by Russell Hutchinson
They don’t trust you. Fundamentally, if you know a referrer has clients, and that they have a relevant need for insurance, then there is a lack of trust. This happens a lot. They nod, say yes, take a small stack of business cards, and you will never hear from them again unless you chase them or their boss forces them to call. They won’t refer because their fear that you will stuff up their client relationship is greater than their desire to gain. They may not say that they don’t trust you, but they don’t.
This usually comes from a cultural mismatch, you might call it ‘advice style’, or just a ‘different approach’. Perhaps they diligently work business around four or five providers and find the best match, whereas you place 95% of your business with one company. Perhaps they are very casual whereas you are very corporate. Perhaps they are price-focused, where you are focused on the best quality solution. You need to spend more time finding out about their advice personality and ensuring that the service you offer matches – or move on and find a better match in referrer.
The feeling that this is all ‘one way traffic’ is another big contributor to trust issues. Perhaps you have come to them with a gainsharing approach to the referral (more on that below) but they are more interested in getting new clients themselves. If you are starting out, this is hard, but there is no better foundation for a referral relationship than mutual referrals, and there is no better way of showing a potential partner that you mean business than by starting with a good quality referral from you to them.
Focusing only on the money. A real-estate agent who makes $15,000 and upwards per sale will not endanger even one for a $200 referral fee. Perhaps they can quote the law on hidden commissions from memory and you didn’t think about how that would be disclosed.
On the other hand a referrer who believes that ensuring young families don’t lose their home because of disability, illness, or redundancy is a worthy goal in itself will refer without caring about the money. Unless you are guilty of the opposite problem of not talking about the money: in this case they may be motivated by the money, and having just read about insurance commissions they may be well aware that there is revenue to be had by making the referral.
They may be completely happy with the required disclosure – and will be disappointed if you do not make some offer. You need to professionally focus on the benefit to the client first and foremost, and ensure referral fees are also a fair recognition and compensation for the referral.
Lack of practice. To make a referral you need to know what the right words are and at what time in their advice process they should be spoken. If you don’t know them and they don’t know them then no referrals will occur. To learn you can ask them about their process, sit with them and observe, and work on your process.
Of course, when you get them working well, professional referrals are a great marketing tool.
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