With the technology of today, insurance agents can streamline and modernize forms management systems with automation and integration. This opportunity significantly reduces operating expenses and improves overall business performance. Yet, using these three specific forms with every client can:
- Generate more sales
- Enhance branding and marketing
- Increase retention
- Reveal possible future coverage concerns
- Prevent E&O claims against your agency
- Reduce exposure to compliance and regulatory issues
- Increase customer satisfaction
- Demonstrate you are a true consultant and professional in the insurance industry
There are many forms in the insurance industry, so you probably wonder how three forms could do all that. Let’s take a closer look. The three forms are:
- Referral Form
- Cross-selling Form
- Coverage Rejection Form
Referrals in the insurance industry occur when existing clients of your agency give you the name and contact information of one of their friends or family members. Your customer believes that this contact is a prospect for you. Your current customer recognizes someone in their circle as a potential customer interested in possibly purchasing some insurance from you.
Ideally, your excellent customer service creates a great experience for your customers, so that they tell their friends and give you their friends’ contact information. But it is not always quite that easy. Sometimes even with the most amazing customer service and happy, satisfied customers, current customers still need the motivation to give referrals.
Full referral programs take some time to implement. But since referrals are the most coveted way to get new business, most successful agents develop one. The first step to a lucrative referral program is your referral form.
Word-of-mouth powers your referral network, so with the right approach, this is an extremely cost-effective way to get new customers.
- Referrals typically have a high probability of becoming customers because of the social proof provided by your referral source.
- Referrals lead to multi-line policies, creating more value for newly referred customers and more income for you.
- Paired with excellent customer service, good referrals result in an improved relationship with the referral source.
- And customers who are referred by a friend are far more likely to feel comfortable referring their friends!
Insurance Referral Fees
Often what motivates current customers to provide referrals is a referral fee. Essentially, you say thank you to customers for sending new referrals with a payment. Gift cards are common as a reward for referring new business. Usually, an agent offers a selection of different gift cards from local businesses. And many very successful agents prefer to use gift cards they purchase from their corporate customers.
Current customers receive a small monetary incentive when they share a referral name with a basic introduction. And then they receive an additional bonus when each new client signs up. For example, a $10 gift card for a coffee shop is an excellent incentive for every new name with a simple e-mail introduction. Then later, a $35 gift card is ideal for each referral who buys a policy. The gift cards are an easy way to keep the incentives on-hand, and they are easy to pop into the mail. And although many people will not go out of their way for $10 in cash, $10 at their favorite coffee shop is more valuable!
NOTE: Depending on your state(s), usually, agents can pay a finder’s fee to a customer for a referral. But in some states, you cannot pay that same referral fee to a licensed agent. That falls under the regulations covering commission splitting. So, check the relevant state laws concerning referral payments.
How to Use Insurance Referral Forms
A referral program only works if you track it properly. The easiest and most accurate way to manage your referral program is with insurance referral forms. An insurance referral form tracks incoming leads as they come in from existing customers.
Many agents use a simple spreadsheet type program to keep track of those customers, policies, and details about the sale. Other agents find a CRM with specific reporting options to be more flexible.
Probably the best way to set up a referral program using a spreadsheet is by adding start dates for every new customer. So, you can decide when to reach out to ask for referrals. Using a calendar platform, when you enter the start date, you can set an automatic reminder to contact them three months later. When your current customers receive the referral form, they complete it and send it back to you.
These forms can be hard copies or online. If you use online forms, you can add that you are always looking for referrals into your e-mail signature line, promotional e-mails and newsletters. Also mention it on social media, too. Creating specific campaigns to promote referrals is a great way to expand your book of business.
Create a Successful Referral Program
A successful insurance referral program requires a system to keep track of how you obtain and reward customers.
Most customers refer people who are similar to them. They may do similar work, drive similar cars, have a similar financial and marital background, and live near each other. So, an extra benefit from a referral program is how often you can write similar policies, which saves time.
