A Guide to Earning Referrals and Building a Thriving...

A Guide to Earning Referrals and Building a Thriving Business

AGENT USE ONLY LS057_H1412

Table of Contents Cold Calls Versus Referrals .................................................................................................................. 1 A lot More Than a Name and a Number ............................................................................................... 2 So What Does it Take to Earn Great Referrals? .................................................................................... 4 Delighting Your Customers .................................................................................................................. 5 Be Trustworthy in Every Dealing ......................................................................................................... 6 Know Your Clients’ Expectations — Then Go Far Beyond ................................................................. 7 Help Your Clients Realize You’re Referable ........................................................................................ 8 The “Six-Step” Referral Process ........................................................................................................... 9 The Best Time to Ask for Referrals .................................................................................................... 10 Gathering Referrals During the Application Process .......................................................................... 11 Using Product-Related Questions to Obtain Referrals ........................................................................ 12 Referrals Really are More Than Just a Name ...................................................................................... 13 Asking Questions to Qualify a Referral .............................................................................................. 14 Observation Prospecting ..................................................................................................................... 15 Centers of Influence ............................................................................................................................ 16 The House Next Door ......................................................................................................................... 17 Before You Make the First Approach ................................................................................................. 19 A Simple Way to Simplify Referrals .................................................................................................. 20 Close the Loop .................................................................................................................................... 21 Referral Objections ............................................................................................................................. 22 What to Do if You’re Not Getting Referrals ....................................................................................... 24 Setting Up Your Referral File ............................................................................................................. 25 Summary............................................................................................................................................. 26


© 2012 Legacy Safeguard, LLC. All Rights Reserved. FOR AGENT USE ONLY. Page 1

Cold Calls Versus Referrals It’s Wednesday night, 7 p.m. You just sat down for dinner, and the phone rings. It’s another darn telemarketer! What’s your answer? “Absolutely, let’s talk for a while.” I doubt it. Now imagine this scenario. The person on the phone says she’s calling because your best friend thought you might be interested in a service she provides to him. Are you more likely to stay on the phone and actually have a conversation? You bet. It’s a fact. Warm referrals win out over cold calls every time. An effective referral process is the most efficient, effective, profitable and enjoyable way to sell. So what’s a referral? Dictionary.com defines it as “a person recommended to someone or for something.” How do you position yourself to be the insurance agent that consistently gets referred to prospects? This guide will teach you.

Here’s just one reason why it’s so important to learn. Chris Fiacco of Northwestern Mutual Life Insurance Company conducted a study of referrals in the life insurance business. The study tracked the effectiveness of contacts to 5,640 qualified leads. Cold calls turned 2,240 of those qualified leads into prospects, and 11 percent (56) of those leads were actually converted to sales. Now let’s look at referrals. Warm referrals turned 3,400 of the qualified leads into prospects and then into 452 sales—a close rate of 40 percent. There were 508 total sales—89 percent from referrals and only 11 percent from cold calls. Which approach are you ready to use to build your business? What’s the key to obtaining referrals that result in sales? Offering unparalleled service to your policyholders that creates a relationship of trust and respect. After reading and working through this guide, you’ll understand how to build trust and respect and how to leverage those relationships to serve new and existing clients more effectively.

OUT OF 508 CLOSED SALES, 89 PERCENT WERE FROM REFERRALS, AND JUST 11 PERCENT WERE FROM COLD CALLS.

Closed Without Referral

Closed With Referral



A lot More Than a Name and a Number Studies by the Life Insurance Marketing Research Association demonstrate the power of using high-quality referrals instead of cold calls. And remember that a referral is more than just a name and a phone number—it’s a person you’ve learned a lot about. This diagram shows how important it is to gather as much information as possible when a client makes a referral. The more you know, the greater your chances of converting a prospect to a buyer.

50 percent PROBABLE BUYER Recent change in

personal or job status Ability to act without

delay 35 percent QUALIFIED PROSPECT Specific insurance need

you’re able to satisfy Strong relationship with

referrer that positions you for a favorable approach

20 percent PROSPECT Potential need for

your products Capacity to pay Meets underwriting

requirements

10 percent LEAD Name, address and

phone number Family status Place of

employment

Do you want to cold call people and battle the tough odds of actually meeting and fulfilling their insurance needs or do you want to reach out to a warm referral—someone you know quite a bit about and with whom you share a mutual connection? The choice is yours.

