Beginning a Referral Program

[smcbride]

I have been looking through the forums here and one thing that I have seen suggested is having a referral program. I personally believe that referrals are the way to go in insurance, but have never worked with a referral program. I could use some tips and advice on starting and running a referral program.

 

[insurance1822]

For existing clients? You may want to look into Rocket Referrals which is a service that helps w/ this. I don't have any concrete, but every person I write gets a "referral form" that asks for the names/numbers of friends & family that we may also be able to help.

I know there are solid "programs" out there that are more structured that revolve around raffles that their entry is a referral...hand written cards etc.

 

[P&CGuru]

I have been looking through the forums here and one thing that I have seen suggested is having a referral program. I personally believe that referrals are the way to go in insurance, but have never worked with a referral program. I could use some tips and advice on starting and running a referral program.

You are absolutely correct. A referral program is the backbone of an agency. The first thing I will say is make sure that your staff is "asking" for referrals. This may seem obvious but it took my a long time to get my team to ask for a referral 100% of the time and then I started rewarding them for each referral quoted.

Here's is what I do:

1.Monthly $100 raffle to customers, each referral gets a drawing into the raffle
2. We send out a $5 starbucks card and a thank you note to the referring party
3. I pay my staff $5 for each referral received and double it to 10 if we get 150 quoted referrals that month
4. Annual drawing of a grand prize to customers that we give away at our customer loyalty picnic.

But the most important thing is to show your team how to "ask". they used to ramble on and one about our wonderful referral program and never got any referrals. It was when i told them not to say anything about the raffle until after they have received a name. So now we simply ask after ever conversation "is there anything else I can do for you" Customer: No "Ok, can I ask you for a favor?.....Who do you know that I can help"

If we dont get the response we like, we repeat " I just need one name of someone I can save some money too, you surely have one person"

A little persist ency will go a long way. GOOD LUCK

 

[insurance1822]

150 referrals per month? that's insane

 

[P&CGuru]

150 referrals per month? that's insane

Insane as in high or low?

I don't allow office to have a day in which we dont get minimum 5, that averages out to 120 so our baseline is 120 and so the extra money gives them that incentive to get 30 more referrals.

I pay out from $600- $2,000 to my staff per month for referrals.

 

[insurance1822]

That's a lot of referrals. I close 90% of my referrals so in my market that would be 108 households a month. Figure a saturation of 1.75 policies per household that's 189 new policies a month. In my market the average policy is $800 so that's $151,000 per month in new business. There is nobody writing that type of business in my market.

Where are you? How many staff? How big is your book? That's an impressive monthly figure.

 

[P&CGuru]

We are a captive so our close ratio even for referrals hovers around 53% but its still much higher than 7% on internet leads

I have a staff of 13, $7.2 Mil in Virginia

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That's a lot of referrals. I close 90% of my referrals so in my market that would be 108 households a month. Figure a saturation of 1.75 policies per household that's 189 new policies a month. In my market the average policy is $800 so that's $151,000 per month in new business. There is nobody writing that type of business in my market.

Where are you? How many staff? How big is your book? That's an impressive monthly figure.

Btw i used to get about 20 referrals a month and spent $7k on leads a month yet I used to agonize my staff to get referrals without putting my money where my mouth was. I pay between $600-$2000 a month to my staff for the referrals but with my calculations my ROI on referrals is at least 9 time better and we get a much more loyal customer base with referrals than with leads. They other reason why I would much rather pay that money to my staff is that the money is staying with my team and the more they earn the less my turnover is. A win win win in my book, although it took my 3 years to develop it and get my team to buy in.

 

[insurance1822]

Did you make a bonus for 2015? I know Allstate has made it almost impossible for agencies your size to hit bonus.

I mean as you know, about 20% of your book takes 80% of the service. I meen you must have reached a saturation point where your staff is asking the same people over & over again. So to generate that many referrals per month of NEW PEOPLE is again...really impressive.

In addition if you're generating that much business & only closing 50% of it...where's the other 50% going? It's time to open an IA in the wife's name

 

[P&CGuru]

Did you make a bonus for 2015? I know Allstate has made it almost impossible for agencies your size to hit bonus.

I mean as you know, about 20% of your book takes 80% of the service. I meen you must have reached a saturation point where your staff is asking the same people over & over again. So to generate that many referrals per month of NEW PEOPLE is again...really impressive.

In addition if you're generating that much business & only closing 50% of it...where's the other 50% going? It's time to open an IA in the wife's name

Dont know if I made bonus or not. I'm anxiously waiting for the year end loss ratio numbers because that is the only way i will either make it or not. I'm half a percentage point away from making it so i've been biting my nails all 4th quarter .

Allstate allows you to have a "passive" investment in an IA as long as its passive so I wouldnt need to marry some random chick for the IA

The funny thing about our referrals is that our customers have gotten so trained for us to ask for referrals that some already have a name locked in before they call lol, we also call our new clients from previous months to get referrals so there are always referrals to be had but we have learnt to be aggressive with asking and our customers are not offended by it.

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Did you make a bonus for 2015? I know Allstate has made it almost impossible for agencies your size to hit bonus.

I mean as you know, about 20% of your book takes 80% of the service. I meen you must have reached a saturation point where your staff is asking the same people over & over again. So to generate that many referrals per month of NEW PEOPLE is again...really impressive.

In addition if you're generating that much business & only closing 50% of it...where's the other 50% going? It's time to open an IA in the wife's name

We also ask for referrals on all of our outbound service calls like premium increase, renewal, claims, cancellation audit. The only calls that we don't ask for a referral on is the birthday calls

 

[Tiesto422]

I prefer to be asked about our referral program from the customer, that way it seems a lot more natural.