Referral prospecting simply means prospecting through people that you know — your existing contacts, clients, and business partners. Why? Referral prospecting is the quickest and most effective way of filling your pipeline with opportunities. Most research shows that leads close five times faster when they come through referrals.
In the insurance business there are so many ways of gathering new prospects these days. When I started in the business, I was 21 years old and fresh out of college. I had to develop a Project 💯 list of all the people I knew that I could potentially sit down with to show my services to. I will tell you; it was a bit uncomfortable, but also very effective. Since at 21 I didn’t know a lot of people that fit the profile of a potential client most of my names were friends and relatives.
I ended up doing roughly 34 sales in my first month or two and was feeling like I was really learning the business and growing my skills. This all stopped the day my list dried up. I was stuck with no one else to call. My manager wisely told me to contact all my new clients and let them know there was one more thing I needed to see them about. This simple but effective step had me go back and really dive into referrals with each one of them. I was blessed to receive approximately 200 referrals from all my clients, but more importantly I learned a valuable lesson. By not asking for referrals, I backed myself into a position where I literally was cold calling for a while until I could replenish my list of quality prospects. While I don’t recommend this long term, it did give me the true motivation I needed to master referral gathering skills.
I worked diligently on honing these skills and as a result, averaged about 35 new names per week while I was an agent.
Studies have shown that 89% of people would give their advisor referrals if asked. Since most agents in our industry don’t get many referrals, it just shows that most agents simply don’t ask. Almost 9 out of 10 people will give referrals! Our fear and lack of practice stops us in our tracks from gathering the best possible prospects available.
Rather, we spend our time calling leads, lists, or so many other types of prospects that rarely produce results. The fact is….referrals are SO much easier to book in and do business with. The trend pays it forward, as most referrals are also more likely to refer as well. To build a strictly referral-based practice a commitment to training and mastering your skills in referral gathering is crucial. You must earn referrals by delivering exceptional service and going above and beyond with each client relationship.
Additionally, I have grown less fond of the term “referral” and now try and use “introductions”. An introduction is actually what I’m looking for and all these introductions represent borrowed trust.
Think of a triangle of trust. Your client has a close friend or family member they have trust in. You and your client also have trust in each other. What you are simply looking to do is borrow the trust already established from your client to their friend or family member……and as I like to say, complete the triangle. This is borrowed trust, and is the true image of what successful referral gathering looks like.
I encourage everyone to start focusing on mastering your referral prospecting methods and your objection handling skills. You also must truly work on overcoming the fear that may plague you from making the ask….. the most growth in life, and business, happen during periods of discomfort.
Referrals are the gold standard in prospecting. Be relentless in your efforts to serve your clients, and you will consistently earn referrals.