THE MORE YOU KNOW, THE GREATER YOUR CHANCES . . .



So What Does it Take to Earn Great Referrals? “Your customers are only satisfied because their expectations are so low, and because no one else is doing better. Just having satisfied customers isn’t good enough anymore. If you really want a booming business, you have to create Raving Fans.” This hard-hitting advice comes from “Raving Fans” by Ken Blanchard and Sheldon Bowles, authors of high-powered books on business leadership and customer service. As an insurance agent, how do you go about creating customers who believe you have exceeded their expectations? First, think about the services your clients expect. They have paid, or are paying, premiums on a life insurance policy. In return, they expect you to handle every aspect of their coverage with caring and expertise.

Getting the policy delivered

Changing a beneficiary

Handling a claim

Making a premium mode change

Correcting a billing error

Obtaining a duplicate for a lost policy

Solving any problem they perceive with the issuing company This is what your customers expect for the premiums they pay. Handling all of these elements perfectly is important, but is it the kind of great service that will encourage your customers to recommend you to others? Have you really earned the right to reach out to their friends and family? Probably not. What if you could turn your clients into “Raving Fans”? Fans that are more than just satisfied with your services—they’re delighted with you and what you do. What’s the secret to creating delighted customers? Let’s look more closely at needs analyses and annual reviews—two value-added offerings that show your willingness and ability to go beyond the basics to deliver personalized service.



Delighting Your Customers There are a number of ways that needs analysis presentations and annual reviews can create customers who are truly enthusiastic about your services. An annual review—done well and thoroughly—lets your customers know that keeping their coverage right is your top priority. Help them understand what they have and don’t have, and reassure them that if changes are needed, you’ll make sure they happen. Because not every company requires agents to conduct yearly visits with customers, annual reviews can be a real advantage in building and strengthening your client relationships. Here are some other great ways you can deliver more than your customers expect and make them more eager to refer you to family and friends:

When you submit an application, explain that because of the volume of coverage we write, it may take six to eight weeks for the policy to be issued. But be sure to stress that you’ll do everything you can to speed up the process. When the policy is issued in two to four weeks, bring it to the customer immediately. Under promising and over delivering is a classic way to make a long-lasting positive impression.

During underwriting, keep in touch with the customer, even if you don’t have any concrete information to share. Let them know you care and that you’re keeping tabs on the process. Always let your clients know that they and their needs are important to you.

Be interested in your customers beyond the cycle of buying, selling and servicing. Ask genuine questions; see what interests and activities you have in common. Chat about hobbies, where they worship or what kind of vacations they enjoy. Do a favor that’s not related to insurance. If you’re sincere in building a friendly relationship, you’ll go beyond your customers’ expectations of the typical insurance agent.

If a customer has a problem, don’t simply pass it up the chain of command and hope it gets fixed. Follow up with the home office to make sure the problem is being resolved and communicate with your customer. You can even help clients and prospects get answers to questions about another company’s policy. Show them you really care and that you’re staying involved. Deliver the kind of service they seldom receive anymore.

Learn everything you can about insurance. When your expert knowledge and skill help clients understand issues and solve problems, you stand out as valuable resource in a complex world. Complete all of the training programs. Practice your needs analysis presentations and annual reviews until you feel comfortable and competent. Developing unquestionable expertise in insurance is the first step in receiving the high-quality referrals that will build your business.



Be Trustworthy in Every Dealing To strengthen your standing in the community, build solid long-term relationships with clients and gain the confidence of prospects. Be someone people can trust. Let people know who you are and what you stand for. When it comes to how you conduct yourself and your business, your main focus should be doing what’s right. Your clients and prospects want to know that you respect and value them and that you’re a sales professional they can trust. You earn trust through your words and actions. Here are three principals to guide your way: 1. How others perceive you is more important than how you perceive yourself. 2. How you treat others is more important than how others treat you. 3. What you do is more important than what you say. Here are four simple actions you can take every day to build and maintain trust, and they work just as well in your personal dealings as they do with clients and business associates. Consider using the following strategy to gain trust:

Treat everyone with respect, regardless of background, position or financial status. Every person you come in contact with deserves your utmost respect—even if they don’t buy from you today. Treat people with respect because it’s the right thing to do. Remember, every person you meet could be someone who will buy from you in the future and provide valuable referrals.

