One of the most effective ways to grow your insurance agency is through referrals from clients and professional connections. Yet surprisingly, many insurance professionals don’t have systems in place to help generate a continuous flow of referrals.

The Credibility Factor

According to the National Association of Insurance Commissioners, 79% of insurance shoppers ask family and friends for referrals and 65% turn to colleagues and social acquaintances. These referrals are powerful: a Nielsen survey found that 84% of people trust referrals from people they know—a credibility level significantly higher than any form of paid marketing.

There are also far fewer sales hurdles to overcome when you present your agency to someone who has been referred to you. According to expert sales trainer Tom Hopkins, the closing ratio for non-qualified leads is 10 percent versus a 60 percent close ratio for referred leads.

Since referrals are so valuable to grow your insurance agency, it makes little sense to leave them to chance.

5 Ways to Grow Your Insurance Agency with Referrals

1. Exceed expectations.

Agencies that generate multiple referrals generally share a common trait: they go beyond customer expectations. When agencies deliver quality insurance products with great service, they build customer loyalty which is the surest path to increased referrals.

One way to gauge customer satisfaction is with an online survey using services like SurveyMonkey ( or Delighted ( The best questionnaires are brief (no longer than ten questions) and include “How likely would you recommend our agency to others?” Allow people to score your agency from a one (not likely) to a ten (very likely) and share with your team why they’ve given you a low or high score. It’s important to know why you get nines and tens and to praise your staff for what they’re doing right. It’s equally important to dig into low scores (one to six) to understand where your agency can improve.

2. Find a few great networking groups and attend regularly.

There are many excellent networking groups for insurance professionals including chambers of commerce, Business Networking International, and service clubs like Rotary. Trade associations that your customers belong to can also be useful groups to join. However, the objective is not to rack up memberships but rather to engage in the organizations that you join.

It takes time and effort to build relationships of trust that result in referrals. Regular attendance, active participation in leadership, and a friendly attitude towards others are essential for developing strong connections. Meet with group members outside of regular gatherings to develop rapport and understand ways that you can help them grow their businesses. The best way to get referrals from the people you meet while networking is to help them achieve their goals.

3. Keep meeting new people.

It’s easy to stick close to friends or colleagues in new groups and at networking events. Nonetheless, make it a point to have conversations with at least a few people you don’t know at every event. To make it easier, ask questions—nearly everyone enjoys speaking about themselves and you’ll learn interesting information in the process. Also, don’t rule out a conversation because someone doesn’t look like your “typical” customer. Everyone matters, and you never know where your next great customer or referral will come from.

4. Ask for referrals.

According to a Texas Tech survey, 83% of satisfied customers are willing to refer a product or service but only 29% actually do so. From conversations with hundreds of business owners, I’ve found that there are two principal reasons for this gap. First, the product or service provider forgets to ask for a referral. Second, many professionals don’t want to be perceived as pushy—so they choose not to ask at all.

Yet it is important to understand that the key to getting more referrals is to ask for them. When I started asking for referrals, I received more in three months than I had in the previous year. Now, asking for referrals is an important part of my process of wrapping up a sale and following up with satisfied customers.

I’ve found the best way to ask for a referral is to let people know why I enjoy doing business with them in specific terms and how I would love to have more clients like them. This sometimes triggers an immediate referral. But, more often, I’m planting a seed that will result in a referral at a later time (sometimes years later). The beauty of asking for referrals this way is that my clients know exactly why I appreciate doing business with them—which strengthens our relationship and their loyalty.

If you feel awkward about asking for referrals, keep in mind that most people want to help others. So, if you provide great service and excellent products, you’re giving your customers an opportunity to provide value for the important people in their lives by referring you.

5. Express Gratitude.

I used to be a loyal customer of the men’s clothing department of a large department store. One salesman always provided wonderful personalized service and outstanding recommendations. He always followed up with a handwritten thank you card after I purchased an item, whether it was small or large. After he left the store, I stopped receiving thank you notes. And, without doing so intentionally, I stopped buying from the store even though they continued to send me expensive catalogs.

To avoid losing customers or referral sources, it’s essential to have a methodology in place for expressing gratitude. When somebody refers business to me, my first choice is to thank the referrer face-to-face. There’s something about gratitude expressed personally that no form of electronic communication can beat.

However, when my referral source is far away or unavailable to meet, I like to pick up the phone to say “thank you.”  Recently, I reached an old friend who said, “So great hearing from you! You’re the first person I’ve spoken with today. I’ve been connected to my computer all day.”

Also, when you call somebody to say thank you, you can ask questions about the person being referred to you. This can provide valuable insight that you would never discover elsewhere and which will allow you to prepare in advance—thereby increasing your chances of developing the rapport that leads to a sale.

Finally, while personal thank you cards are not common in the digital age, they are highly effective. They don’t get lost in crowded email inboxes or ignored like many paid marketing messages. Agents that send personal notes regularly keep doing so for one single reason: they work.

A Final Word

Referrals are too important to leave to chance. Develop and stick with a methodology for cultivating referrals and you’ll find it easy to grow your insurance agency one relationship at a time.

(This blog post was adapted from an article that I wrote for the 2016 Summer edition of The Oregon Agent, the official publication of the Independent Insurance Agents and Brokers of Oregon.)