Everything you need to know about insurance referral programs

Ask any successful insurance agent the most reliable way to grow and retain your book of business, and the one answer that may stand out is through referrals. That’s because introductions made by clients to people in their network who can benefit from their services earn high trust marks, and those new referrals are typically a good fit for your insurance appetite. A recent Nielsen marketing survey backs this up, reporting that a remarkable 89% of people trust a referral from friends and family more than any other source. This enables producers with strong relationships to connect with warm leads faster and close more policies quickly.¹

Simply leaving referrals up to chance isn’t enough to scale your revenue in a meaningful way. Turning customers into advocates starts with a strategic approach. If you’re ready for more referrals, this article walks you through best practices for supporting your referral marketing strategy to ensure your referral pipeline flows optimally.

What is an insurance referral program?

An insurance referral program is a form of marketing that encourages customers familiar with your agency and services to share their positive experiences with family and friends. While referrals can happen organically—for example, when something related to insurance pops up naturally during a conversation—a strong referral program is supported by various tactics that ultimately make it easy for clients to recommend you.

A strong referral program is a reflection of the superior customer experience you provide and the trust you’ve earned through nurturing client relationships. This means implementing or revamping a successful insurance referral program requires building strong client relationships, delivering on the customer experience, and using marketing and technology to your advantage.

Benefits of insurance referral programs

Earning introductions to new contacts from current clients requires effort, but the payoffs are numerous. In addition to their high trust factor, the marketing advantages of referrals include the following:²

• Referrals have a 30% higher conversion rate than those generated from other marketing channels.
• Referrals that convert are more loyal, having a 37% higher retention rate than other marketing channels.
• Referrals have a lower cost per acquisition than any other form of marketing.
• Referred customers are four times more likely to refer a product or service to others.
• Referrals can increase the effectiveness of marketing efforts by 54%.
• Referrals are more likely to buy when learning about a service or product from friends on social media.

Best practices for supporting an insurance referral program

The goal of any insurance referral program is to capitalize on relationships and make it easy for clients to recommend you. How do you proactively go about it? By taking a multifaceted approach comprised of the following best practices:

• Deliver outstanding customer service. At the base of every successful referral program is a positive client experience. Without it, you can’t build trust, and your referral program will stall. That means that from first contact and throughout the relationship, every client interaction should deliver reliable, responsive and consistent service. To get a customer satisfaction baseline, conduct a brief client survey to learn how satisfied a client is overall, if they have renewal intent and how likely they are to recommend you. Review the results and take action to improve the customer experience as needed.
• Support client-facing touchpoints with technology. Clients want ease and convenience. Offering access to technology tools, such as online portals, chat platforms, online bill pay and claims-tracking tools, delivers the services clients need and want when they want them. Other positive interactions, such as being easy to do business with, influence positive recommendations.
• Optimize with insurance referral tools and software. An effective insurance referral program benefits from using technology tools to track leads and reward customers. To accomplish this, you can use a software spreadsheet, such as Excel or Google Sheets, or license referral-tracking software through a third-party vendor. At a minimum, you want to be able to track the lead source, lead contact information and policy start date.

Another useful tool is an online form clients can easily fill out for referrals. You can embed a link to this form in various places: your client email campaigns, your email signature line, agency newsletters and more. Some tools, including Google applications, allow you to create the form and sync the data. If you’re collecting personal information, be sure the site is secure and consistent with your privacy policies.

• Interact with your clients frequently and consistently. The more quality interactions you have with your clients, the stronger the relationships may be. While there are numerous ways to proactively nurture client relationships, it’s important to be in touch throughout the client life cycle. Using insurance automation for sending communications or calendar reminders to check in periodically or schedule an annual review makes these tasks easier, and they are effective ways to remind clients you are on their team.

It’s important to personalize email messages to your clients’ needs and relationship stages. Nationwide’s Marketing Central library has great ideas to help you connect with clients, but to start, consider saying thanks for meeting with you; thanking them for their business; checking in to see how they are doing; offering tailored risk management tips on an ongoing basis; personally inviting them to an agency-sponsored event; requesting an annual insurance review; asking if they have anyone who could benefit from your services or would like to save money on their insurance—you get the idea.

• Use social media to promote your insurance referral program. Referrals are more likely to buy when learning about a service or product from friends on social media.³ With clients spending so much leisure time online, it’s a must to target posts on your preferred social media channels that promote your referral program to offer an easy way to take action.
• Ask for online reviews. Online reviews are read by 87% of consumers searching for a local business, making them a powerful marketing tactic.⁴ To get more online exposure, invite your clients to leave a review on your agency’s Google listing.
• Show appreciation to participating clients. Showing appreciation to clients for referrals can be as simple as a note of thanks or token gifts, such as a magazine subscription or tickets to a local home builder’s show, or from a reward earned through a formal rewards-based incentive program. People are also motivated by money, so offering rewards-based gifts, such as gift cards, for referrals can effectively motivate clients. If you go this route, it’s important to adhere to your state’s rules and regulations on paying customers “finder’s fees.” Whatever method of thanks you choose, when someone goes out of their way to refer you, it’s important to acknowledge it.
• Reward producers with a referral commission bonus. To keep your referral program top of mind for your sales team, consider offering a referral commission bonus.
• Build referral reciprocity. To widen your potential for referrals beyond current clients, consider giving referrals to other local establishments you respect that complement the insurance products you sell. For example, car dealers, real estate agents, property management companies and travel agents all have clients that may need your services. By aligning with other area businesses and agreeing to refer each other when the opportunities arise, you are in a position to fill your referral pipeline while supporting other professionals in your community.

Grow through referrals

From delivering a memorable client experience to proactively seeking referrals through various marketing tactics, the benefits of a strong client referral program are tough to beat–the cost per acquisition is low, leads from referrals convert faster and have higher retention rates. The best time to get started is today, recognizing that building a strong referral program takes time and keeping at it. Knowing marketing is a key driver to agency success, we offer our appointed agents access to a library of marketing resources to help them reach their growth goals and even offset eligible marketing expenses through our Growth Dollars program. To learn more about how we can support you, check out our agency marketing solutions.