Does Referral Marketing Work for Insurance Agents?

As a business owner, keeping your eye on your bottom line can be nerve-racking—even when business is good and your revenue is growing. Why? Because it doesn’t matter how much money you’re bringing in if a massive chunk of it is going right back out the door for expenses. For many insurance agents, one line item is eating their business alive: marketing. 

Marketing is obviously a critical business activity: People can only do business with you if they know about you. But with so many different ways to spend your marketing budget—and, quite frankly, waste your marketing budget:

  • How do you know where to best invest those dollars? 
  • How do you avoid getting ripped off by yet another marketing “expert”? 
  • How do you know if the latest and greatest marketing idea is just a fad or if it’s here to stay?
  • How can you feel certain you’ll get a healthy return on your investment?
  • How can you get an edge over your competitors when you’re all doing the exact same thing

Referral Marketing for Insurance Agents

The truth is, there’s no such thing as an easy button for marketing—regardless of the industry. To reach all sorts of people in all different phases of the buyers’ journey, you have to diversify your approach using omni-channel marketing

But for service-based businesses like insurance, leaning into a particular channel is critical. That channel? The people who already know and like you. 

In case it’s not abundantly clear: Yes, referral marketing works for insurance agents, particularly if you have a savvy approach to getting those referrals. I’ll get to that in a minute, but first let’s cover some basic information.

Referral marketing assumes your business is worth talking about. 

A referral happens when someone has a good experience with you or your business. If your current clients are dissatisfied, they aren’t going to send their friends to you. If you don’t have great relationships with other business owners in your community, they aren’t going to send their customers to you. 

That doesn’t necessarily mean that if you’re a decent human running an honest business you’ll always be flooded with new leads. That’s just the necessary starting place from which to build your referral business. More on that in a bit.

Referral marketing is low risk and high reward.

It costs zero dollars for Mr. Smith to tell Ms. Jones about your insurance office. Zero! What other marketing tactics can you think of that are free

But it gets better: Warm leads are more likely to purchase from you than cold leads. That makes sense, doesn’t it? The most likely reason for Mr. Smith to mention you to Ms. Jones is if she asked for a recommendation because she’s looking for what you offer. At that point, it’s your business to lose.

Referral marketing brings you high-quality leads.

If you have high-quality clients and business relationships, chances are good they have high-quality friends and clients. That’s not a judgment; it’s just human nature: People tend to hang out with people who are like them. So, when you actively cultivate your reliable connections, you’re more likely to receive referrals with whom you want to do business.

Getting Started with Referral Marketing

Note that I wrote “actively cultivate your reliable connections.” That’s key. Just because referral marketing is “free” doesn’t mean it’s magic. It takes some work to get a steady stream of warm leads knocking down your office door… but that work is worth it. 

You’ll find lots of referral marketing advice online, much of it centered on building a referral “program.” In this scenario, you incentivize your current clients—through cash, gift cards, or discounts—to send their friends to you. I have not found this approach to be particularly effective or sustainable. People know a gimmick when they see it, and when Ms. Jones finds out Mr. Smith got a kick-back, it devalues the referral. (A simple, sincere “thank you” is always appropriate, of course.)

In a recent post, I shared some not-gimmicky ideas for building referrals using your existing client database, such as:

  • Identifying your strongest client relationships and reaching out to them.
  • Defining your ideal client and asking for those referrals.
  • Changing your mindset about referrals by recognizing that you offer something valuable to your clients.
  • Starting today by developing a habit of asking for referrals.

Keep in mind, though, that focusing on your current client database is only half of the referral marketing equation. If you want to become the go-to agent in your community, you also need to focus on referral partners. 

Referral Partners for Insurance Agents

Referral partnerships are based on a fundamental truth of human nature: “You scratch my back; I’ll scratch yours.” The most successful arrangements are between businesses serving the same ideal client, and as an insurance agent, your ideal partner is a realtor or lender. (I talk about why over here.)

Of course, most realtors and lenders already have a have a stack of insurance agent business cards on their desk. But here’s the thing: Most of those insurance agents see realtors and lenders as a simple source for referrals, not as partners for referrals.

There’s a big difference.With RECAMP, you’ll become a trusted partner to realtors and lenders, making it easy for them to refer their clients to you—every time. Register for our free, 30-minute webinar and learn how to stand out from the crowd. No more trinkets. No more gimmicks. No more begging. Just referral after referral after referral. Register today.

“I’ve tried every marketing program the company has to offer. RECAMP® has generated more business than all the others combined.”

“The first year I used RECAMP®, it paid for its self in just a few months.”

“By consistently working RECAMP® my production is up 147% over last year.”

Register For Our Free Webinar

Learn how RECAMP can help you gain 30 new referral sources in just 60 days.

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Lance Groenewold


Lance wants your insurance business to grow and he understands that you've wasted a lot of money, time and hard work on marketing with not much a return on your investment. As the business manager for RECAMP, he's worked with insurance agents across the country to help them build their own automated referral network that consistently generates high value leads.

Ready to join thousands of insurance agents who have discovered the magic of RECAMP?

We specialize in marketing for P&C insurance agents and insurance agency marketing.

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