Be authentic, not phony. The statements, “What you see is what you get,” and “You’ve got to walk your talk,” signal our hunger for authenticity in the people we meet and work with. People are looking for the real you. Your greatest impact will come from being truly yourself in every interaction. Make sure your actions match up to your words. Be real—not just the person you think a prospect hopes you’ll be.

Be on time. Failing to arrive on time for appointments shows a major lack of respect that’s hard to overcome, regardless of the excuse. Your clients and prospects begin to think of you as someone who can’t be trusted. If they can’t count on you to be on time, how can they trust you with some of the most important decisions they’ll make for their family and future? Promptness is a sign of trustworthiness, so get where you need to be on time.

Make your word your bond. From following up on questions to providing additional materials or making phone calls, do what you say you’ll do. Keeping your word is the very definition of trustworthiness. As an insurance professional, make this your guiding principle. When your word is reliable, you’re reliable.



Know Your Clients Expectations, Then Go Far Beyond

How do you know what kinds and levels of service it will take to exceed your customer’s expectations? Ask them. Every time you meet with a client or prospect, ask them what they expect from you as their insurance agent. You’ll begin to learn what you need to do to turn satisfaction into delight. Start with questions like these:

How do the companies you do business with serve you in ways you really like?

Why did you choose to do business with me?

Why do you continue to do business with me?

What are you pet peeves about the service you receive from other companies?

What do you like the best about my service? What could I do better?

What’s the one thing I could do that would set me apart from other agents you’ve worked with?

It’s a simple, powerful process. You sit down with a client, you ask questions like these, and you listen, and not just run-of-the-mill listening—active, focused listening. Focused listening—great for business and at home—requires more than just hearing the words someone says. It involves working hard to actually understand the meaning in and behind those words. For example, when a client says, “I get better service from another company,” what does he actually mean? There are dozens of experiences and events that are hinted in that statement. It’s your job to determine what they are. What does that statement really mean? Here are some proven active-listening techniques that can help you understand your clients more deeply and accurately and show that you’re really hearing and listening to what they say.

Rephrase and repeat the statement and allow them to agree that that’s what they meant or clarify what they were actually trying to say.

Maintain eye contact while they’re talking.

Say, “I’d really love to hear more about that.”



Help Your Clients Realize You’re Referable When you meet with a contact or customer, ask yourself, “How did I exceed this customer’s expectations today or, at least, provide value she can recognize?” Answering this question honestly can form the basis for important follow-up questions. Perhaps you completed a needs analysis presentation for a couple, and they comment that they finally understand why they need the amount of life insurance your analysis suggests. A valuable follow-up question could be, “What would you say has been the most valuable part of this process?” Or, “We’ve talked about a lot of things today. What was the most interesting and valuable thing we covered?” Then listen carefully and sincerely. You’re setting the stage to ask for referrals based on the value your customer received from your work. When referencing the value your customer feels he’s received, follow up with: “I’m so glad our work together has been valuable. With that in mind, I have an important question to ask.” You’ve just reminded the client you are referable. Now, as you progress through the “Six Step” referral process, you’ve increased your chances of obtaining quality referrals.



The “Six-Step” Referral Process This six-step model is a proven way to approach customers, gain their permission to discuss referrals and gather the information you need to take the next step. The first time you use it, begin with a client who has a high regard for you. Clients who like and appreciate you will be accepting of even the most unpolished presentation and provide you with qualified leads. That initial success is something you can build on. Set aside at least 30 minutes with the client for this discussion. The steps are simple. Here’s an overview: 1. Establish the importance. To allow time for a relaxed conversation about referrals, don’t rush this part of an interview. Indicate the importance of the topic with a statement like, “Liz, I have an important question I’ve been meaning to ask you.” 2. Ask for their help. Honor your clients and ask for their help by saying, “I’m trying to serve more clients, and I value your help.” If you’re serving your clients well, and they like and trust you, they’ll probably be happy to help you. You just have to ask. 3. Explain how it works. Before you ask a client for referrals, explain how you’ll use the names and information they provide. Assure them that your contact will be professional and that you won’t bother their friends and contacts in any way. 4. Gain permission to explore. Make sure this is a good time for your client to talk with you about referrals. Say, “Could we brainstorm for a few minutes about people you know that I might be able to help?” 5. Sharpen their focus. Help guide your client’s thinking with prompts about the specific kinds of people you’re in a position to help—new parents, new homeowners, etc. Ask about neighbors and their family status and interests. If the client is active in religious organizations, schools, local sports, etc., probe to see if these groups could be a source for referrals. 6. Get the names, then the details. During your conversation, your client may think of several referral names at once. Take down the names as they come up, without interrupting for email addresses, phone numbers, etc. When your client has exhausted her list of names, go back to ask more detailed questions and fill in the information you need.



