Keeping the pipeline well stocked with new prospects and new opportunities is a critical prerequisite for sales success in the insurance world. For many producers, it means spending a substantial amount of time on the phone, cold calling prospects who may not even want to talk. This activity can be, at best, a necessary evil they would gladly trade for more time spent with their clients.
For a few exceptional producers, a well-stocked pipeline is a reality. They have been able to achieve a continuous, seemingly effortless flow of new prospects and clients, all while spending less time on cold calls. In fact, when they are on the phone, they are usually talking to qualified prospects who want to take their calls or, at the very least, finding themselves engaged in very intriguing conversations.
What is their secret? They have the ability to get a high percentage of their business from client and prospect referrals.
Making a simple request for referrals is one of the most commonly recommended and frequently neglected strategies for building business. Though a referral conversation is one of the most important conversations an agent can have, most pay little attention to it and miss valuable opportunities.
Often, agents find that their requests for referrals fail to yield good results, even from satisfied clients who are willing to give them a lead. Most do not consider the possibility of asking prospects for referrals, even prospects who turn out not to be good candidates for quality business.
Let’s take a look at why so many requests for referrals produce so few useful results, and how it is possible to have profitable referral conversations with both clients and prospects.
What you’re doing wrong
For starters, when agents do ask for a referral, they often simply ask for a name: “Do you know anyone else who would be interested in speaking with me about their financial plan?” or worse, “Do you know anyone else who is thinking of purchasing a life insurance policy?” If you put yourself in the position of a client or prospect who is being asked for referrals, it’s obvious that this is not really such a simple request. In order to respond properly, the client or prospect must think of another person and their business situation, guess that person’s potential level of interest, and predict whether the individual might buy — especially from this particular agent. No one wants to lose respect from a peer by sending them an insurance producer who will intrude on their valuable time. The potential risk to your client is that you will act in a less-than-professional manner and won’t have a sound business case for being there in the first place.
Insurance agents might not think they have asked for all that analysis, but the truth is, that’s exactly what they are asking a client or prospect to do. If people don’t thoroughly think through all these issues, they may fail at providing a referral, or else the referral will fail to provide results. Consider the typical responses to a referral request, which often sounds something like, “Not off the top of my head, but if I think of anyone, I’ll let you know,” or, “I’m not sure I can give you a name right now, but I’ll keep it in mind.” At some level, clients realize that your request for a referral is poorly defined, unrealistic, and carries a high risk of failure.
How to do it right
So let’s go back to those successful agents and consider a very different, yet exceptional, approach. The secret is in knowing when to ask for the referral and what to ask for. In the case of a client, the “when” is logically right after you’ve delivered your product, service, or solution and your client is experiencing the value they were expecting. At this point, your client should have a clear awareness of the value delivered and will have a correspondingly high sense of satisfaction. For a prospect, the “when” is the point in your diagnosis at which you realize they aren’t experiencing the issues you are able to address and you’ve suggested that they may not require your solution.
The “what” should focus on recognizing symptoms or indicators of issues similar to the ones you have been discussing or which you have helped your customer resolve. The questions you might ask include, “Have you heard others in your company talk about experiencing insurance coverage problems similar to those you are experiencing?” or, “When you speak with your friends or family members, does the issue of appropriately
funding a retirement ever come up, and if so, does it ever seem to be a pressing concern?”
When you ask the question this way, you are not asking the client to take a risk. Rather, you are asking them for a factual observation that does not require them to qualify and pre-sell the referral. You’re simply asking if they know of someone who has the same problems with which they presented you. When they do give you a referral, it’s your job to determine if the symptoms exist and if you can help provide a solution.
By using this approach, you are using processes and skills that are very similar to those of a doctor. In our research, we’ve found that the characteristics of an exceptional agent are similar to those of a good physician. Using this analogy, it is easier to understand why even a prospect might respond favorably if your request for a referral follows a thorough and professional diagnosis, even in those cases where you discovered the prospect didn’t need your product or services. Think about whether you might refer a friend to a doctor who made a great diagnosis and found that you did not need surgery after all, or uncovered an issue that is of great concern and is detrimental to your well-being.
When you take the time to conduct a careful diagnosis of a financial situation, both clients and prospects recognize that they are receiving value from the substance and style of your communication. They are far more likely to share names and will be confident that their peers and colleagues will not be subjected to a hard sales pitch. These names will also have a much greater probability of being the high-quality leads you need to create a rich pipeline and to expand a profitable portfolio of insurance business.
Jeff Thull is president and CEO of Prime Resource Group. He can be reached at 800-876-0378.