AAA Northern California, Nevada & Utah Division Drives Higher Premiums with Referrals
AAA Northern California, Nevada and Utah (AAA NCNU) has long been a household name. Throughout transition of horse and buggy to car and driver, AAA NCNU has been dedicated to providing safety for people on the road — always advocating for the driver. That dedication to service underpins the road service and insurance we know today.
Its long-standing reputation as a reliable insurance provider has helped AAA NCNU to not only build insurance agent advocates, but customer advocates as well. Happy agents and happy customers mean good business, so one of the main focus areas for AAA NCNU is the relationship between its agents and its insured customers.
Internal research done by AAA NCNU has proven that those relationships translate into customer advocates who are willing to refer — and the friends and family they refer tend to be very loyal. Seeing a potential to leverage the agent/customer relationship to drive new customer acquisition, AAA NCNU was looking to add a referral component to its marketing mix and reward their customers for referring their friends and family.
“We have been blown away by the agent adoption of our referral program. The +95% adoption rate has remained consistent, allowing us to shift focus and set new goals tied to program performance." — Cynthia Jow, AAA NCNU Operations
A unified referral program approach
Cynthia Jow, who supports Operations for AAA NCNU, took a unified approached to building a referral program. As the liaison between agents and the AAA NCNU marketing team, she helped shape both internal and external communications and put realistic metrics in place. With both the agents and new customer acquisition in mind, AAA NCNU made agent adoption its initial primary success metric. If its agents were willing to participate and trust in the program, they knew they could get their customers to refer new customers. Hoping to see about a third of its agents participate, AAA NCNU was soon overachieving its internal goals by seeing over a 95% adoption rate.
"The referral channel is definitely one of our most valuable channels.”
Referrals work for AAA NCNU because its agents believe in it. Agents can see, in real time, that the referral program process flow is working. They know how many of their customers are referring their friends at any given time, giving the agents a sense of satisfaction. The process is credible, consistent, and dependable.
New insurance customers acquired through referrals have NPS scores averaging 15 points higher than all other acquisition channels (walk in, Internet, personal networking, etc.). “For AAA NCNU, a referral to a friend is one of the highest compliments we can receive,” explained Jow. “And, through our NPS reports, we can see that these referrals are happening, and that they are driving new business for us. New business that is averaging a 20% higher premium per policy, as compared to other acquisition channels.”