The Best Time to Ask for Referrals So is the best time to ask for referrals at the beginning of the sale, after you close the sale or when you deliver the policy? The answer is simple. Ask for referrals whenever it makes sense and feels right. As long as you’re not getting a strong negative reaction from a client, asking more than once creates a cumulative effect that can improve your results. Here are some good opportunities to seek referrals:

At your first appointment, when you show how your presentation process is providing value. Even if they don’t buy the insurance immediately, they should sense that you did a thorough job that was valuable to them.

At the time you close the sale but before you complete the application. Don’t feel rushed at this point or hurry your client. They’re choosing your solution to their problem, which is a good sign that they recognize the value you provide.

After closing the sale and completing the application. Don’t worry. Your clients won’t ask for their check back because you ask for referrals at this point. They should feel positive that a solution to their problem is under way.

At time of policy delivery. Your clients are usually feeling positive and proud of their decision. This is an excellent time to ask for referrals. You’re proving your value by delivering the policy that solves their personal financial problem.

After you send a thank-you letter for the business. You client will be thinking of you positively and will be open to a follow-up phone call using the six-step process to ask for referrals.

When you make follow-up service calls following an annual review. This is another ideal time to ask for referrals. You resolved an issue identified during the annual review and are delivering the revised document or phoning to follow up as you promised. Be sure to ask for referrals even if a prospect doesn’t buy now. Let your prospects know that you really enjoy doing business through referrals and by delivering excellent service to more people like them.



Gathering Referrals During The Application Process The application process is full of opportunities to identify referrals. Listen carefully; look for opportunities to gather names by asking questions that prompt your client to think about people she knows. These names represent future sales. Make this process a habit during the completion of all applications, and you’ll develop a strong source of high-quality referrals. The opportunities lie in asking smart, timely questions.

When the beneficiary or owner is someone other than the spouse. Where do they live? What’s their telephone number? What do they do? Do they have children? Are you aware of any health problems? Do you feel the service I’ve provided to you might be of value to them?

When recording contingent owners and beneficiaries. If something were to happen to you or your spouse, how could I contact your contingent owner and/or beneficiary? Do you have their telephone number? What is their address?

When getting employment information. Who do you work for? What do you do? How long have you been there? How many employees? Can you tell me about the benefits your employer provides? Do you have accident insurance? Is there cancer coverage? Do you have any coverage to offset prescription costs? Could you introduce me to any of your fellow employees? Who is the decision-maker in your business?

When asking health questions. We have a selection of products suited for many situations and needs. Do you know anyone with a health problem that may prevent them from getting a standard-issue policy? Do you know anyone who has been turned down for life insurance? Do you know anyone with high blood pressure, diabetes, asthma or a heart problem?

When completing family history. How many brothers and sisters do you have? What are their names? Do they live nearby? How old are they?

As you are filling out the application, make note of any names that your client provides. Then go back after the application is completed to get more details and contact information for each referral.



Using Product-Related Questions to Obtain Referrals Always remember that the people you’ve already insured are your best source of referrals. Using a product to obtain a referral is a simple way to prompt people to think about friends and family members they know with a specific need or situation. This method of prospecting can be done at almost any time—after the sale of a specific policy, on a service call, cold, as part of the “house next door” prospecting method—and in any setting, including home and business. Again, the “do you know” approach works best. Do you know anyone who:

Has been declined or rated for a life insurance policy?

Has asthma, high blood pressure, etc.?

Is overweight?

Has a dependent relative living with them?

Spends a lot on prescriptions?

Wears glasses?

Takes vitamins?

Is hard of hearing?

