In one six year stretch, the All American Insurance Agency generated $715,362.85 in new home and or auto insurance premiums from existing client referrals.
And because they're in the insurance industry, that means a portion of that revenue was recurring.
By 2015, more than one third of the agency's overall revenue came from their referral program.
You may not be in the insurance industry, but that doesn't mean you can't learn and apply something from their systematized model.
Government regulations worked to their advantage
State regulations allowed the agency to give small gifts for referrals they received. However, these gifts needed to be given for all referrals – not just the ones which turned into new business for them.
So they got creative.
They developed a monthly random drawing for each month's referrals, and an end-of-the-year grand prize.
This provided them with more opportunities to talk about the referral program, and continuously get interest and participation from their customers, prospects, and others.
Elements of the referral program
1. Referral program flyers were the basis for the entire program and were included in every piece of outgoing mail.
2. The agency sent out a printed monthly newsletter which always included a full page with contest details and recognition of customers (including their photos) who had referred and won the previous month's contest.
3. All employees included details of the referral program in their signatures for all outgoing emails.
4. The agency sent a monthly email to customers and prospects announcing the monthly winner, and providing details for participating in the program for the next month.
5. An easy-to-share personalized referral link was provided to each person in the program so their referrals could be tracked and rewarded. (Here's a tool I like to use for this purpose.)
6. Fax cover sheets were used (this was the early 2000s, so faxes were still common) highlighting the referral rewards program.
7. Special referral-only postcards and letter campaigns were created.
8. Handwritten thank-you notes were sent immediately to people who made referrals. (You can use this service to automate sending thank-you notes.)
9. The entire staff was onboard with the program, and staff members were rewarded for their level of contribution to the success of the referral program.
Why did I share so much detail with you about this referral program?
Compared to advertising to a “cold” prospect, referrals are less expensive and easier to convert into customers. The campaign above had a closing ratio of 59.71%.
Most businesses think they have a referral program. But usually they are insufficient, ineffective, or inconsistent.
By showing you how this referral program was structured, I hope it will spark ideas for creating or improving your own program.