Launching a referral program for business insurance is a pain in the ass. We did it anyway.

Today, we invited a few thousand of our most loyal customers to our newly launched customer referral program. So what? Most modern companies already have referral programs. Is this really deserving of a blog post? But, what we learned is that building a referral program in this field of insurance regulatory landmines is no small feat.

Finding the least common denominator

The insurance industry today is a layered cake of regulatory updates amassed over decades, and in service of protecting the customer and establishing guidelines for the broker/customer relationship.

The intent is valid—there’s a lot of money and a business’s reputation on the line. It makes sense that only trained and licensed professionals should be accountable for the recommendation and selling of insurance products.

The challenge for a customer referral program in this industry, though, is that the regulations cover a number of similar topics like solicitation, discounts, and incentives. And, these regulations vary state by state and have not been as dynamic as an internet-driven world like ours really demands.

To build Thimble’s customer referral program, we had to pore through each state’s regulations which cover everything from who could and could not be paid, how much could be paid, the timeframe over which limits applied, or even whether you could do this at all.

We built various models and spreadsheets for looking at all these regulations with the goal of finding the least common denominator that would apply the largest number of customers across the US.

Refer a business owner. Get a $10 gift card.

Our goal was to build a program that was simple and easy to understand, and we think we’ve done that. Our effort to find the least common denominator across states resulted in the solution to offer a $10 gift card to a referrer, not the person being referred (the “refer-ee”) when the referee becomes an active Thimble user.

Many states don’t allow you to provide cash, so we stopped thinking of using Stripe or another service to do an ACH payment into your bank account. Instead, we’ve partnered with Tremendous who can fulfill a variety of digital payouts ranging from Visa Cards to gift cards across some of the best retailers in the country. Integrating with their platform was a walk in the park.

Gift cards powered by insurance coverage

We’ve limited it to $50 total per calendar year per user because many states have upper limits of how much you can provide a referrer in a given timeframe. We’d love to give out more, but this felt like a good balance.

We can’t pay the referee because that is seen as a discount towards the purchasing of insurance, in which case our intent could be seen as an inducement to purchase what might not be the right insurance for someone. Again, while we’d love to pay new business owners who choose Thimble, at the moment we simply can’t due to regulatory constraints.

We’ve launched in 25 states and are working hard to unlock the remaining 25 whose processes are more difficult or unclear.

Uniquely Thimble

There are two reasons why we felt really strongly about creating a referral program:

1. Customers love us and were recommending us.

Being a startup, we’ve been hyper-focused on collecting and monitoring our customer feedback. Last year, we interviewed over 300 Thimble customers, revamped our entire customer review platform, and we track our NPS (Net Promoter Score) weekly.

Our customers seem to really love what we’re doing and are very vocal about it. We have an “Excellent” rating on TrustPilot, a 4.8-star review on the App Store, and an NPS score of 82!

Obviously, this is good business, but if our business owners are already telling their network about their Thimble experience we might as well reward them for doing so.

2. A referral bonus goes a long way when you sell insurance at this price.

To give $10 back on homeowner’s insurance wouldn’t make a big impact. In fact, giving $10 back on a traditional annual business insurance policy doesn’t make much sense either. However, when you’re the only company that offers General Liability insurance for as little as $5 an hour, ten bucks goes a long way.

Even if you’re not in insurance industry, I hope this post was helpful. Our customer referral program doesn’t recreate the wheel, but it definitely was a challenge designing one intended to go down the cobblestone path of our industry. It’s clear though that even in 2020, “internet companies” are only scratching the surface of some of the most regulated and complex industries.

And, if you’re a Thimble customer and you’ve read this far, we truly appreciate it. Hopefully, you have access to the referral program by now and choose to share Thimble with a fellow owner like yourself.