Has a family member that has had cancer?

Has a family history of cancer-related illnesses?

Has lost time from work as a result of cancer?

Have school age children?

Been in a car accident as the result of a drunken driver?

Has lost a limb or eyesight as the result of an accident?

Has lost a family member to an automobile accident? Asking questions to gather referrals is a simple approach with endless opportunities. As you make this prospecting method a part of your daily routine, you’ll find a comfortable, friendly way of asking that makes the discomfort of gathering referrals disappear.



Referrals Really are More Than Just a Name To maximize sales potential, the referrals you receive need to go beyond a name and some contact information. Knowing more—about their personal lives, children, other family members, employment, participation in sports and hobbies—helps you develop rapport and build a relationship as their insurance representative. By gathering this information from your referring clients, you give yourself five important advantages in your referral interactions. 1. You can develop rapport with the prospect through the sense of a shared personal connection. The information you learn from the referrer lets you interact on a personal basis more quickly. 2. You know that the referral has need for one or more of your services. You can verify these needs as you converse with the referral and ask follow-up questions. 3. You come pre-approved because of your relationship with the referring client. The referral sees you in a positive light because of the connection you share. 4. The referral is more willing to engage with you because of the personal approach you’re able to make. The information your client has shared about the referral opens the door and warms up the process. 5. Because shared personal information helps you understand the referral’s needs and build rapport more quickly, you spend less time proving yourself and can focus on helping him act on his insurance need. When you seek referrals, ask fact-finding questions like these:

Mr. Elliott lives across the street. Could you tell me about him?

How long have you known him?

What can you tell me about his family?

What kind of interests do you share with Mr. Elliott?

What kind of community, school or civic activities does he participate in?

I know you’re active in your community center. Is Mrs. Klein active too?

Mrs. Pharr is a close friend. What activities do you enjoy together?

Tell me about his/her work?

What’s the most interesting thing you’ve ever done together?

What’s the funniest moment you ever shared with him/her?



Asking Questions to Qualify a Referral

After you use the “Six-Step” referral process to successfully gather names from a client, it’s time to qualify the referrals by asking focused questions. Here are some examples:

“Your neighbors, Joseph and Anne Carlson, which house is theirs?” Observing the house will give you clues about the referral’s interests and lifestyle.

“What kinds of hobbies do Joe and Anne enjoy?” Questions like these help you identify interests you can use to build rapport with the referrals when you contact them.

“Does Anne work outside the home? What kind of work does Joe do? Where do they work?” Employment information will give you an idea about income and benefits or lack of benefits at work.

“How large is their family?” Knowing the number of children, even their names, ages and what schools they go to, adds a caring touch to your interactions with the referral. They’ll be impressed that you know so much about the most important people in their lives.

“Is Joe the man I see with you at…high school football games, church, civic club, bowling league, etc.?” Asking and following up on these kinds of shared experiences gives you another way to make your initial contact more personal.

“What’s the most interesting experience you’ve ever shared with Joe and Anne?” Knowing more than the standard facts about the referral gives you another way to build and strengthen your relationship.

As we saw in the graphic on page 3, knowing more about your referrals increases your chances of creating rapport, building a relationship and closing the sale. Knowing about your referral’s life and interests creates common ground where a long-term relationship can grow. When you perfect your qualifying skills, you set the stage for dramatically improved closing rates. High-quality, qualified referrals mean more sales, better persistency, more referrals and higher income.



Observation Prospecting When you’re in the home of a delighted client, look around. What do you see? Observe carefully, and you’ll spot clues that can translate into high-quality referrals. Always use the “Six-Step” referral process to establish the right atmosphere. Suppose you look around the home and see awards, trophies and photos—all fairly common. Now that you’ve spotted them, let’s see how observation prospecting works.

Awards or plaques from serving as president of Lions, Kiwanis or another civic organization. You could say, “Gosh, congratulations on this great recognition. You must be really involved. I’ve heard such great things about your group. Do you think any of your fellow members could benefit from my services?”

Trophies for a sport—say bowling. Where there are team sports, there are teammates who might be good prospects. Indicating the trophy, you could say, “You must bowl quite a game! How about the other folks on your team? Can they keep up? I wonder if I know any of them.”

