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Many articles have been written about the Three R’s of Insurance; Retention, Rounding, and Referrals. In fact, it was the theme of one of MSAA’s first conferences at the Days Inn in Flatwoods. 

We all know that it is easier to keep your current customers than to get new ones. This is retention. These people know and trust you. Otherwise they probably would not do business with you. So, doesn’t it make sense to have frequent communications with them? This does not have to be in person or by phone. It could be via social media such as Facebook or Twitter, or even a Blog like the one you are reading now! This reinforces their decision to go with you as their agent and helps you to retain their account.

If you do choose to meet with them (an annual review, for example) or speak by telephone, it is an appropriate time to ask if there is anything else to insure, such as a vehicle with another carrier, a boat, ATV, etc. Do they own a business? In other words, it is time to round that account. We know that the more lines of business the agent writes, the less chance that the insured will leave you. This is the most efficient and cost-effective method of growing your book.

The final R is Referrals.  Getting referrals is the almost as efficient as rounding. Last week I was on a commercial lines sales meeting call with several agents. The question came up, “When do you ask for referrals?” The resounding answer was ALWAYS! As noted above, your customers know and trust you. Hopefully you have earned that trust. They should want to help their friends have the same great insurance products and service that you have given to them. Also, they should want to help you grow your business. By selling to referrals, you already have credibility with the prospect, since the referring person gifted that credibility to you.

Our Regional President, Tom Barrett, teaches in Dynamics of Selling that referrals are the surest way of bypassing gatekeepers and getting directly to the decision maker (actual buyer). He recommends doing some homework before you go for your appointment. Look up and have a list of other businesses in the area that are alike or similar. This allows you to ask if the insured knows any of the people on the list. In most cases the insured will know several, if not most, of the list. Then ask which they would recommend that you get in touch with. That leads to the key question, “Can I use your name as a referral?” If the answer is yes, the follow up may be “Will you call them for me to set the appointment?” This may sound pushy, but sometimes the answer will be yes. After all, the insured has entrusted you with their account. They should be willing to recommend you.

This works with personal lines customers as well, especially homeowners. Ask them for the names and phone numbers of their neighbors. Then send a letter with your business card to the neighbors and tell them that you insure their neighbor and would like them to keep your contact information in case something happens when your insured is away. Of course, follow-up and offer to quote their home and autos as well. 

As you can see, referrals offer an easier way to get new warm (or even hot) prospects for both your commercial and personal lines business. If you don’t ask for referrals, please try it! The worst they can say is no. When you get in the habit of always asking for referrals, you may find, as the folks on the sales call last week, that referral selling is the second most efficient way to grow your business, right behind rounding existing accounts.

A final note: I have one or two spots left for the June Business Insurance Advantage class. Graduates of this course who embrace with the process have significant growth of their commercial book. In fact, graduates’ business tracked by SIAA shows a 23% increase in business written, both commercial lines and personal lines.

We will see you next week at our Show Me the Money Meeting, on Thursday, April 12^th!