Referrals are a powerful way to generate new business – and agents know it. According to a 2007 Agent Media* study, 66 percent of agents named referrals as the most effective way for them to prospect for new clients.
But how can you get these referrals? There is one compelling and strategic method — delivering service that can propel your clients into referring you to prospects. When people refer your business to family, friends, and colleagues, they typically do so in order to share the positive experience that they have had with you. In this increasingly impersonal age, your need to exceed client expectations is a critical factor in differentiating yourself from the competition. Stellar service doesn’t happen by accident – in fact, it’s quite the opposite.
Ideally, you should spend at least as much effort, time, and money building a long-term relationship with past customers as attracting new ones. Your referral-based business can then mature into a long-term strategy that can help you build and maintain profitable and meaningful relationships with your clients. It’s important to not only focus on your own client base, but also to take the time to develop your relationship with other advisors, benefiting from their knowledge and skills. In particular, you should always maintain a top-level service platform in an affluent marketplace, as it is an integral part of your business and is essential to maintaining long-term growth within the industry as a whole. Servicing clients often takes a back seat for many reasons, with the two most common reasons being lack of time and personnel.
A strong referral base presents a good yet challenging opportunity. A strong foundation helps shift your focus toward the new business coming in the door and away from the old business on the books. It is crucial to not lose sight of how you arrived here, taking into account both the advisors and clients who have helped you excel.
Now, consider whether your current business model is scalable. Can you handle the influx of new clients while trying to service existing ones? Investing in a proprietary database management system that keeps track of all clients, their needs, and their schedules will help ensure policy retention. Most importantly, hiring the right people can allow you to offer the finest client experience. Taking this approach not only helps create a profitable network, but it also allows companies to take on new business while servicing the old. In the end, this approach can create a profit center at both ends of the spectrum.