Sixty-five percent of insurance agents list referrals as their primary source of leads, and 60 out of 100 new leads come directly from referrals. That sounds pretty good, right? But consider this: While 91 percent of consumers say they’re willing to give business referrals, a mere 11 percent of salespeople bother to ask for them. Talk about your missed opportunities!
Ninety-two percent of consumers put more stock in the recommendations of friends and family than they do in any other form of advertising. So if you’re not asking for referrals from your existing policyholders, you’re letting untold riches slip right through your fingers.
But increasing referrals isn’t an insurmountable obstacle. Let’s troubleshoot five common problems that insurance agents face when attempting to increase referral business.
Problem 1: Struggling With Policyholder Retention
Did you know that 68 percent of customer attrition can be attributed to “perceived indifference”? Whether you’re dealing with property casualty, health coverage or life insurance, one thing remains constant — your customers want, need and expect your personal attention. If you’re interested in policyholder retention, you’d do well to give it to them.
Thanks to the Internet, staying in touch with policyholders has never been easier. Not only is your website a click away if they need you, but you can also provide a continuous stream of useful, customized content via social media and email campaigns using a multi-touch approach.
Seventy-eight percent of consumers believe that when an organization provides custom content, it’s for the purposes of building quality relationships with clients. And a good relationship is the foundation of policyholder retention.
Problem 2: Wasting Marketing Dollars on the Wrong Audience
If 60 out of 100 leads come directly from referrals, why do so many insurance agents waste money marketing to complete strangers? Does anyone expect referral business from a cold contact?
It costs six or seven times less to retain an existing customer than it does to acquire a new one. Instead of wasting time, money and effort on cold contacts, take advantage of your sphere of influence and focus on your email marketing efforts on existing policyholders.
This not only keeps you top of mind for referrals, but it increases your chances of repeat business. Plus the odds are in your favor since 70 percent of consumers say they always open emails from their favorite businesses.
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Problem 3: Boring the Right Audience With the Wrong Message
Even if you’re focusing your marketing efforts on existing policyholders, that doesn’t guarantee their undivided attention. If every email you send reads like a hard sell or a boring template, you’ll quickly lose favor, even in the eyes of the loyal. As for your emails, if they’re not deleted, they’ll end up living out their remaining days in the dark recesses of your recipients’ spam filters.
Custom content is considered useful by 90 percent of consumers. If you provide content that adds value, entertains or piques the interest of existing policyholders, you’ll become more than just an insurance agent — you’ll become a trusted friend and go-to expert. Your content will be shared more often and your chance of referral will increase exponentially.
Brainstorming Bonus: Coming up with content ideas is easier than you think. If you need property casualty content, consider covering the importance of routine home inspections. If you’re in auto insurance, content on exciting road trip destinations might be just what the doctor ordered! If you need help with this, let OutboundEngine handle the work for you.
Problem 4: Failing to Think Long-Term and Properly Nurture Leads
Every existing policyholder is unique, and each one occupies a different space in the customer lifecycle. That said, they’re all capable of sending referral business your way. While a loyal brand advocate may be okay with the occasional email supplemented by a monthly newsletter, you’ll need to work a little harder to stay top of mind with a relatively new policyholder, especially if you want to establish a foundation of trust on which to build referral business.
Valuable content is a great start, but to build and maintain relationships that promote policyholder retention and increase referrals, you’ll also need consistency over the long-term. Create a content calendar and develop a routine that your policyholders can rely on and look forward to.
Companies that implement an email nurturing strategy report generating 50 percent more sales-ready leads for 33 percent less cost. That’s a slow burn that’s worth waiting for.
Bonus Download: Want to know more about email marketing best practices for lead nurturing? Download our Email Marketing Roadmap!
Problem 5: Failing to Make the Most of Email Marketing
Did you know that email is consistently ranked as the most effective marketing channel for awareness, acquisition, conversion and retention? No matter where a lead happens to be in the sales funnel, email marketing is a viable means of making a meaningful connection.
In terms of acquisition, it’s nearly 40 times better than Facebook and Twitter, two of the top social media channels. So why are so many insurance agents failing to make the most of this amazing marketing tool?
Give email marketing the respect it deserves and make it the centerpiece of your marketing plan. After all, the return on investment is huge—a $44.25 return on every dollar spent. ROI aside, email marketing is the perfect tool for building relationships, increasing referrals and encouraging policyholder retention. Let us automate the process!
If you’re already getting 65 percent of your leads from referral business, just think of the doors you’ll open when you give your full attention to the people who matter most — your existing policyholders. With strong, customized content and a long-term email nurturing strategy in place, you’ll increase your visibility, encourage repeat business and earn more referrals—and that’s money in the bank.