How to Get More Insurance Referrals
Unfortunately, there is not an instant method to get more referrals. But you increase the chances of showing a genuine interest and providing unbeatable customer service to your current customers. Reach out to show you care. Check-in with them every few months to make sure that everything is going well. And don’t forget to ask for referrals! Always mention to your best customers which of their friends and family might need a better insurance policy. Checking in regularly and remembering to ask for referrals kickstarts any successful referral program.
The Questions on the Customer’s Copy of a Referral Form
No matter if you use paper or online referral forms, the questions are the same. Your customers need to provide you with enough information so you can follow up. It only takes about 2 to 3 minutes, at maximum, to complete. These are the fields typically used on a customer referral form:
Current Customer’s Personal Data
- Choices for referral rewards
Referral’s Personal Data
- Contact Phone Number
- E-mail Address
- What coverage the referral needs or other details the agent needs to know
By using the customer referral form with every client, you can generate leads. The more qualified leads you havem the more likely you are to increase your sales. And once a customer gives you a referral, their retention rate increases. Simply by making the recommendation to another, they cement their decision to work with you. As the choice to work with you becomes more engrained, you discover increased customer satisfaction levels, too. Over time, you become part of the network of friends and family as a true professional insurance consultant.
Referrals require some time and focus, but approaching each current client is far less expensive than other marketing systems. Plus, referrals have a higher closing rate, give you more referrals, and have exceptionally high retention rates. It may be uncomfortable in the beginning to create the habit of using a referral form, but it is possible to eliminate the need for cold calling!
With your insurance agency based on referrals, you focus on delighting current clients, then periodically remind them to send referrals.
But many insurance agents do avoid asking for referrals. Many agree that it should work, but few work up the nerve or the system to really make it work. Here are some statistics. Maybe these will help you to reconsider:
- 82% of consumers trust referrals from their friends and family, based on a Nielsen study. Compare that to 70% in branded websites, 61% in brand sponsorships, and only 56% in e-mails they actually signed up for themselves.
- The same study found that consumers are 400% more likely to buy when a friend refers them to a specific provider.
- Conversions of referrals (11%) are almost 4X the average of other marketing channels, based on the findings of a Marketo study.
- The American Marketing Association’s Journal of Marketing published research that says referred customers have higher margins, customer lifetime value, and are more loyal.
- More than 80% of customers are willing to give referrals, but only 29% do, so says a Texas Tech University study. Why? They were never asked!
Referrals Do Not Happen on Their Own.
Agents cannot remain passive and expect to build a book based on referrals. But fortunately, implementing a referral form makes referral requests much easier. Here are tips for how to get more referrals using your referral form.
- Specificity – Start with the specific reasons you enjoy working with your customer. Then let them know you would like more customers just like them.
- Directness – Directly state, “I would appreciate an introduction.” Usually, when agents work not to be too pushy, customers find them wishy-washy, or it backfires, and they seem even pushier.
- Sincerity – Remind your customer that you make your living selling insurance, and that is why you ask for referrals. Also, remind them that you will follow up in the same professional way you worked with them. And never, never, never, never… leave a referral without a follow-up. You are bound to lose two customers (at least) that way.
As an industry professional, show people who offer you their connections, time and support that they help you. Be sure to keep them in the loop, even if the referral does not convert into a sale immediately.
Use the Referral Forms to Get a More Positive Attitude about Referrals
Many agents worry that asking for a referral makes them seem pushy or desperate or will make customers mad. Sometimes they forget to ask because they are too involved in the sale or serving the customer.
- Firstly, start to view referrals as helping both you and your customer. When you can help your customer solve a problem for their friend, they gain more social capital in their network.
- Then, make sure your customer service behaviors are in order.
- Use an automated e-mail system to remind customers to provide referrals.
- Add referral requests on your office signage, e-mail signature, and on everyone’s voicemail message.
When is it the Best Time to Ask for Referrals?
There are many great moments to ask for referrals, but the best time is right now. Every customer touchpoint is an opportunity. These points provide specific occasions to uncover referrals:
- Ask new clients who have just made a purchase. Do not waste these positive feelings. Ask in person, send an e-mail, letter, or a handwritten note.
- At renewal time, ask strong supporters, especially those with multiple products, or who have already referred people to you.
