As an agent you can spend countless hours investigating leads and thousands of dollars in advertising in your attempt to acquire new business. But wearing yourself thin in sales could still yield growth at a snail’s pace.

An affinity for sales is an important characteristic of an insurance agent, no doubt. Yet real growth requires implementing efficient processes that target the reasons why people buy. Doing so indicates a shift from sales to full-fledged marketing.

So what do I mean by marketing? Basically it is identifying what goes through your customers’ heads before they purchase insurance. It is using a bit of psychology and abstract thinking to better target your customers. It is also implementing an organized strategy that focuses on why and how your customers make their buying decisions.

Naturally every industry varies. Different in how customers learn about products or services, the amount of time they are in the market, and what triggers a need. Formally this cycle is called the buyer decision process.

The buyer decision process

The driving force behind purchasing a product or service changes – but research has been able to identify significant trends in different industries. And it turns out that the insurance market is overwhelmingly referral-centric.

This means that the decision behind purchasing insurance is greatly influenced by personal recommendations. Below is a diagram we created at Rocket Referrals which explains the buyer decision process for people in the market for insurance. It will provide insight into how and when referrals are made for insurance products and services.

Need for coverage

There are generally three categories that prompt the need for an insurance policy.

• Existing customers that require additional coverage (such as purchasing a second car)
• Prospects new to the market for insurance (new home or business owners)
• Prospects defecting from their current insurance provider

For each of the reasons listed above the window of opportunity to reach a prospect is generally small. Insurance is one of those products that you don’t generally want to wait on. For this reason you want to make sure that you reach them at the right time – when they are shopping for a new policy.

It is impossible to always be in front of all prospects. Therefore enabling existing customers as active promoters will greatly enhance your chances. After all, they are around their friends and family quite a bit.

Also, note that the decision to buy new insurance is often triggered by emotional reasons. A bad experience with their current provider is likely to inspire change. And when people are angry they tend to act quickly.

Search for insurance

This may be the internet age, but most people still rely on their friends and family for advice on how to spend their hard earned dollars. According to a 2014 report by the Hinge Research Institute, 87 percent of buyers turn to friends or colleagues first for recommendations in the insurance and financial services industry. Only about 1 out of every 10 shoppers start their research online.

Agents should know where your prospects are getting their information. With a vast majority of people leaning on their friends and family for suggestions about insurance it is important to develop a wide network of promoters. After all, research shows they are much more valuable than SEO – or any other marketing technique for that matter.

Evaluate agency

A referral does not necessarily guarantee a sale. After an agency is recommended to a prospect most do research online before pulling the trigger. It turns out that 81 percent of buyers ultimately judge a business based on an examination of its website. If the website is a dud, your hard-earned referral is stopped dead in its tracks.

Therefore as an agency your website must be up to snuff as to not turn off potential customers. It should contain enough information to guide them in their purchase decision and move them along the path to a sale.

Purchase decision

Kaboom. Your prospect has just been converted into a customer. This is where they make up their mind. But for an agent your job is far from over. It is now time to convert them into vocal advocates.

After the sale

This is when the agency does most of the work in promoting an effective referral strategy. Current customers are your best source of referrals and your closest connection to prospects. It is your job to enable them with information and put them in the referral mindset so they are able to identify and refer the right customers for your agency.

Advocates are extremely important because they are where 87 percent of prospects begin their search for insurance. The more customers an agency converts to advocates the more people will be pointed toward your agency. Therefore, find ways to increase your number of promoters and look for ways to make it easy for them to refer your agency to others.

In this industry it is paramount to consider how referrals impact new sales. As agents you have control over the buyer decision process by increasing the likelihood that your customers will reach out to prospects (their friends and family) and interact with them positively.