There is a quote made famous by American author William S. Burroughs that says, “When you stop growing, you start dying.” While the idea behind this might apply to many aspects of life, it’s perhaps especially relevant when framed within the context of the insurance industry.
Each advisor is unique. Varying skill sets, approaches in process and attitudes allow each of you to build a practice that fits you. However, there are certain practices that are utilized by almost all top successful advisors, one of the most important of these being the implementation of an effective referral process.
Most advisors would agree that finding new clients is one of the more challenging aspects of this business. Simply finding someone who is prepared to have a discussion can prove difficult. Coupled with DNC (Do Not Call) constraints, privacy restrictions and even just the social stigma surrounding the insurance industry, it is sometimes a wonder how an advisor can grow their business at all. What is so striking is that many advisors work so hard to secure a new client, but then fail to utilize that relationship to allow for new clients to follow with much less effort.
When it comes to referrals, most advisors have concerns. In fact, many feel that asking for referrals makes their client feel uneasy. It can also make an advisor feel like a bit of a salesperson and that utilizing this approach might damage the new relationship with their client. An advisor doesn’t want to do anything that may impact the trusted relationship you are building. All understandable and valid concerns. The idea of pulling out a pen and paper and asking your new client for a few names of people that you can approach for a new sale can indeed feel aggressive. We want to treat the client with dignity and respect, and this type of old school approach is not always ideal – so, what’s an advisor to do?
As mentioned earlier, virtually all successful top advisors have found a referral strategy that works for them. However, just because something works for one person in no way guarantees that it will work for others, so although you can study the strategies that others use, you will still need to find something that fits for you.
Although it doesn’t pay immediate dividends, there is one low-pressure approach that can be quite effective over time. Once you acquire a new client, perhaps after delivering the first policy, plant your first referral seed. Begin by confirming that you and the client had done important work together and that they saw value in your new relationship. Continue by explaining that you’re currently building your practice and actively looking for new clients. Follow up by asking if at any point in the future they come across someone who they feel could take advantage of your skill set, would they do you the honour of an introduction.
You may never walk away from that initial conversation with a long list of names. At this early stage, the client does not know you well enough to determine if you are worthy of an introduction to their friends, family or co-workers quite yet. Sure, you’ve done some effective planning together, but the relationship is still new. Will you continue to provide good service and advice? Will you continue to deliver on your promises? Will they even hear from you again now that your business transaction has been completed? These are all fair questions that your client will need answered before they truly consider you their trusted advisor. The truth is that you must continue to deliver for those clients. It sounds simple, but you have to follow through on your promises and continue to demonstrate your value and dedication.
Time to plant the next seed. At the first review with your new client, typically the 12-month mark, reiterate your desire to grow your business. At that point you may start to see some actual referrals. Continue this approach every year until you are no longer looking to grow your practice. As you continue to prove your professional worth, clients will feel more comfortable referring you and your client list will indeed grow.
There are many approaches to building referrals from your client base, and no one can determine what will work best for you personally. However, whether you use the approach mentioned earlier, or something completely different, you should be doing something.
The PPI Sales team would be happy to help you find ways to build a referral process into your practice. We want to help you find ways to truly work smarter, not harder. So, when considering the referral process, keep this Wayne Gretzky quote in mind, “You miss 100% percent of the shots you don’t take.”