- After a client provides a referral, acknowledge the referral in a follow-up contact and open the door for more referrals.
Put all these pieces together to help make a strong impression on customers as you ask them for referrals.
Cross-selling is when you promote a related product to an existing customer. It is similar to upselling when you convince customers to add something at a higher cost to a current purchase.
The First Step – Identify the Opportunity for Cross-Selling
The classic example of cross-selling is, Do you want fries with that? The simple addition of that question has made billions of dollars. So, when do you ask your equivalent cross-selling question?
- A customer has life insurance but not health insurance
- They are a group health client but have not signed up for the add-ons like vision and dental
- The customer purchased life insurance but no annuities
- They own life insurance but not short-term disability coverage
Of course, it is possible that your current clients hold these other policies with another agency. It is worth asking when those policies are up for renewal.
You probably have been thinking about plenty of different cross-selling opportunities that apply to you and your agency. Let’s make sure you can act on them to make more sales.
Many Agency Management Systems have an automatic report designed to identify cross-selling opportunities. It is probably called something like Policy Cross-Sell Report, or something else equally obvious.
If you are still working with Excel spreadsheets, use the Find function to search for specific coverage types. Then, go through each result individually and check which coverage they don’t have. Make a note of those. Paper files are even more time-consuming.
What to Do with Cross-Selling Opportunities
What you do next depends on which communication channels you typically use with your clients. You can call them all individually. Or if you have a long cross-sell list, a mass e-mail may be a good place to start. Many Agency Management Systems have an automatic method to send e-mails to everyone on your cross-selling report. Sometimes you can set up the criteria and not even bother to run the report. Just let the system manage it. But the reports are helpful to read as they show how much potential there is in the project!
Cross-Selling Phone Calls – Short, Sweet and Highly Productive!
Get the most impact from a cross-selling campaign by adding some phone calls. Look your list over and see who you think might respond best to a call. Consider demographics and your ongoing relationship. Give them a call to say something like:
“Hey, Bill. I spent some time looking over your coverage, and I noticed you have a good policy for [health insurance]. But, you aren’t enrolled in any [dental] coverage.
There are some really great options. I would love a chat with you about them. It should take about half an hour, have you got some time…?”
As you consistently identify cross-selling opportunities with current customers and regularly contact them, you keep your book growing. And it shows your clients you pay close attention to their accounts and coverage. All because you care enough to take the time to contact them about the coverage they might need.
How to Expand Your Portfolio with Cross-Selling
By starting to include ancillary products into your portfolio, you can now sell supplemental insurance that compliments your customers’ primary plans. For example, ancillary product offerings include several different types of coverage:
- Critical Illness
- Fixed Indemnity
- Final Expense
The products change as your customers get older. Every life event brings new coverage needs. Cross-selling expands your portfolio while establishing lifelong relationships with your customers.
Cross-Selling Insurance Techniques
During your first meeting with every customer, talk about all the products you offer. Also, be sure to reach out to existing customers as they reach life milestones. Contact them as they send a child to college or welcome a grandchild to the family.
Prepare a brief explanation of the full range of your products. Be careful not to overwhelm them with too much information. Just cover enough to spark their interest. Set up an appointment later to explain in detail.
Often cross-selling insurance products are simply routine. Much like they ask, “Do you want fries with that?” “You can ask, “Do you need a vision plan?” A quick question about coverage gaps can increase sales and improve your customer’s overall coverage.
Social Media and Cross-Selling Insurance
Use social media accounts to communicate about the variety of coverage options available. Cross-sell through social media with posts about the benefits of each type of plan, low costs, and potential savings.
Myths and Misconceptions
Clients often think additional coverage is expensive or unnecessary. Dispel misconceptions with a deep understanding of each product, the costs they mitigate, and the premiums.
What Does a Cross-Selling Form Look Like?
Every agent has their own version of a cross-selling form, but the goal is always the same.
Cross-selling forms systematize the process of cross-selling to assure every client is asked about every applicable insurance coverage option.
