How to boost business through referrals
Accounting firms can implement a three-step strategy to increase their base through referrals.
November 4, 2013
Conventional wisdom holds that referrals are a key to building an accounting practice. And research proves that is true: Hinge’s 2013 study, How Buyers Buy: Accounting & Financial Services, found that a whopping 87% of clients turn to referrals first when looking for an accountant.
The same study also showed that 76% of accounting buyers are “very likely” to recommend their accounting firm to others. The discovery that the vast majority of accounting clients are happy to recommend their provider should be great news for the accounting profession. But how do you get these satisfied clients to take the next step, to become active referrers? Try using the following three-step strategy.
Probability that a buyer would recommend a seller
Likelihood that a buyer would recommend a seller,
on a scale of 1 to 10, with 10 being most likely
1. Promote your best clients.
Hinge found that 25% of accounting clients had never made a referral. When we asked these clients why they had not recommended their provider, 43% of respondents said, “I haven’t been asked.”
Reasons why clients have not made a referral
Accounting firms can solve this problem by putting top clients into a position where they will be asked about the firm. Creating a portfolio of previous client work is one option. Another is interviewing top clients for a case study and then highlighting that case study on the firm’s website.
[Editor’s note: Remember that the AICPA Code of Professional Conduct says firms can reveal names of clients without permission, but if disclosing the client name allows a third party to ascertain other facts that are confidential, that would be considered a disclosure and would require the client’s permission. And members should always check with their state board of accountancy to ensure that its rules are not more restrictive, in which case the member would need to comply with the more restrictive standard.]
Firms also can invite clients to participate in a conference, panel, or webinar. And don’t forget the basic step of simply asking top clients to be a reference.
Taking the time to promote your best clients has multiple benefits. These activities expand your relationship, often leading to new business opportunities with the client. And putting a top client in the spotlight also increases the chances that prospects will ask them about your services. Voilà, an experience-based referral has been born!
2. Communicate your specializations.
The pie chart in this article shows that the majority of respondents are split evenly between those who had not been asked for a referral and those who did not think they had enough experience or familiarity with a firm to make a recommendation.
Specialization increases the chances that both your prospects and your current clients are aware of your service offerings. Resist the urge to try to be everything to everyone—clients are often reluctant to make referrals for firms that feel too general. Rather, focus on what makes your firm different, such as an industry specialization. These characteristics help you stand out from the crowd and drive specialization-based referrals.
Sharing your client list (in compliance with the ethics restrictions mentioned above) is a good way to communicate your specialization and promote your top clients at the same time. Worried that other firms will poach their clients, many accountants keep their client lists under lock and key. But this natural tendency is a roadblock to business growth. Clients are often happy to oblige, as they can benefit from the free publicity.
By publishing a list of star clients on your website, the marketplace will start to understand what you do and what kind of client is the best fit for you. It also becomes easier for clients to make referrals because they understand the value you provide.
3. Make it easy for prospects and nonclients to make referrals.
How can prospects or nonclients make referrals if they don’t work with your firm? There are two answers to this question. First, nonclients can include those influencers who frequently work with your industry but who are not actually in it. These influencers include professionals such as bankers and attorneys who have worked with you on past deals. These types of influencers already are familiar with how you conduct business. The previously discussed tactics can be helpful in gaining referrals from these influencers.
The second answer lies in the large, but little-known, group of people who are happy to recommend a firm based on reputation alone, even if they have never worked with it before. This group can consist of prospective clients, influencers who know of your firm, and other accounting firms with a specialty different from yours. You can encourage these reputation-based referrals by expanding your pool of influence through a strategy called content marketing.
Content marketing is the practice of consistently sharing free, valuable information with your target audience. This content can take many forms, including blog posts, webinars, videos, books, ebooks, manuals, and guides. Accounting lends itself well to content marketing, as your audience will appreciate easy-to-understand updates on accounting standards, regulations, and best practices that will keep their business running smoothly. The rule of thumb for content marketing is that information must be easy to understand and valuable to the audience—and it must be free.
Bringing it all together
With 76% of accounting services buyers “very likely” to recommend their accounting provider, the accounting profession is well-positioned to capitalize on word-of-mouth growth. The trick is to create an environment where it is easy for others to sing your praises. By implementing this three-step strategy, you set the stage for referrals, turning both current clients and industry influencers into advocates for your firm.
Lee Frederiksen, Ph.D., is the managing partner at Hinge, a marketing and branding firm that specializes in the professional services industry.