There is a proverb that says: “Man shall not live on bread alone.” With a few adjustments, that lends itself to sales: “Producers shall not live on referrals alone.”
There is a myth that successful producers don’t have to make phone calls or develop pipelines because they are so busy working on opportunities that come their way through referrals. While that would be a convenient way to grow a book of business, few agents can survive on a referral-only strategy. Building a referral network is a necessity for producers to capture more “right-fit” opportunities.
So, how should you go about developing a strategy that generates more introductions with prospects who will value your offerings and build a business relationship with you? Here are four considerations that often get overlooked:
1) Consider the character. Not every client is a good source of referrals. For the relationship to really benefit both parties, a set of shared values must exist. Referrals are a two-way street. If you’re not comfortable with how someone comports themselves, leads client initiatives or engages professionally, you should be reluctant to introduce them to your best clients.
2) Align objectives. The best referral sources come from individuals who have similar business objectives or ones who are working with similar clients. For example, employee benefits producers will find success by developing relationships with employment law attorneys because both parties seek to help employers address similar or complementary issues.
Another example are property-casualty agents who focus on workers compensation. These agents would benefit from developing relationships with physicians and medical practices.
Consider how you can strengthen your bench by developing relationships with other professionals whose businesses dovetail into yours. What are the mutual objectives you share that create a compelling reason for you to provide cross introductions?
3) Share and learn. A referral source is a powerful ally due to their ability to accurately and passionately tell your story and convey what differentiates you from every other insurance agent, which can only happen when they truly understand your value proposition.
The goal of developing strong referral sources isn’t to get more introductions, but rather to get the right introductions. Referral sources must understand what makes you unique, the characteristics of your perfect client and the challenges your business helps them address.
For the partnership to truly blossom, you must be reciprocal in your desire to learn how you can facilitate effective introductions that help referral sources grow their business, as well.
4) Be accountable to each other. Measurability matters. A significant amount of time, energy and resources go into identifying, developing and managing referral sources, which means it’s important to make sure your time is well spent.
Consider managing your referral sources like you manage your best clients. Develop mutual agreements focused on what you both want to achieve from the relationship. Determine how frequently you’ll meet and what your meetings will focus on. Finally, measure both the quantity and quality of the referrals you receive over a given period of time.
If you’re not getting through more doors or developing important contacts as a result of your efforts, it may be time to find another referral partner.
Susan Toussaint, partner and co-founder of Oceanus Partners, provides agents and brokers with strategies that help them more effectively pique the curiosity of business owners and decision-makers and lead them away from the flawed process of bidding and quoting insurance, toward a more effective client engagement strategy.