Your best source of new business will always be your clients. They can provide referrals that are hotter than any other kind of lead.

This is true for any kind of business, but especially accounting firms. Accountants perform a key function for the success of a business. Poor accounting could lead to bad business decisions and exposure to unnecessary tax liability. Plus, accountants deal with sensitive data that requires a relationship with a foundation of trust.

Yet many accounting firms don’t take referral sourcing seriously. They buy radio time, speak at events, and buy Facebook ads, but they don’t get aggressive with the least expensive and most effective type of marketing.

According to a study by Social Media Today, 78% of marketers say referral programs generate good or excellent leads, 60% say referral programs generate a high volume of leads, and 54% say referral programs have a lower cost-per-lead than other channels.

Why are referrals so valuable? Because they come from a place of trust. Referred clients come to you with a little bit of trust in the bank already, because they trust the word of whomever referred them. That puts you at a significant advantage over your competition.

Furthermore, a good referral collection plan scales well. Good clients who love your service beget more good clients who love your service. All at no cost.

In this article, we’d like to talk about referrals: how you can get more of them and what you should do with them. We recommend incorporating this advice into the foundation of your marketing plan.

Your best source of new business will always be your clients. They can provide referrals that are hotter than any other kind of lead. Click To Tweet

Focus on the Customer Experience

Client referrals

The first part of growing your referrals is to improve your referrability. That is, you need to mold yourself into the kind of firm that your clients want to refer to others.

How do you boost referrability? By focusing on the customer experience and making yourself worthy of referrals. This is absolutely critical to getting more referrals.

The customer experience is the total interaction your customers have with your firm. It includes everything: onboarding, document transfer, communication, and – most importantly – your work product. A client who has a good experience is more likely to refer you to their friends.

For instance, sharing files is often an arduous part of the firm-client relationship. Security is critical, of course, but that’s usually addressed by giving clients access to a client portal. However, these portals are painful to use.

We created ImagineShare to solve this issue and smooth out the client experience. With ImagineShare, clients just click a link to access their files using a secret answer (not a complex password they only use once a year). This customer-centric approach to file sharing is secure and encrypted, but easy.

Map the total customer experience and ask yourself where clients experience friction. Then find ways to eliminate those obstacles so the experience is simple, intuitive, and easy.

Clarify Your Ideal Referral Sources

Before you begin soliciting referrals aggressively, identify your best referral sources. This will tell you where to put the majority of your effort. What makes a great referral source?

  • Someone who was helped tremendously by your service.
  • Someone who raves about you often.
  • Someone who knows lots of potential clients that you can help.
  • Someone who knows clients who need more than just tax help.
  • Someone who can lead to more referrals.

If you find a client who meets all of those qualifications, you may want to be a little more assertive about collecting referrals. For instance, you might offer them some kind of compensation for their help.

Request Referrals from Your Clients

Once you’ve maximized referrability (which, honestly, is an ongoing process and always something you can improve on), your next step is to deliberately request referrals.

Interestingly, this is where a lot of firms fail. They hope and pray for referrals, but don’t prompt their clients to help. Many of your existing clients are happy to provide referrals, but they won’t think about it on their own. You have to ask.

Fortunately, this isn’t complicated. It’s all about timing. Ask for referrals a few days after submitting their taxes (or other accounting service). Give them some time to see your work, then ask if they know of anyone who would enjoy your service.

The precise “referral flow” is up to you. Some firms like to encourage their clients to refer and leave the ball in their court. They hope the client will reach out to their friends and have the referred party contact you. This is low-pressure for the client, but you don’t have any way to coax the potential client.

An alternative is to ask the client to provide you with the names and contact information of anyone who could use your service. Then you reach out to the potential client and – in the first few moments – let them know that you’re calling based on a referral. Something like this:

“Hey Mr. Hanson, my name is Dan with Westbrook Accounting Services. Your friend Mike at Alpine Motors told me to give you a call. He said you could use some tax help.”

Develop Strategic Referral Partners

Client referrals

A referral partner is an ongoing relationship with another professional who trades referrals with you. This partner should be in a different industry to give you access to a wider pool of potential clients.

For instance, you might develop a partnership with a tax attorney. After helping his clients, he can send them to you for ongoing accounting support. In exchange, you can send any clients who need legal help to him. There’s enough overlap here so you share clients, but don’t compete. Other professionals could make good referral partners as well:

  • Bankers
  • Investment managers
  • Insurance agents
  • Realtors

Don’t overlook other accounting professionals as long as you don’t infringe on each other’s services. For instance, a bookkeeper who doesn’t prepare taxes could refer to a tax preparer who doesn’t offer bookkeeping services.

Furthermore, reach out to local business organizations, like your Chamber of Commerce, Small Business Development Center, SCORE and others. These organizations need businesses like yourself on file to recommend to their members. (But you may need to cultivate an ongoing relationship with these organizations to get those referrals.)

Process Your Referrals

Before you start blasting out emails begging for referrals, it’s important to put a simple system in place to track and follow up. Failing to document your work will put you in a position where you fail to ask all of your clients, ask the same clients too often, or a mixture of both.

Add a few columns to your client database (CRM, spreadsheet, or whatever you use) to track referrals. Document your first request, their response or lack thereof, any follow ups, and the final result including who they referred you to.

When you gain a new client based on a referral, it’s critical that you thank the referrer. Send a personalized thank you note at the very least, but it’s smart to offer something tangible as a gesture of thanks, such as a small gift basket or gift card.

If you approach a prospect due to a referral and they decline your services, you’ll still want to send a thank you to the referrer. Explain why the prospect didn’t work out. This helps the referrer understand what kinds of referrals are right for you.

Your Clients are Your Best Assets

Think of your clients like assets. You’ve nurtured their businesses and (hopefully) added value to their lives. Use those assets as part of your marketing by deliberately and assertively asking for referrals. They might say no, and that’s okay, but it will never hurt (as long you’re polite and respectful) and it could be the key to serious growth.