Photos of people who could be grown children, grandchildren, friends’ children. Say you see a proudly displayed picture of a husband, wife and two children. You might ask, “Who’s this handsome family? . . . And where do they live? . . . Let me guess, I bet the kids are four and nine. . . . What are their names? . . . What grade are they in?”

People love to talk about their accomplishments, their interests and their families. Ask sincere questions and listen carefully. Gather names, then round out your findings with details that will help you build rapport with your referrals when you make that first contact.



Centers of Influence Identifying centers of influence in your market can be productive strategy in your quest for referrals. At its most basic, a center of influence can be anyone who provides you with referrals. But high-powered centers have three additional characteristics. They should: 1. Be well known and respected in the community 2. Have an interest in your success 3. Have access to a large circle of successful people A good center of influence doesn’t have to be a client. The person simply needs to be interested and able enough to deliver a steady stream of high-quality prospects. A handful of solid centers of influence can change the shape of your career. Your ability to get people to help you is critical factor in prospecting for referrals. Good centers of influence have to be identified, developed and nurtured. They don’t just appear out of thin air. Here are some steps you can take to cultivate excellent centers of influence.

Identify the names of people who are potential centers.

Set up an appointment to meet.

Know what you are going to say to encourage your potential center to help with referrals. He needs a reason to want to provide assistance. Perhaps you’re a customer, so he wants to help you in return. Or it might be a strong belief in owning life insurance or a desire to help his community and colleagues.

Be specific so the potential center knows what you want her to do for you. Ask her to introduce you to prospects—in person, by phone or by letter.

Once established, visit your centers of influence regularly.

Keep your centers updated on your progress and successes with the people they’ve introduced you to.

Nurture the relationship with your centers of influence, and they’ll become even more engaged and cooperative. They are invaluable contributors to your professional success. Thank them, inform them and let them know how much you appreciate their support.



The House Next Door The “House-Next-Door” (HND) prospecting method gives you great opportunities to be creative and gather rich information before you approach a prospect. The HND idea is simple. Use a third party—a new client, friend, existing policyholder or referral—to learn about the people who live next door. The person you ask will usually be able to share a wealth of information that can help you secure an interview and friendly reception from the neighbor. If you have a chance, do a little investigation on your own before you ask your third-party resource. Check the Internet or an intersecting street-listing directory to find the names of people in the neighborhood. Instead of asking, “Do you know who lives in that blue house and if they have kids?” you can ask, “Elly Jenkins’ house is really beautiful. Does she have children?” Knowing neighbors’ names will jog their memories and spur cooperation. You may be surprised at much you can learn about the people in the house next door:

Names and ages of the adults who live there

Number, names and ages of children who live there

Personal interests shared between neighbors

New neighbors or new home owners

New parents

Dependent relatives who live there

Occupations and places of work

Recent life-changing events

Recent illnesses, such as cancer

Recent accidents

Large prescription bills

Recent death and funeral expenses

With this kind of information in hand, it’s so much easier to approach the people in the house next door. You know their names and address—plus more personal, pertinent information, and you’re also the insurance person of a neighbor, friend or family member they trust. Your telephone or face-to-face approach could sound like this: “Hi, Mr. Abernathy. This is _______________ with [name of company]. I work with your neighbor, Marilyn Leigh. She mentioned that you recently purchased your home. [Wait for his reply.]



Marilyn told me how much you and John enjoy going fishing. That must have been quite an afternoon when the snake dropped into your boat! [References to personal events let the prospect know that you share a connection. The reference could be to a hobby, children, civic activities, etc.] I don’t know if my services could be helpful to you right now, but I wanted to get in touch and let you know how I’m working with other new homeowners. Some of things we’re doing might really be a good option for you and your family. If you’re interested, I could stop by this week for a few minutes. Would Tuesday or Wednesday after work be convenient? Make the HND approach part of your regular routine for sales and service calls. It’s a simple, powerful tool for prospecting.



