How to get referrals and grow your firm
By Natasha Closs, Director of ProfitCents Consulting & Advisory Services
An ongoing challenge for accountants and other financial services professionals is attracting new clients. In fact, bringing in new clients is at or near the top of the list of challenges facing accounting firms of all sizes, and it’s a top priority among specialists, such as forensic and valuation accountants, as well.
One effective way for professionals to gain new clients is to receive referrals. When I think of referrals, I think of times I have asked friends or family members for advice on someone they have used for medical care or to fix a car. Many professionals also probably think of getting referrals in this way: A current or former client recommends your firm to a prospect because they had a positive personal experience with the firm.
But Hinge, a branding and marketing firm, has some interesting research that highlights the importance of expanding how you think about and generate referrals. Hinge surveyed more than 500 professional services firms (in accounting and finance, technology, marketing and other industries), asking about the types of referrals they received and the types of referrals they gave to other firms.
More than 8 of every 10 service providers surveyed by Hinge had received a referral from someone who had never been a client. In other words, most service providers got referrals from non-clients. How did that happen? How and why did the non-client recommend someone they’d never used?
To find out, Hinge asked people who had provided referrals without direct experience how they knew about the firms they referred. Only 5.5 percent of the referrers reported even knowing the person they were recommending. Instead, most of these “non-experience” referrals were one of two types:
1. Referrals based on the perceived expertise of the service provider.
2. Referrals based on the reputation of the service provider.
Think about your own experiences with medical care, child care or legal services. Have you ever recommended that someone check out a particular service provider because you were aware that they specialized in the problem requiring assistance? Chances are, you have.
“Specialized expertise is a powerful basis for referrals,” Hinge says in its report. “If someone is aware that you specialize in a given problem, they may recommend you to someone with that specific challenge — even if they lack detailed knowledge of your reputation.”
Becoming recognized as an expert isn’t something that happens overnight, but Hinge outlined the most common motivations that its survey respondents gave for making an expertise-based referral. Some sources of expertise-based referrals include (most popular sources in bold):
– Finding the expert in online searches
– Reading about the expert in online reviews
– Reading a book, blog post or article written by the service provider
– Hearing the service provider speak
– Interacting with the service provider on social media
– Noticing an impressive website.
Another major source of referrals among respondents who had no experience with the service provider or didn’t know the provider was a referral based on a service provider’s reputation, according to the Hinge research. Reputation-based referrals may sound similar to the experience-based referrals, but they imply a slightly different source: People make the recommendation because of the service provider’s good standing in the industry or community. Experts may be known but not recommended if they have a poor reputation. Hinge’s survey found that 46.4 percent of the “non-experience” referrals were made based on a reputation.
“Perhaps they know someone who has worked with you, or have heard your firm referenced in conversation,” Hinge says. “A general perception of quality and the word of friends or colleagues both carry a great deal of weight. Both sources may be encouraged through sustained marketing efforts.”
What are some takeaways from this research that can help professionals expand an accounting or valuation practice?
1. Make sure your online presence is top-notch. Previous research has found that more than 80 percent of buyers look at a firm’s website before buying, and if a prospect cannot tell that you provide business valuations or can help with succession issues or ESOPs, they will probably move on to a firm that confirms it does.
2. Share your knowledge! Every time you provide “free” advice or thought leadership in a speech, an article or a blog post, you’re demonstrating that you know your subject and want to help clients and prospects alike.
3. Protect your reputation, and as much as possible, define it. Be clear and honest in your online activities, spelling out what makes you different in both expertise and service. Remember, however, that using generalities such as “our customers take top priority” can often fall short of convincing prospects, especially when many other firms say the same thing. Use customer testimonials or share specifically how the firm demonstrates customer service (e.g., “We answer weekend calls”).
It can be especially tough to attract the kind of client everybody seeks: Someone who is open to advice, pays promptly and who is willing to work with you as a partner in growing their business or capturing its full value. Accountants and others who provide valuation services, however, have more control than they imagine over obtaining referrals for these prospects.
To learn more about winning new clients and overcoming other challenges, download the free eBook, Overcome top pain points for accountants.