While asking for referrals is a commonly used marketing practice, blasting an email to all your current customers won’t be an effective strategy. Establishing a formal referral program is key to consistently engage clients and generate leads. When building your referral marketing strategy, always keep in mind that your insurance agency is unique and your referral program should be too. If you want your referral program to resonate with your customers, it needs to be designed for them. In this week’s post, we share the 3 tips you can implement in your marketing strategy to boost referrals and grow your agency.
Why Should You Focus on Referral Marketing?
55% of consumers claim that word of mouth is their most trusted source of information when making a purchase decision. Referrals are one of the biggest drivers of revenue growth. However, it can be difficult to create a program that is enticing to your audience.
A lot comes into play before you can convert your customers into advocates and start asking them to refer others. Your clients need to be happy with the services you are providing and, after that, you need to support them even beyond what is expected. This strategy will boost their trust in you and it will help start the referring flow naturally.
Getting referrals is a challenging process, but the effort is worth it. You can make certain assumptions about a referral that you can’t make for other prospect types. Referrals are already interested in you, and in this case, you are not just the result of a Google search. You can make the assumption that they have a problem you can solve.
If your clients are happy with you, they will talk about you naturally, but if you have a referral program in place, the incentive for them to share and refer will be higher. Below, we share the 3 tips to boost referrals and grow your agency.
1. Define Who the Advocates Are Within Your Clients
Leveraging your clients to refer you to their friends, family, or colleagues can be an arduous mission. If you don’t want to waste time, it’s important to define, within your clients, who are ready to become advocates and focus your marketing efforts on them. For example, a client that just came on board won’t be ready to talk about the benefits of working with you. Sending an email to that client would be a waste of resources. Below, we share two tools to help you segment your customers, boost referrals, and grow your agency:
Create Customer Personas
Customer personas result from researching your actual customers. Personas will exemplify your customers and segment them by their key traits. By doing so, you will be able to identify specific goals, problems, or needs and understand your customers at a deeper level to gain the powerful insights to boost referrals and grow your agency. For example, you can divide your clients by the number of employees they have or the industry they are in.
Surveying your clients as soon as possible is one of the best strategies to improve your marketing efforts. The Net Promoter Score (NPS) is the best surveying technique in this case. NPS measures customer experience from 0 to 10 by asking one question: how likely your clients are to recommend your product to their network. By implementing an NPS score, you will be able to identify any problem that your customers might have with your services, track customer sentiment over time, and segment your clients by detractor, passive, or promoter.
2. Use Relevant Incentives for Your Customers
The incentive is the reward you give to the advocates that successfully refer a colleague to your agency. Incentives are a crucial part of referral programs. If your customers are taking the time to refer, you need to reward them. Choosing the right incentive can be difficult since it needs to attract your clients and, at the same time, make sense for your business. For example, if you decide to reward your clients with a Visa Gift Card, don’t offer more money than what it costs you to acquire a new customer.
If you are thinking about offering non-cash incentives, keep in mind that your clients won’t change benefits plans more than once a year. Therefore, don’t offer them an incentive that can only be redeemed during open enrollment. Instead, think about providing extra value on add-ons like HRIS or ACA reporting.
Consider implementing one of the suggestions below to boost referrals and grow your agency:
When you implement a two-way incentive as part of your referral program, both the client referring and the person being referred will get rewarded. For example, if you are offering a Visa Gift Card to your current customers, offer another one to your new customer. This method guarantees higher conversions since both participants are incentivized.
Consider creating an incentive that gets better each time they refer. By doing so, your referral program will imitate the structure of a game or a challenge, getting clients more engaged and involved in the referral process. For example, you can create a referral program with tiers. Your customers can earn $50 for the first 5 referrals and then move up a tier and earn $75 for the next 5.
3. Market Your Referral Program
You can create the best referral program with the most appealing incentives, but your customers need to know about it if you want it to be successful. A referral program needs permanent marketing efforts. An email campaign is the easiest way to spread the word. In the email, you can link to the specific page on your website in which you explain the program.
For example, it would be a good idea to schedule an email campaign that gets triggered after a specific period of time working with a client. Another interesting way to share your referral program is through video. You can create a video to explain the steps your current customers should take to refer and what they could get in return.
Just like any other marketing program, content is crucial. If all of your content is focused on asking for a referral instead of explaining why the partnership is beneficial for both of you, your referral program will fail. It’s important to show them what they are getting in return. The headline is one of the most important pieces of the content since it’s the first thing your customers will read. For example, if your incentive is a Visa Gift Card, you can use the amount in the headline to be compelling and show the benefit clearly.
If you are interested in trying to boost referrals and grow your agency, but you don’t know where to start, Dropbox and Airbnb have great examples you can use for inspiration. There are obvious benefits to implementing a referral program, such as growing your book of business and, consequently, increasing revenue. But there are also other consequences that will benefit your insurance agency in the long term, like creating a positive brand awareness or reducing the cost-per-acquisition. In general, implementing a form of referral marketing for your insurance agency will help you generate qualified leads and continue to move your business forward.