Before You Make The First Approach

You have a solid referral—name, contact information and as many details as you’ve been able to gather. How do you make the first, important approach in a way that encourages the referral to accept your call or contact? By this time, you should have strong relationship with the client, family member or friend who’s made the referral, so ask for their help. Have a conversation like this: “Thanks for your trust in referring me to Patrick Quinn. Because I want our first conversation to be positive and successful, I’m wondering if you could help. When will you see or talk to Pat next? [Wait for the response.] When you talk, could your feelings about the service I provide and let him know to expect my call?” A day after the date your client said they’d see or talk to the prospect, follow up with a phone call to confirm that the conversation happened and see how it went. Thank your client and use what you learn as you proceed with calling the referral. Here’s an important point. Once you’ve been introduced to a referral, you’re in compliance with the “National Do Not Call” regulations. (To learn more about the regulations, visit donotcall.gov.)



A Simple Way to Simplify Referrals Here’s an approach for client development that consolidates many of elements we’ve covered so far:

Select the client or center of influence you’d like to approach for referrals. Make sure this is someone who’s motivated to help you out of gratitude for your service or some other strong relationship.

Use the Internet or a directory to identify five to 10 people who live in the area around your

target referrer.

Meet with your referrer and walk through steps 1-4 of the “$ix-$tep” referral process: 1. Establish the importance

2. Ask for their help

3. Explain the process

4. Gain permission to have a conversation about referrals

Share the list you’ve created and say, “These are people in the neighborhood I’d like to call on. Do you know any of them on a first-name basis?” Your referrer will usually pick several names. This is step 5 of the referral process, “sharpen their focus.”

Once the two of you have reviewed the selected names, ask, “”Who am I missing?” This will usually prompt your referrer to provide several additional names.

After you’ve received all possible names, finish with step 6 and fill in the details about the people your referrer has listed.

This same approach to obtaining referrals can be used with clubs you belong to, religious organizations and other interest groups.



Close the Loop Clients who believe in you and your services have the potential to give you a number of referrals over time, especially if you do a good job and let them know how much you appreciate it. When you receive a referral from a client, send a thank-you note and update on the status of the contact. Let them know if the referral became a client and if you’re scheduled to meet again. And ask them if there’s anyone else they think might benefit from your services. Be prompt, professional and friendly with the referrals you contact. When your clients hear good things from the people they’ve referred you to, they’ll continue to send more prospects your way.



Referral Objections Believe it or not, the biggest obstacle to receiving referrals isn’t getting turned down; it’s failing to ask in the first place. You’ve made the sale and received the check. Now you’re heading for the door hoping your client won’t change her mind, but wait a minute. If you spend a little more time, you can probably identify some new prospects and set the stage for additional sales. If each client refers you to three people, who then each refer you to three people, pretty soon, you’re talking about a serious pool of qualified leads. Spending time with your clients to gather referrals is a smart investment. How do you make it more comfortable and effective? Here are some ideas.

Make sure you’re referable. Do your clients feel that you do what you say? Do they believe you provide value to them? Do you strive to exceed your customers’ expectations? Are you trusted?

Use a system. Your company may have online tools to record, store and manage referral information. If available and effective, implement these tools to streamline your referral research and follow-up. Even simple note cards with room for the referrals name and additional information can work, and don’t forget the “$ix-$tep” referral process.

Make time and don’t rush. Use steps 1, 2, 3 and 4 of the referral process. The time you spend gaining referrals may be the most important time you spend during your work day.

Explain the type of referrals you need and how you’ll approach them. Use step 5 of the referral process and assure your contacts that you’ll use the information and introductions they provide wisely and discreetly.

Make asking for referrals a habit. The more you do it, the easier and more comfortable it will become. When clients object to providing a referral, it’s usually because they don’t understand why you’re asking or what you’ll do with the information. Here are solid responses to some of the most common objections.

Objection: “I don’t like to give out names!” Agent: “I understand why you might hesitate. But could I ask you a question?” Client: “Sure.” Agent: “If we were walking down the street and ran into one of your friends, you’d introduce me, right?” Client: “Of course.” Agent: “Well, that’s all I’m looking for—just a simple introduction. Would that work?” Objection: “I don’t want my friends bothered.” Agent: “I can promise you and your friend that I won’t be a pest. Here’s how I handle every referral:

I don’t take more than 10 minutes of their time the first time we talk. I leave them with one money-saving idea. I don’t return unless I’m invited.

Is that fair enough?” Sometimes you strike out with a happy client. They acknowledge the value you work provide but just don’t feel comfortable providing a referral. Don’t give up—give it more time. Try an approach like this after additional successes and a few months have passed.



