Who you know is as important today as what you know -- and who your business contacts and clients know is even more important than that, especially in the insurance industry. Today, referrals are the best way to do business, mainly because all our devices and screens are overrun with ads and marketing pieces most of us don’t have time to read or investigate.
The great thing about referrals from your business contacts, current and past clients, or just friends or family are that they come with the support of people we already trust for business relationships and personal relationships. That makes referrals by nature more trustworthy than any other client that we might come into contact with on social media or through a networking event. Don’t get us wrong -- social media advertising, marketing, and connections are valuable, as well, but referrals are the golden geese of client opportunities and business growth. Let’s take a look at what referral networks are, how they work, how to build them for your insurance business, and how to maintain them.
What is a Referral Network?
A referral network is made up of people and businesses your business has worked with, met, or who are like-minded, and who all generate business for each other through word-of-mouth and referrals over time. These networks can be online, local, or even global, but a referral network is not made up of competing businesses. Instead, a successful referral network is made up of businesses and individuals who are in related industries, and who need help from those other related industries in order to run their own businesses. Does that sound confusing? It can be, but it becomes much clearer when you look at how your business functions.
What are Related Industries for Insurance Business Referral Networks?
Related industries for insurance businesses might include the following:
- Automotive dealers and dealerships
- Real estate brokers and agents
- Homeowners organizations
- Outdoor recreation organizations and locations
Depending on the types of insurance your business provides, there are numerous referral network opportunities for you in your area. Take a look at business organization or industry meetings in the nearest metro area, and you may find new clients at each networking event you attend. Get their business cards and connect with them online (especially on social media networks like LinkedIn) and referrals may start flowing into your inbox.
How Do I Build My Referral Network?
Research shows that referral business may represent 60% of a company’s business, including 50% from inbound referrals and another 12.5% from outbound referrals. Keep in mind that referral network participants may charge a referral fee of about 25%, but most will be happy to refer your business to another company or individual if you did an excellent job for them in the past. Building your referral network requires your participation, but it’s not too hard to increase it with social media tools and these steps:
- Create a list of potential referral network connections.
- Prioritize and research the top five or ten.
- Schedule meetings with each one.
- In the meetings, ask how you can help and send them referrals.
- Provide training and content for them so they can properly promote you.
- Create your referral network and watch your business take off.
- Repeat as necessary.
If direct referral gaining tactics like this are difficult for you, or you don’t have time for them, try this approach:
- Identify three to five friends or family members who know a lot of people who may need insurance services, or better insurance services.
- Ask current or past clients for testimonials.
- Take advantage of chance encounters with anyone to let them know what your business is doing.
- Maximize professional, business, and service contacts, letting them know about your services.
- Get involved with related industry associations, groups, or organizations by joining or attending networking events.
These should get you started! Creating a solid referral network can not only help your business gain new, trusted, and dependable clientele quickly, it can also help you when you need services from a different or related industry. Always keep an eye out for business opportunities, but be sincere and supportive to related industries for your insurance business. You won’t believe how many new opportunities come your way.
Let's chat and put the Hult Team’s experience to work for you. Feel free to reach me at 309-673-8191 or firstname.lastname@example.org, and together, we can grow your insurance Brand.