The Original Search Engine
In a world where a simple online search can yield a universe of information about insurance products and services in the blink of an eye, it is perilously easy to overlook the key role an age-old human transaction – the referral – also plays in influencing a consumer’s behavior.
According to a 2014 report by the Hinge Research Institute, 87 percent of buyers turn to friends or colleagues first for recommendations when shopping for financial services, while only about 1 out of every 10 shoppers start their research online. This may be the digital age, but humans still rely heavily on fellow humans for advice on how to spend their money.
As important as referrals are, they do not guarantee sales. Far from it, in fact. The Hinge Research Institute report noted that 81 percent of buyers referred to an insurance agency ultimately judge a business based on an examination of its website. If the website is a dud, your hard-earned referral dies on the vine.
Therein lies the challenge for insurance agencies: how to convert the flesh-and-blood reality of referrals into the digital reality of site visits, and those visits into dollars.
One potential solution is a marketing automation platform. Basically it’s software designed to manage all digital marketing needs under one roof. From improving the website experience, to optimizing online visibility, to driving customers to your website and converting site visits into purchases, the merchants of marketing automation (e.g., Marketo, HubSpot and AgencyBuzz) offer the whole shebang.
Well, almost the whole shebang. One critical thing marketing automation tools can’t do is leverage the conversation about your business that’s happening offline. They can’t do it for the simple reason that it’s a conversation between living, breathing humans, with nary a search algorithm in sight.
Enter referral marketing.
Like the name says, referral marketing is all about generating referrals and leveraging them to foster business growth. It is finding processes that streamline methods of acquiring more premiums through old-fashioned people power.
The first step in a referral marketing strategy is to identify which of your customers are your promoters, the loyalists who will go to bat for your business and sell you to the people they know. The quickest and most effective method for promoter identification is the Net Promoter Score (NPS). Using a simple one-question survey – “How likely are you to recommend our company/product/service to your friends and colleagues?” – NPS filters your fiercest fans from the rest of the pack and hands you a valuable, exploitable resource eager to help your business.
With your promoters identified, you then need to engage them. Send them handwritten notes telling them you appreciate their business and are eager to help their friends and family. Thank them personally for their referrals and find ways to keep your agency in their minds.
Consider being a proactive educational resource for your promoters, sharing information that they can in turn share with others. The more you’re mentioned in your clients’ personal conversations, the greater chance you have of netting prospects when their friends and family are in the market for insurance. Keep track of your results.
But don’t forget about the technological component. Your website must be up to snuff, so that when your referrals check you out online, they like what they see.
A well-executed referral marketing strategy drawing on the ancient power of word of mouth will start the ball rolling, and a savvy online presence will close the deal.