How to Build a Referral Program

What goes into a good referral program?

For many agencies, their referral program falls into one of two categories:

  • They have a program, but the team can't repeat what it is.
  • They had one, but it's faded away or they never had one.

A referral program is a great way to give your team an easy way to talk about referrals and reward your clients. We will outline steps to creating a great referral program. 

Regulations 🔧

This is probably the least fun, but it's the most important step. You need to contact either your state association or insurance commissioner (we recommend your state association because the commissioners can often look down on referral programs). Your agency wants to be very clear on the rebating regulations in your area. Since each state is different, checking is your first step. 

Defining a Referral 👍

You want to define what a referral is. Here are some common definitions:

  • When someone calls in, we should always figure out the source of the new business. When they state it's from a referral, we should have a method to track this. Check your management system or sales management tool first. If using that isn't an option, a simple spreadsheet can work. 
  • When your team asks for a referral and is given a name, email and phone, mark that down as a referral.
  • Based on your state laws, you can determine the level to which you can define a referral. For example, some states have rules such as:
    • Must not be contingent on a sale, so you must reward based on them providing information.
    • Must or must not be contingent on contacting the person — this tends to be a little more relaxed. 

Reward 💲

Many agencies overcomplicate their referral program. If it takes more than 2 sentences to explain, most clients won't find it memorable. The amount will be based on your state regulations. You want to identify your ideal client and find something of interest to them. For example, if you like growing families, an Amazon gift card may be perfect. If you go after empty nesters, a gas card may be better. Here are a few samples:

Enter to Win

For every referral your client gets an entry to win a quarterly or annual drawing. This allows you (based on state rules) to do a bigger reward and something that gets attention. Here are some ideas:

  • TV
  • New iPad
  • $1000 drawing annually
  • Weekend Getaway

Immediate Gratification

When someone sends a referral, you can reward them instantly with a handwritten note and their reward. Some ideas include:

  • Coffee Gift Card
  • Amazon Gift Card
  • iTunes Gift Card
  • Lottery Tickets

You want something you can get out quickly that can brighten someone's day! Consider Rocket Referrals as they have a whole program on automating the referral process. 

Charitable Contribution

This may sound terrible, but this generally only motivates some clients. We all have non-profits we support, but they are generally very specific to something in our personal lives. It's never a bad thing to support community organizations, however, from time to time they can also get political and controversial. 

Define Your Process ⛑️

It's important that you identify the following:

  • How you will track referrals
  • Who will be in charge of sending out the rewards and/or conducting the drawing 
  • Put the dates in your calendar so you don't drop the ball.

Tell the World 🌎

Now that you have the program, you need to tell the world!

  • You may need to tell your team several times — they need to hear it over and over again to remember. One key is to review the metrics routinely.
  • Add it to your website.
  • Promote it on social media.
  • Send out an email.
  • Add it to your email signatures.
  • Get a flyer to hand out.
  • Put a poster in your lobby.