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Do you 'throw away' too many referrals?

Do you 'throw away' too many referrals?

By Gil Simonds, CPCU

How about this story?  Has this ever happened to you?
 
A producer I was working with was ecstatic one hot summer day because he had just obtained 10 referrals from a client.  I was excited too and the producer was going to begin working those new referrals right away.
 
Well, in tracking the success of those 10 referrals, only one got written.  Is that good or just normal?  Let’s just say, both of us felt it should have been better.  So, analyzing what took place led to the following results:
• 2 were not reachable; the producer never connected with the decision-maker.
• 2 were messy businesses that the producer realized would be declined if submitted
• 3 had strong to severe loss issues
• 1 failed to provide all the needed information
• 1 was presented, but not sold
• 1 was sold
 
Could this one out of 10 scenario have been prevented?  That is what we took it upon ourselves to evaluate.  The first evaluation made was really there were only three the producer was either able to, or wanted to, quote.  So, of that group, he was really one for three.
 
But, what about the rest of the referrals – the ones not quoted?  Preventable?  In our analysis, many of those were preventable so that you wouldn’t end up with 70 percent being “thrown away.”
 
The two that the producer was unable to reach were determined to be a problem based on the “introduction” he got from his client to those two prospects. (Note: You do ask to be introduced, don’t you, when you obtain a referral?)  The person calling their customer (our prospect) from the business was not someone known to them and thus, the call carried little weight.  It was not a powerful introduction; it wasn’t even a lukewarm introduction, so it was not surprising the producer couldn’t get an appointment following that call.
 
The five that were either messy businesses or had heavy losses weren’t quality businesses.  Was that the luck of the draw and he just accepted that when he asked for referrals, or could those “throw-aways” have been prevented as well? 
 
What went wrong?  Bottom-line, he could have done some things a lot better at the time he asked for the referrals.  Things, I call “guiding” to get the best referral, so you throw as few away as possible.
 
Ideally, what we want are referrals that are: 1) in the right class, 2) of the right size, and 3) of the best quality.  So, how do you ask to accomplish all that?
 
I encourage producers to use what I call the “Ideal Prospect Definition” sandwich.
• The Top Slice of Bread describes the quality we want
• The Meat of the Sandwich is the Class we are seeking
• The Bottom Slice of Bread describes the size parameters
 
Asking for the right class is the easiest part, and often, size is manageable too, but the example given in the story explained that five of the 10 referrals that producer got had to be thrown away because he obtained referrals of poor quality.  How do we deal with the quality of the referral?  By really guiding, that’s how.
 
Let me give you an example using the “Ideal Prospect Definition” sandwich from above:
• Who is a “Growing, Profitable, Well Run, Well-Managed” (“standard” to get quality)
• Electrical Contractor (put the class or industry type in the middle as your “meat”)
• With five or more vehicles (specific criteria by class to get the right size at the end)
 
When you ask this way, and really guide…and get the introduction from your referral source, you will limit your “throw-aways”.  Referrals are too precious to bear the weight of many “casualties”, so use the Sandwich concept to limit them.  Further, you can also bring a list to show to your source that has screened this down so that you know you have the right size, the right class and perhaps, the good credit leading to a quality referral.
 
My personal belief is that better run businesses, ones that are profitable and growing, and are well-run and well-managed, will have fewer loss and credit issues common with other types of “throw-aways”.  Work to prevent those things from happening – YOUR time is too precious to throw many back.
 
 
Gil Simonds of Total Management Resources is a Sales & Management Coach/Specialist to insurance agencies.  He can be reached at 404-250-9007 or agencyconsult@yahoo.com.

Iroquois 201

(2:27) - This video will give you more details about the Iroquois Group. It will also explain how an independent insurance agent can grow due to our marketing expertise and profit sharing.