Every agency knows that referrals are their best source of business. However, most agencies wait for the phone to ring with those referrals.

Referring your friends to your insurance agent is not something that is at the forefront of most people’s minds. Actually, insurance, like death, is a subject most likely avoided in the company of friends. Both are inevitable, but neither are considered pleasant subjects of conversation.

But if you are as good as most agents feel they are in the eyes of their customers, referrals should be flowing to you as clients do their friends a “favor” by introducing them to you. Unfortunately, most agents aren’t truly “exceptional” in their service standards. The best that they can say is that they are no worse than their competitors.

If you truly analyzed your own agency performance, what can you say makes you DIFFERENT from your competitors? Aren’t they courteous to their clients when contacted? Don’t they WANT to write business? Frankly an agent who didn’t treat his clients well when contacted would certainly not retain many customers as they were exposed to the real underbelly of the agency.

But most agents fulfill the clients’ minimum standards of performance. Those who truly are exceptional are missing out on a great source of revenue by not implementing a Proactive Referral Program.

A Proactive Referral Program does not wait for a client to trigger a referral. The agency sets goals of positive customer contact points during the year and at one positive contact each year (no more than one), the customer is asked to provide the agency one or more referrals for whom the agency could provide a similar class of service as they provide to the original customer.

Now that last sentence simply doesn’t make sense if the agency is aware that they provide nothing special in terms of service to their clients. However, the agency’s that, in fact, set themselves apart as high contact and high service agencies should use the Proactive Referral Program with customers every year. Those agencies know how special they are and they want to offer those same services to an ever-increasing customer base. And if they have high quality customers (don’t ask for referrals from customers that you consider “losers”) the best source of new clients is from those existing clients.

Step One – Baiting the Hook

Once a client has been contacted in a positive contact (don’t ask for referrals if a serious problem exists – until you solve that problem for the customer), the first question you ask in order to achieve a referral is, “Are you happy with the service that we provide you?”

Of course you would like the customer to say “yes” and rave about your service. But, in actuality, you are soliciting a negative answer here. If you ask and they tell you of a problem they have had, you have another opportunity to “shine” by solving their issue and returning your relationship to a positive one.

However, they are most likely to say, “Yes, your service levels are fine!” If that is the answer they provide, move into the next step,

Step Two – Setting the Hook

The client has told you he is happy with you as his agent. Your next statement and question should be, “You know, we often get to insure new customers and they sometimes ask for a reference – someone already insured who could tell them about us as a professional agent. If I promise not to bother you with too many calls, would you agree to act as a reference for me?”

The client will most likely be flattered you asked and accept acting as a reference for you. He will think that he is magnanimous and doing you a favor (at no cost to him). If he says no for any reason – back away and change the subject.

If he agrees – he has said YES twice now – he is ready to be reeled in ….

Step Three – Reeling in a Referral

Once the customer agrees to acting as a reference for you, you’re next statement and question is, “You know, most of our new clients actually come from our existing clients who know how good a grade of service we provide. Could you give me the names of a few of your neighbors/friends/business associates to whom I could use your name as a reference?” Our experience is that 40% of your clients will readily agree to give you referrals in this manner and that number is replicated each year.

A well-known sales technique is to get the prospect to say YES three times. This process of proactively gaining referrals works in personal lines, commercial lines and in financial services. You approach the client during positive contacts and you get him to agree that a) you are a good and professional agent, b) that you can use him as a reference for new customers, and c) he should provide you with names of his friends because, if you’re good enough to use and to for them to be used as a reference for you, it makes sense that their friends should benefit from your services as well as them.

Proactive referrals can virtually stop all cold calling in an agency. Imagine if you could get 40% (or even 20%) of your customers to refer new customers to you each year and those new customers became referrals sources, as well. Agents who feel that asking for referrals is “beneath them” are fooling themselves. Every truly successful salesperson who is proud of his efforts has no problem asking for referrals. Only those producers who don’t believe that they are different from their competitors are reluctant to ask for referrals. They actually fear the response. How do you feel about your agency? Can you ask for referrals?

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