Referrals are an invaluable source of new sales for any insurance agency. A recommendation from a trusted friend, colleague or family member carries much more weight than the best advertisement or promotion money can buy.
The key to making your referral program successful is ensuring it is understandable and well-known.
First decide on how qualified the referral lead must be. If you plan on offering a small incentive (less than $10 for example), then rewarding someone from a lead may be an acceptable expense. If your referral incentive is on the more extravagant side, you may want to only pay out for conversions.
- Lead. Provide an incentive for someone to simply provide you with name/contact info for someone they think may benefit from speaking to someone at your insurance agency.
- Quote. This is where you provide an incentive only if the referral lead gives you an opportunity to quote their insurance.
- Conversion. This is where you provide an incentive only if the referral lead purchases an insurance policy from you.
Second, choose what your incentive is. You can offer something as simple as a $5 gift card to a well-known national (or even local) business. Coffee gift cards are very common, as almost everyone lives near a Starbucks.
Make sure your incentive is desirable. A free keychain is not very inspiring. A gift card to a retail store or restaurant is something everyone can appreciate and use. Don't want to limit your reward to just one place? Try just giving out $5 or $10 in cash!
Consider partnering with a local business that you also insure. Look through your commercial book of business for some possible partnerships. Not only does it help your insured on this one transaction, but it increases the chance of the business gaining a loyal customer of their own, and promotes their business throughout the life of the referral program (even to those who don't end up winning).
Here are some generic ideas to help get the creative juices flowing:
- Hold a drawing in the spring for 10% off lawn mowing for the summer from a landscaping company that you insure.
- Hold a drawing in the winter for 50% off a one-time snow removal from a business you insure.
- Hold a drawing in the spring for a free pet grooming for a veterinarian or pet clinic that you insure.
- Offer a free dessert coupons at a restaurant that you insure (desserts are often in the $5 -$10 range, and most customer will also buy dinner there too, making this a great deal for the owner!)
You can also change up the frequency of the incentive pay-out. To keep customers more engaged throughout the year, try a prize-drawing program. Each referral earns a chance at a "grand prize." At the end of the month/quarter/year, hold a drawing for a given prize. In this style, you can offer an even larger prize since you'll have so many referrals in your pocket to offset the cost of the prize.
Whatever you call it, be sure to avoid the term "Lottery", which is defined as a prize drawing where people must pay money to buy a chance to win. Lotteries are highly regulated and should not be run without consulting legal counsel.
Promoting Your Referral Program
Whatever your referral program looks like, it's important to promote it like crazy.
- Put a link in your email signature.
- Tell all your new customers right from the start of your relationship with them. Even give them a stack of business cards to hand out to friends and family.
- Put a feature on various pages of your insurance agency website.
- Promote it on Facebook (even promote the winners - just be careful of the winner's privacy and don't upload a photo or full name without their permission).
Each state has different regulations on referral incentives. Check with your state's Department of Insurance to ensure that your referral program is in compliance with your state(s) regulations.
Here's some more guidelines on socialmediaexaminer.com to consider when developing your insurance agency's referral program.
Do you have an insurance agency website with Banyan Theory? If you do, and your referral program isn't featured on your website, let us know! We have referral promotion features built into all of our designs and packages, and this is an enhancement we can complete for you at no additional cost!
While you're here and have referrals on the brain, check out our own generous program for insurance agency website referrals.