Some agents use a simple checklist. The customer’s name and date appear on the top, with a simple list of product types, and signatures on the bottom. Agents then explain to the customer that they need to fill out this form. As they list each insurance type, they give a brief description of the coverage. If the customer is interested in further coverage, either a new appointment time is set, or they purchase it right then.
The most important aspect of a cross-selling form is that it reminds the agent to ask. So, that way, the form prompts you to ask in the two major distinct types of cross-selling situations.
- Customers of a Competitor – They already bought from a competitor, so they are familiar with the coverage. Cross-selling works to get their business with your agency. Keep asking, check their renewal dates, continue to follow-up, and sell your agency.
- New Customers – These prospects do not already own the product, so they may not be aware that the product exists, or their need for it. Keep explaining, educating, creating a need, and selling.
The two types do require a slightly different approach. So, if you currently treat all cross-selling opportunities the same, think about the different approaches and how to address them. Modify how you present the products as you go through your cross-selling form in these two situations.
Coverage Rejection Form
When customers choose not to purchase some types of coverage, the law may require they sign a coverage rejection form. The form includes a basic explanation of the coverage and asks the client to confirm that they do not want that insurance.
Many agents send a confirmation letter or e-mail once the customer confirms the policy purchase. Here is an example of a Rejection of Coverages Letter.
January 1, 20XX
123 Main St
SUBJECT: Agency Insurance Program
Dear Mr. Client,
Thank you for selecting ABC Agency to manage your [type of policy] insurance needs effective 2024. The policies have been ordered from the [name] insurance company. We will deliver them to you as soon as we receive them.
To confirm our previous conversation, you received premium indications for the following coverage, but decided to decline them at this time:
- [policy type #1]
- [policy type #2]
- [policy type #3]
Please [print and] sign the Rejected Coverage Acknowledgment Form and return it to our office before 2024. [Please, find a self-addressed stamped envelope enclosed.]
Once again, we appreciate your trust in ABC Insurance.
Your Local Agent
Rejected Coverage Acknowledgment Form
I acknowledge and understand that the following insurance policy(s) was offered to me. I decided not to purchase these coverages at this time:
- [policy type #1]
- [policy type #2]
- [policy type #3]
My agent explained the potential financial impact of not carrying these important insurance policies. I realize my rejection of the options could result in the denial of my claims in the future.
How Coverage Rejection Forms Build Client Relationships
It might be hard to see on the surface, but coverage rejection forms build client relationships. It works much like someone signing themselves out of the hospital Against Medical Advice (AMA). When you (or the doctor) as a professional, give a customer (or patient) advice, they have the option not to follow that advice. But if they still want to do so, they must acknowledge that they have ignored expert advice. So, they acknowledge you as an expert.
Plus, your customers see you as offering your professional advice but accepting their choices. Ultimately, the coverage rejection process makes sure they understand what they are not covered for, so they can choose later to get the coverage. Notice that at this time is repeated more than once in the samples. This reinforcement allows customers to choose to purchase the coverage at a later date.
E&O Claims and Coverage Rejection Forms
By keeping your coverage rejection forms on file, you protect your agency from E&O claims. The proof exists, in writing, that the customer confirmed that they understood what losses would not be mitigated. Make sure you keep every coverage rejection form required by law.
Coverage rejection forms protect your agency while solidifying the relationship with your customer. Spend the time with your customer going over the details of the form and explain why they must sign.
In today’s competitive insurance market, customers demand more reliable business processes, improved workflow, and time reduction. Most of what is necessary to compete is time-consuming, expensive, or unduly complicated. Yet, technology allows you to streamline your forms through automation and integration, to improve overall business performance.
Implementation of three critical forms 1) Referral Form 2) Cross-selling Form and 3) Coverage Rejection Form provides multitudes of benefits. Agents practice and streamline using these forms to improve the customer experience. By using each form with every client, agents generate more sales while increasing retention and customer satisfaction. These forms even reveal possible future coverage concerns and prevent E&O claims against your agency. Ultimately, making you appear as the true consultant and insurance professional you are.
Read our next article on How to Start/ Run a Successful Insurance Agency from Start to Finish