referrers that will incentivize them without breaking the bank or shrinking your profit margins. Some potential rewards for referrers include:
Note: It’s important to consider whether insurance agents can give gifts for referrals in your state. In many states, insurance companies may only provide monetary referral rewards to parties who aren’t licensed to sell insurance products. This isn’t the case everywhere, and each state stipulates the types of rewards insurers can offer to clients and licensed colleagues alike.
Once you’ve completed the planning process, it’s time to roll out your referral program. This will look different for every company, but keep the following elements in mind as you design yours:
Whether you choose an all-hands-on-deck or a more simplified approach to marketing, you’ll need to create a general plan to attract people to participate in your program.
Once your referral program is in full swing, it’s important to evaluate it regularly. When you look for ways to improve your program, prioritize these three areas:
Consider evaluating your program quarterly, annually or biannually. Your schedule will likely depend on your company size, the age of your program, and its success.
Building a quality referral program for your insurance business takes significant effort. However, it has the power to drastically improve your sales, profits, and customer satisfaction. And you don’t have to do it alone.
When you become a BBSI referral partner, you gain access to a team that will help you develop a referral program, as well as co-host, co-brand, and spearhead other valuable sales and marketing initiatives. With BBSI, you can also expand the services you offer your clients to include payroll, HR, business consulting, and more, creating more mutually beneficial relationships and providing more value.
Contact us to learn more.