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7 Biggest Mistakes Accountants Make When Asking for Referrals

Sep 7th 2017
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Everyone wants their practice to grow, but this often involves marketing which is a long-term strategy that costs money. 

McDonalds spent $1.46 billion in advertising in 2016. Their aim was to get individuals into one of their 14,000 US stores, then spend an average of $4.72 per person. 

Bottom line: Seeking referrals from current clients is a lot cheaper. But how do you do that without making some serious mistakes?

7 Biggest Mistakes

1. Clients know, so I don’t need to ask -- Accountants are considered members of the professional classes and soliciting referrals is often seen as a sign of desperation, because business isn’t doing that well.  They rationalize clients know you do a fine job.  If they come across someone needing a similar service, they will volunteer my name.  This way, I’m accepting clients if they come to me, but not lowering myself to actually asking.

Better:  Politely ask.  Everyone should have the opportunity to say no.

2. Assuming clients know what you do for them – You and your client have a great relationship.  You understand their specific industry. You keep current on regulations and trends.  You remind them to top up their retirement accounts. You’ve discussed succession planning.  However, from the client’s point of view:  “She does my taxes.”  Put another way, it’s amazing the amount of work it takes to make something looks effortless.  (Watch pro golf or the Olympics.)

Better:  Make it a point to remind every client what you do for them.  Adding in additional details about services they might use is a good idea too.

3. Assuming you are closed to new clients – You always tell your clients how busy you are this tax season. The long nights and no vacation time leading to April 15th are a cliché.  Your good client may have another good client in mind, but they may think you have all the business you can handle. They will find another accountant who doesn’t seem as busy and refer them elsewhere.

Better: The easiest way to explain you are adding new clients is to share anonymous, anecdotal stories when friends of clients ask:  “How’s business?”

4. The Sledgehammer Approach – Here’s the trick with referrals:  You can’t use the word “Referrals.” It’s industry slang that doesn’t convey benefits to motivate your client.  “You haven’t sent me any referrals lately.” Your client feels in addition to paying you money (and the government, but that’s not your fault) now you want a soft payment too.  That’s wrong.

Better:  Clients ask questions all the time. The technique is answering their question, then offering to help others with the same issue. Two timeless approaches to tactfully asking for referrals are:  “Is there anyone else I can help?”  Also, “Do you have any friends who would also like to learn about this topic?”

5. Being too vague – The opposite of the “Sledgehammer” is being so vague the client has no idea what you are asking.  If you ask: “Who do you know that might be interested in…” (Without the specifics listed above) their mind often goes blank.

Better: Be as specific as possible: “Congratulations of starting your business. Who else do you know at your business incubator that’s also in the early stages?” That gets them thinking.

6. Social media is the new normal – People will avoid looking someone in the eyes and asking for money. Years ago, if you ran a race for charity, you needed to sign up contributors one at a time.  Then came e-mail, followed by the social media. It lost the 1:1 appeal of being part of their success. Compare your sign up rate when you approached contributors, form in hand vs. sending a blast e-mail. It’s a lot easier to ignore a person anonymously.

Better: Referrals work the same way. You need to sit across from the person as equals, thank them for their business, recap what you do for them and ask who else they know needing similar services.

7. Not making it easy – This is so 1990’s, yet James Bond still used it in the “Quantum of Solace” (4) when he handed over a business card to get a message to someone being held against their will.  (OK, the card did lots of other stuff too.)  When you ask a client to refer someone, they need something they can put into the prospect’s hand to complete the task.

Better:  Its old school, but business cards still work well. 10 billion business cards are printed annually in the US. Even Silicon Valley types exchange them.  According to Quota, they are also considered one of the most inexpensive ways to gain customers.

The easiest ways to encourage clients to refer business is letting them know you are open to getting them and making it easy.

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