Here’s an easy decision. Would you rather generate new long term care insurance business by: A) buying lists and cold-calling strangers who may or may not be qualified for your product and services, or B) meeting with qualified prospects to whom you were referred by someone whose opinion they value?
OK, it’s a silly question. Every advisor prefers landing new clients from referrals, of course, and for many successful advisors, referrals are their only source of new business. But how do you get to the point where you can rely on receiving more than an occasional LTCI referral? We asked several advisors about their experiences and insights for building the referral pipeline.
Cashing in on credibility
Katy Cushman, CLTC is the owner of Cushman Insurance Solutions in Newton, Mass. and Fayetteville, Ark. She estimates that 90 percent of her new LTCI clients come from referrals: 20 percent from existing clients and 70 percent from other professionals.
Cushman’s situation is unique. She built (and still runs) a successful LTCI business in Massachusetts, where she had excellent name recognition and a strong referral network among financial and legal advisors. Her family situation required a move to Arkansas, however, and she found herself starting over from scratch at her new location. “I moved to Fayetteville, Arkansas where nobody knows me and I’m nothing special,” she says. “And so I had to start all over again, just like someone who’s just beginning. It has been entirely a different experience–much harder.”
She began to build a new network of contacts by joining the local Rotary club and Chamber of Commerce. She’s also written newspaper articles on LTCI to build name recognition. Additionally, she’s actively contacting attorneys, accountants and other potential referral sources to introduce herself, but she’s found that many of those professionals don’t welcome the contacts. “So many insurance agents are pounding away at lawyers and CPAs and financial planners,” she says. “A number of people have met with so many insurance agents they just don’t have any desire to do it again. They’ll say, ‘No thank you, I’m not interested,’ which has never happened to me before in my career.”
Cushman continues her efforts to meet with prospective referral sources, but she’s also offering educational seminars to gain exposure and develop contacts. Her seminars aren’t the usual thinly disguised sales pitch–she’s created more technical programs for CPA societies and audiences at senior centers and assisted living facilities. Those presentations aren’t aimed directly at the seniors; instead, she’s focusing on their children who would influence the buying decision or possibly buy the coverage. Her goal is to develop a reputation as a local LTCI expert, and she says that she’s starting to see more referrals from the Fayetteville market. “You need to put yourself out there as an expert, but if nobody knows you, you have to show them that you are an expert,” she says.
Leveraging name recognition
Everyone prefers to deal with recognized experts. That means if you can build a reputation as an expert, you’re likely to get more referrals from clients and other professionals. Bill Upson, CLU, ChFC and president of Strategic Asset Management Group in Walnut Creek, Calif., has been selling LTCI for about 20 years. He estimates that his referrals are split evenly between clients and professionals. Upson demonstrated his LTCI expertise with the 2000 publication of his book, “Long Term Care Alternatives & Solutions.” The book has sold well–it’s available on Amazon.com and through the Million Dollar Round Table, of which Upson is a long-term member. Upson also sends requested copies to friends of his clients, and he believes the book helps drive many of the referrals he receives.