“I’m so glad you see the value of our work together, and I’m so grateful for our continued relationship. Several months ago, I asked if you had any friends and relatives who might be able to benefit from my services. I understood completely that you didn’t really feel comfortable sharing names with me. Now that we’ve worked together longer, I’m wondering if you might feel more open to talking about referrals. I’m very interested in building my business by providing outstanding service to more people like you, and I’d sure appreciate your help. Are there people you know who have recently moved, had a baby, etc.?”



What to Do if You’re Not Getting Referrals Set aside 30 minutes and see if any of these referral-stifling statements apply to you. 1. I haven’t made myself referable. 2. I hesitate to ask my clients if I have made myself referable, so maybe I haven’t. 3. I haven’t made the “$ix-$tep” referral process a habit in my day-to-day work life. 4. I’m uncomfortable using the “$ix $tep” referral process to ask for referrals. 5. I don’t know the best time to ask for referrals. 6. I forget to use the referral process. 7. When I deliver a policy, I feel awkward asking for additional information. 8. I don’t think people want to push me on their friends. How do you overcome obstacles like these? First, recognize that everyone benefits from referrals. Often, people give you referrals because they want to help the people they care about get excellent products and services— like the ones you provide. You’ve delivered value and solved important problems, so they want you to do the same for their friends and family. When you have an outstanding meal at a restaurant, you tweet it, post it on Facebook and share the news. Your expectations were exceeded, and you want the people you care about to have the same pleasant experience. If it’s true about food, why shouldn’t it be true about insurance? Second, use the “Six-Step” referral process. Learn it, rehearse it and use it consistently to help your clients and centers of influence understand your motives and the need for referrals. A conversation guide you’re comfortable with will boost your confidence, increase your comfort and enhance your results. As you’re preparing, role play the process with your manager, a colleague or significant other. Third, make it easy and professional. When you sit down with a potential referrer, do everything you can to make the process fast, simple and professional. Use your laptop or tablet computer to enter information into a template you’ve prepared in advance. Being professional increases the sense that the information you’re gathering is important and will be used with discretion.



Setting Up Your Referral File To put the referral information you gather to work, you need a system for storing, managing and tracking it effectively. It’s a matter of planning for success. In the back of this guide, you’ll find a supply of prospect cards for each week’s planning activity. Each gives you room to fill in important information about each prospect. Because a referral is more than a name, as we’ve seen, use these cards to record the personal information and insights you gather about your referrals. You can use the cards as your management system or enter them into a client information management system that can serve as a permanent record and resource. Here’s a proven system that’s simple, smart and effective: To set up your referral file, you’ll need two 3” x 5” file boxes, one with numerical tabs (1-31), monthly tabs and alphabetical tabs in that order, and one with alphabetical tabs only. The first box is your active file, and the second is for deferred referrals. Here’s how to use your active box: When you plan to contact a prospect or have a meeting scheduled with a prospect in the current month, use the numerical tabs to file her card behind the date. If you plan a contact or meeting for an upcoming month, put the card behind the tab for that month. During the last week of each month, refresh your current month tabs by taking the cards for the upcoming month and re-filing them by the date of your planned contact. Each day, pull the cards for that day, begin your calls and attend your meetings. If you don’t reach a referral, move the card to a later date when you’ll try again. If your contacts with a referral don’t go anywhere after multiple tries, pull the card and put it behind the appropriate letter tab in your deferred box. You’ll use these for future follow-up and reference. For example, if a contact refers you to someone you’ve deferred, you can revive the card and try again with new information and a fresh referral. Once a prospect becomes a client, remove the card and enter the client’s information in your online management system.



Summary Successful insurance agents focus relentlessly on high-quality referrals. A steady stream of well-qualified referrals is the key to higher sales and a long prosperous career. Want to build a high-growth agency? It all starts with referrals. Remember that you earn high-quality referrals by being liked, trusted and providing value to your client. Work hard to exceed customer expectations, practice prospecting techniques and develop good habits. Make the “$ix-$tep” referral process an automatic part of your daily work routine. Opportunities to gather referrals are around you all the time, every day. Concentrate and don’t miss out because you’re busy, distracted or insecure. The key to receiving high-quality referrals: Earn them first, and then ask for them!

A Guide to Earning Referrals and Building a Thriving...

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