Whether you are an insurance agent or you are a professional working in any other industry, referral business is one of the best compliments you can receive from your clients. It says that they trust you not only to put your professional expertise to work for them, but they also want you to help their family and friends as well.

Because a potential new client has been sent to you by a family member or friend, they are much more likely to do business with you. After all, don't we all want to deal with an insurance agent who will ultimately just take really good care of us?

Some clients will send you a referral without even thinking about it. Other clients can be asked for a referral. Either way, it is important for you to reward this ?good behavior? when it occurs so that you encourage more of it to continue.

Here are some tips for growing a referral business pipeline in your agency.

1. Adopt a consistent process for rewarding the referring party. After the referral comes in and the new business is written, create a consistent process that makes sure acknowledgement of the referring party occurs. The last thing you want to do is let this referral go unnoticed! Be sure to make your agency staff aware of the referral rewarding process as well so that you don't have a referral slip through the cracks.

2. Decide how you are going to reward people when they send you a referral. It could be something as simple as a handwritten thank-you note. Or, it could be a small token of appreciation such as a gift card from a coffee shop.

3. Keep it legal! Because state laws vary, make sure that you are acting within the limits of your state. Some states say that you cannot give more than $25 of value per year to a client. Be sure to find out what the law dictates for your state.

4. Be consistent. It will be easier to keep up with your referral reward program if you do it the same way every time. This also makes it easier to purchase several units of referral rewards in advance. For example, if you are going to give away $10 gift cards from a coffee shop, purchase 10 at a time and keep them on hand. Buying in bulk may even make it possible to get a discount in some cases.

5. Let them know they can send you their family and friends. After all, your clients aren't mind readers. Consistently let them know that you want to help anyone that they send your way. It can be a P.S. at the end of a letter that you send out or it could be a referral link that you include in an email marketing campaign to your clients each month that makes it easy for your clients to send you a referral.

In the end, clients that receive your thanks and praise for sending you their friends and family will become more likely to repeat their referral efforts. It is a winning proposition for you, the agent because the alternative means of acquiring new customers can be significantly more expensive.

Using a referral incentive program can end up serving as a win/win situation for everyone involved. You get new clients. Plus, your clients think you are great because you take care of them along with their friends and family.