Want More Referrals? Here’s How

Four Steps To Effective Referrals

Referrals. We say we want themwe say we ask for themso why dont we get more of them? There are several reasons:

1. We dont ask. We work hard in opening, analyzing, presenting and closing the case. By the time we write the application, we are so thankful to get the sale, we are afraid to ask for more time and afraid to expend more effort for fear that the case may become “unsold.”

Consciously or unconsciously, we take the path of least resistance and say to ourselves, “Ill ask for referrals later.” There are several problems with this. We are never stronger, or have more rapport with our client, than at the time that we have just closed the sale. Once we put it off, asking gets easier to put off. The effect? Many times, “later” becomes “never.”

2. We treat it almost as an “afterthought.” We say something like, “Would you know anybody who could use my services?” Or, “Would you know someone who would like to buy insurance?” Most people, when asked those questions, are thinking to themselves, “We didnt even think we would, so how would we know if someone else would?” Nothing comes to mind off the top of their head, so they instantly answer, “Nope, sure dont.” And, that’s the end of that referral request.

3) We ask indirectly, or rather weakly, because we have a mental block and think it might be an imposition. Instead of asking for referrals, we say something indirect and passive, like, “If you know people who need my services, be sure to send them to me or give them my name.”

There is a better way! Getting referrals should be approached as another sale. Our clients must be sold on us and sold on the idea that it is in their best interest to help us. “Why would it be in their best interest to help us?” we ask. Well, if we dont secure more new clients and have new business, then we may not be in business to service that client. So, by referring, they are helping to create a successful agent who will be there to service their claim or policy in the future.

So, how do we start getting referrals? Here are a few key points to remember.

1. Have an organized approach. Know what you are going to say about referrals and exactly when you are going to say it. Treat the act of asking for referrals like the act of lowering the landing gear on an airplane. Do it “each and every time,” not “now and then,” or “almost every time.” When it’s built into the presentation, it becomes automatic. The client will flow from the sale of the policy or program right into the referral. The first thing to do is to establish, in the clients mind, the reason for the referral.

Try this: “Mr. and Mrs. Jones, word of mouth is the best form of advertising, isnt it? After all, Mr. and Mrs. Jones, as you know, I was referred to you by the Smith family. What I ask of my clients, Mr. and Mrs. Jones, is an introduction. Now, you may never know who is looking for insurance or investment products and seldom would you ever know if a friend, a neighbor, or a relative is getting inadequate service in those areas.”

We are trying to eliminate two objections before they even come up (i.e., “I dont know anyone who wants insurance,” and “Im sure he/she has an agent”).

2. Make a small request that the client finds easy to go along with. So, rather than asking, “Will you give me referrals?” Ask the following: “Mr. and Mrs. Jones, rather than asking you for the names of people who you think would be interested in life insurance, I would like to ask if you would be willing to sign a testimonial letter for me. Years ago, when I got into this business, a client wrote a letter and sent it to some people for me. I would like to show you a copy of that letter. If you agree with the sentiments behind that letter, I would ask you to sign a similar letter.”

Then we show the client a testimonial letter. Almost all of our clients have signed a testimonial letter or have created one of their own.

3. The close. O.K., now what do we have? We have their agreement that word of mouth is the best form of advertising. We now have them agreeing to sign a testimonial letter for us. Now the close: “Mr. Jones, to whom should we send this letter?” This is where our referrals will come from. Once they sign the letter, the conversation shifts. Instead of asking who will you refer to us, we ask, “Who could we send this testimonial letter to?” Now, if clients have any reluctance, it will be because they dont understand how we will approach the referral. Take the time to explain the process and close the “referral sale.”

Here is one example: “Mr. and Mrs. Jones, you and I both know that you may not know who is looking for insurance or investment products or service. So, rather than asking you that question, studies show that you know over 300 people. Obviously, I dont ask you for 300 names, but what I do ask for are 10 names from you, Mr. Jones, and 10 names from you, Mrs. Jones, to whom I could send a testimonial letter. What I find is after I send the letter, some of those people are happy to know that I am in business and that I am doing business with you, and they will want to see me now and will call me. To those who dont respond, with your permission, I will call them, tell them who I am, and see if they are interested in information about me. If they are, I will set an appointment. If they are not, thats fine. I tell them that someday they might be, and I want them to know I am here and to think of me on that day! So, who could I send your testimonial letter to?”

When we ask that question, we have a form ready to take the names. We find that when we ask for 20 referrals, 10 from Mr. Jones and 10 from Mrs. Jones, we will get, day in and day out, year in and year out, nine referrals per sale.

Keep in mindan endless chain of qualified prospects insures your future!

Timothy J. O’Connor, CLU, ChFC, of Grand Island, Neb., specializes in business continuation and estate planning for closely-held corporations and businesses. He may be contacted via e-mail at toconnor@abswebb.net.


Reproduced from National Underwriter Life & Health/Financial Services Edition, September 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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