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Tips on Choosing How and Where to Refer Business

Aug 4th 2017
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“Before you criticize a man, walk a mile in his shoes.” This Cherokee saying also applies in an unlikely setting:  The giving and receiving of referrals.

Most people agree referrals are the best source of new business. They came from a satisfied client who told your story or they have a problem that needs solving and are ready to take action. It’s all good.

Well, maybe not all good. The big drawback of building your practice through referrals is the difficulty in filling your pipeline.  Referrals are passive.  You can remind your clients what you do for them. You can also let them know you are accepting new clients, but you can’t push them because your clients will get annoyed. 

You are a professional, you aren’t desperate and ghe only way to increase the flow is to expand your universe:  Be sure every client knows how you help them.  You are willing to help their friends.

Put the Shoe on the Other Foot

You hope your client, faced with a friend who needs a new accountant because of divorce or relocation has your name top of mind when they ask:  “Know any good accountants?”  News flash:  They likely know a few, through Rotary, the Chamber and their religious organization.  Will your name top the list?

Now suppose you are asked for a referral, lots of professions come to mind. People need lawyers, psychiatrists, architects, marriage counselors, dentists and veterinarians. They also need services you might not classify in the same tier as yourself. They also need realtors, insurance agents, car dealers, financial advisors, plumbers and electricians.

You’ve been asked: “Who would you recommend?” in one of these categories.  You know several, but how would you narrow down the list?

  • Personal Experience – Have I personally done business with them?  Was I satisfied?
  • Value for Money – Did I think they were fairly priced?
  • Attitude – Did they treat me as a valued customer or did they act as if they were doing me a favor, taking my money?
  • Efficiency – Do they return calls, e-mails and texts quickly?  Do I need to chase after them?
  • Honesty – Do you trust this person or is it an arm’s length transaction?
  • Experience – Do they have required skills?

What about “sensory” traits?

  • Hard Worker – Are they seeking to grow their business or just cruising through life?
  • Serious – Do they put on their “game face” at work?
  • Putting Client’s First – Are they looking to see how much money they can make from each transaction or truly seeking to help?
  • In for the Long Term – Do they love their job and plan to do it forever?  Are they planning to sell the business?  Are they just starting out?  People want continuity.

Who would you choose? Consider three scenarios:

Scenario One: A friend is planning an addition to their home. They need a contractor. You know several through your activities in the community, however you haven’t remodeled you kitchen or bathrooms recently.

Candidate One:  Through your chamber activities you know a guy who volunteers at Habitat for Humanity building houses.  He has renovated your neighbor’s kitchen.  They seem happy.  His children and yours play school sports.

Candidate Two:  This firm has been in business for 35 years.  It’s a family firm, passed father to son.  They specialize in home additions.  They don’t do commercial work.  They advertise in the Church bulletin.

Candidate Three:  This fellow joined the chamber and various other organizations, but never attends meetings.   His litmus test for contributing to local charities is “Will I get a display ad in the event program?”  He doesn’t see the need for permit applications.

It’s highly likely your client would refer Candidate One or Two.  They give back to the community, have longevity and an overall good reputation.

Scenario Two: A friend needs a financial advisor.  They inherited a substantial portfolio of securities.  Real estate will be sold, bringing additional money.  You have a financial advisor.

Candidate One:  They have twenty years of experience with the same firm.  They are a poker buddy, where you have sized them up as a risk taker. They constantly complain about their firm and how compensation packages are getting smaller and smaller.  They don’t actively look for new clients.

Candidate Two: They also have twenty years of experience, spread across five firms where they stayed an average of four years at each.  They aggressively look for new clients, often bringing up the market at dinner parties.  They drive an exotic car and appear to live beyond their means.

Candidate Three:  They have less experience, but appear to live at the office.  They play golf with clients on the weekends.  They take continuing education classes to earn additional professional certifications.  They are patient.

Your client would likely volunteer the name of Candidate Three.

Scenario Three: Now it’s your friend’s turn to be approached.  She is a client of yours.  You prepare her personal and business tax return.  She is a college professor who has a consulting business on the side.  She has a recently divorced friend who needs a new accountant.

Candidate One:  She prepares tax returns.  Interaction occurs when filings are due.  She turns around work quickly, yet takes little personal interest in her clients.  It’s clear she has no ambition, taking life one day at a time.

Candidate Two:  She specializes in salaried individuals who also earn money from other sources.  She sends out a regular newsletter talking about anticipated tax law changes and the effect they might have on different types of clients.   She runs the scholarship program at the Chamber.

Candidate Three:  He is a neighbor, but you rarely see him.  He doesn’t attend block parties or school meetings.  When you call, you can rarely get him on the phone, although he does eventually return all calls.  He projects an attitude that the business is successful and he has all the clients they can handle.

Scenario Three implies Candidate Two would get the nod.  However, it also asks the question:  Which candidate are you from the viewpoint of your client?


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