Did you know that 96% of people don’t trust ads?
Although paid ads can garner you a certain amount of leads, it isn’t the only way to grow your client base.
If you’re an insurance agent looking to grow your sales, referral marketing can be a highly effective strategy. Because it capitalizes on word-of-mouth referrals from clients, referral marketing brings high-quality leads who are pre-disposed to buy from you. According to reports, 83% of people say word of mouth influences their purchases.
Although there are many benefits to referral marketing— many insurance agents overlook it.
Are you missing out on the power of referral marketing?
Don’t let more amazing leads pass you by. Instead, read on to find out everything you need to know to implement an effective referral marketing strategy.
What Is Referral Marketing?
If you are becoming an insurance agent, you might not yet know what referral marketing is.
In a nutshell, referral marketing is the practice of gaining leads through referrals.
For instance, if a client refers a friend to you, this lead will be a referral. Even if you’ve never implemented referral marketing, you can still gain referral leads.
However, you can also focus on increasing the number of referral leads you attract by carrying out specific referral marketing strategies.
The Benefits of Referral Marketing
Before we get into how to do referral marketing, let’s run through its benefits. Referral marketing has some unique and powerful advantages. Firstly, it is a source of very high-quality leads who come with pre-established trust in you and your services.
Leads who come to you via referral marketing strategies are also more loyal and quicker to convert.
First and foremost, referral leads are some of the best there are. They often come to you ready to buy. They’re also more likely to buy from you than someone else.
According to research, a word-of-mouth referral is a motivating factor behind 20-50% of all purchase decisions.
One reason why referred leads are more likely to convert is that they come with pre-established trust. Building trust is a huge part of lead nurturing.
Survey results from Nielsen show that 84% of respondents view recommendations from family and friends as the most trustworthy source.
This means that leads referred to you will likely trust your services more than any that are advertised to them.
Another benefit of referral marketing is that it’s (for the most part) free. Although there are ways you can invest in referral marketing strategies, a large portion of your referrals will often come at no cost to you.
Referral Customers Are More Loyal
Lastly, referral customers are also some of the most loyal. Because they have come to you on a recommendation from someone they know, they have a level of inherent loyalty.
For instance, if Mitchel refers his good friend Rob to you, Rob will probably feel more loyalty towards you as an agent than if he found you via a paid ad.
Top Referral Marketing Strategies to Try
Whether you’re building your client base back up after a slow year or starting from scratch, referral marketing can be your ticket to increasing sales.
But how do you start encouraging referrals?
Below we share with you some of the top referral marketing ideas and strategies to implement.
Even if you have a handful of clients, you can leverage these techniques to draw in loyal and high-converting leads.
Ask Your Clients for Referrals
One of the first and simplest referral marketing strategies to try is simply asking your clients to recommend you.
A lot of agents hesitate to ask outright for referrals. However, you might be surprised at how many of your existing clients would be more than happy to recommend you to family or friends.
If you have served their needs well, many people are pleased to refer people to you. However, you need to ask.
Asking your clients to refer you keeps you at the top of their minds when they are talking to others about insurance. If someone they know needs insurance, they’ll be far more likely to recommend you if you have planted the seed in their mind.
What’s more, don’t think you can only ask clients who have bought an insurance product from you. Even if a client decided against one of your products, this doesn’t mean you didn’t provide them with value and help them along their journey.
You may even find that clients who didn’t buy are even keener to refer you to make up for not making a purchase.
Reach Out to Policy Beneficiaries
Another way you can generate referral leads is by reaching out to policy beneficiaries.
This is a highly overlooked referral marketing strategy but one that can bring good results.
Whenever you write up a new policy, make it a habit to contact the beneficiaries. As the insurance agent, you will have all of their contact details.
It’s not mandatory for insurance agents to do this. However, it is a great way to add extra value, and it opens the door for more referral business.
You can begin the call by notifying the beneficiaries of their appearance in the policy. You can also inform them of the steps they will need to take when and if they have to file a death claim.
After this, you can also let them know that if they have any insurance needs or questions, you are always happy to help. Additionally, you should also mention that the same offer stands should they have any friends or family that need help with purchasing insurance.
By letting the beneficiaries know about their appearance in the policy and the steps for making a claim, you’ll be opening an interaction by providing free value. This then yields the perfect opening for offering your services and laying the ground for extra referrals.
Offer Rewards for Referrals
Besides asking existing clients and reaching out to beneficiaries, you can also offer rewards for successful referrals. Incentivizing referrals in this way is a popular and effective referral marketing strategy.
According to survey results, 88% of Americans would like to receive some incentive for referring friends and family.
There are various ways you can incentivize referrals. For instance, you could offer a gift card reward for every referral that makes a purchase. You could also offer loyalty points, special discounts, etc.
Cash incentives are, however, one of the most effective. The above study also revealed that 77% of people prefer cash rewards above all others.
You can choose to manually manage referral incentive programs or set up an automated program that tracks referrals.
Try Out Influencer Marketing
Have you ever thought of trying out influencer marketing as an insurance agent? Influencer marketing is something that can tie in very well to referral marketing strategies.
If you are unfamiliar with influencer marketing, it is the practice of leveraging the trust that influencers have with their audiences to promote your offerings. Influencer marketing is popular in the lifestyle, beauty, and fashion industries. However, it can be successfully applied to almost all sectors.
For instance, you could approach a Youtuber, blogger, or Instagram influencer and ask them to promote your services in their content. If they accept the terms of your offer, they will then recommend you to their audience.
Let’s say you sell home insurance, and you approach a Youtuber who creates videos around real estate topics. Providing your offerings align with their content, they can then incorporate a plug for your services into one or more of their videos.
If they have a loyal audience, this can translate into referral-type leads for your insurance business.
The key to success is to research the influencers you choose and pick ones with engaged audiences. You should also keep things topical and make sure that their content and area of authority line up with the types of insurance you sell.
Implement These Referral Marketing Strategies for More Leads and Conversions
As you can see, referral marketing is a valuable source of high-quality leads. To ramp up your referral numbers, make a point of asking your clients for referrals and reaching out to beneficiaries. You can also create an incentive program and tap into influencer marketing.
Are you looking for more ways to grow your insurance business, generate more leads, and close more sales? Are you feeling stuck or in need of support?
Here at IS101, our job is to give agents like you the tools, information, support, and strategies needed to help you attract your ideal clients and create the insurance career of your dreams.
Besides teaching you advanced sales and prospecting techniques, case design, and underwriting, we also provide you with free resources and tools, as well as one-on-one coaching and support.
To get started, check out our training programs today.