6 Key Methods to Drive Customer Referrals in Insurance Companies
Rohit Singh VP of Customer Engagement Schedule Free Consultation
  • Traditionally, insurance has never been a term with anything to do with customer engagement or value journey. This is why you’ll rarely find content talking about customer engagement in the insurance sector.

    The most common metrics of customer satisfaction are retention rate, and if the retention rate of an insurer is more than the competitive benchmark – it becomes the new yardstick.

    But the main question is – is it good enough?

    Customers can visualize the thinning engagement margin of financial services. They demand a similar experience while making a bank transaction, shopping on an e-commerce platform, or buying an insurance policy.

    When your customers are becoming more demanding and focused on e-transactions, it means they want everything done in a few clicks.

    Considering the implications of the modern-day scenario, insurance companies must use innovative ways to achieve success. One such approach is through insurance referrals.

    What is an insurance referral?

    An insurance referral is just like a customer referral – involving your existing customer to endorse your insurance policy to a prospective client.

    The prospective client may or may not be interested in purchasing insurance from you – based on the benefits you provide.

    How does an insurance referral work?

    When you create great experiences for your customers, they are bound to share their views with friends and family. It creates positive value for your company, allowing you to get more customers.

    However, it’s not always so simple.

    Sometimes even with a fantastic service and delighted customers, you have to use innovative approaches to motivate your current customers to give you referrals.

    Effectiveness of Customer Referrals for Insurance Companies

    Referrals are one of the best ways to gain business in a sales-driven market.

    Here are the reasons that make it a highly effective method for insurance companies:

    • Referrals incorporate word-of-mouth reviews, which is a cost-effective method of increasing your bandwidth. A positive review from an existing customer can work better than any other kind of promotion.
    • Referrals can have a conversion rate of up to 30%, which means out of the ten individuals your existing customers refer to, three will go on to become your actual customers.
    • Referrals can also allow you to introduce multi-line policies, which will bring more income and value to your insurance agency.
    • When coupled up with fantastic customer experience, referrals can strengthen your relationship with your existing customers.

    Various Types of Insurance Companies

    Insurance companies have a lot of diversity depending upon the market they serve; it broadly includes two main categories: life insurance and general insurance.

    Life insurance is a type of contract that provides financial compensation in the case of death or disability. Some policies also offer monetary compensation after retirement in the form of a pension for a specific time.

    It includes term life insurance, money-back policy, unit-linked insurance plan, and pension plans.

    General insurance is a contract that provides financial compensation in case of a loss other than death. It includes financial loss due to liabilities related to your house, vehicle, health, travel, and more.

    In case of damage to your house, vehicle, or your health – the insurance company pays you a sum assured to cover the damages.

    The most common types of general insurance include motor insurances, home insurance, health insurance, and fire insurance.

    6 Key Methods to Drive Customer Referrals for Insurance Companies

    A customer referral can be one of the most effective ways to secure leads for your insurance company. Referred customers can be friends, family, or even neighbors of your existing customers.

    Even though we know the potential of referrals, getting the maximum out of this opportunity is the main problem.

    To cut the noise, here are the six best methods you can use to drive insurance referrals.

    Understand before you engage

    Customer engagement in insurance can’t start without answering the questions of your customers. The primary step is to understand the requirements of your prospective clients.

    Apart from traditional segmentation that includes demographic dimensions like age, income, employment, and location, you need more information to fully understand your customers’ needs.

    Here are the considerations to have a better idea of customer requirements for your insurance company:

    • Create a map of your customer journey or lifecycle
    • Re-establish connections when a customer abandons your services
    • Provide customer-centric services based on the specific demands of your policyholders
    • Measure effectiveness before and after each sale
    Create true customer personas

    As discussed previously, generic segmentation will only deliver generic results. Ergo, creating value journeys or customer personas is quintessential.

    An accurate persona of all your policyholders will reflect their age, location, goals, social behavior, and emotions. It will help you deliver contextualized products.

    Here are some important considerations to create compelling buyer personas:

    • Never assume you thoroughly know your target audience. Even if you have enough information, you will still need to discover insights and patterns to provide individual-specific experiences.
    • Update your information regularly to achieve the best results
    • The customer journey map should begin with a prospective customer showing interest up to the sale’s closure.
    The business card technique

    It’s a primary marketing practice to give your business card to every professional contact you meet. Generally, business cards include your name, basic contact information, and company branding.

    You can also use your business card for a referral. It will show your willingness to help others, while the recipients will feel you’re confident about your abilities and expertise.

    To make yourself more memorable, you can also use your photograph on your business card. Within a large stack of business cards, your face will be more recognizable than a name.

    Integrate intelligence with Customer Engagement in Insurance Industry

    Within the digital engagement world, you need to have an optimized customer engagement plan, specifically made for insurance companies, by incorporating various tools to help your agents engage with the customers on a real-time basis.

    To understand your customers’ motivation and buying behavior, you can utilize a customer intelligence platform to analyze their spending habits based on different demographics.

    Using a reliable tool for collecting customer data, you can use AI algorithms to understand a particular group of customers’ motivation and use this knowledge to drive a higher return-on-investment.

    The source of customer data can be online interactions, browsing histories, or other touchpoints. You can also gather data from external sources, such as:

    • Personal demographics, including age, income level, debt level, and more
    • Geographic demographics including location within a rural/urban or metropolitan area
    • Attitudinal data including survey results, user reviews, and more
    • Situational customer data including time of engagement, device type, and more
    Marketing in the digital world

    If you’re still using traditional marketing methods, you won’t get much traction in today’s tech-savvy world. Insurance companies should consider digital marketing elements to connect with their prospective customers through mobile, social media, and other channels.

    By integrating digital marketing activities into the customer lifecycle, you can streamline your efforts to get more customer referrals.

    Customer reach > PPC, SEO, Content marketing

    Customer engagement > Loyalty programs, Offers, Marketing automation

    Conversion > Remarketing, Personalization, CRO

    Measuring the success

    The best way to determine if your marketing efforts are creating conversions is to measure customer satisfaction levels. Here are the three key performance indicators you must evaluate:

    • Net Promoter Score

    It includes measuring the number of customers who would recommend your brand to others. By using a dedicated customer referral schemes, you can drive your NPS score.

    • Overall Satisfaction Index

    It can be in the form of percentile, points, or index-based rating. By comparing the values to earlier periods, you can interpret if your customer referral program is working effectively or not.

    • Brand Equity

    It involves comparing your performance against your competitors. For instance, if your brand equity score has increased from 65% to 80%, it shows more people are now aware of your services.

    How NextBee helps in customer referrals for insurance companies

    NextBee is a leader in providing specialized customer referral services with a proven track record of being a successful customer engagement platform.

    Our expertise has helped top brands to get success from personalized customer referral programs. NextBee’s customer referral software uses a dynamic rewards system based on machine learning to deliver a unique customer experience.

    Takeaway

    The most effective way to promote your insurance services depends on what channels your audience is using.

    Ergo, your company must use multiple channels and cross-promotion to maximize the reach. The more cohesive and consistent your messaging is, the more customer engagement you can expect.

Align Your Company, Your Teams, And Your Individual Employees To Foster A Company Culture Rooted In Success.


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