9 Client Conversations That Encourage Referrals

It's wise to ask for client referrals
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Your current clients know plenty of people. And, generally speaking, if they have money, they have problems. Addressing money and tax issues is your business, and the customers working with you are happy with you. It’s smart to take advantage of this network and ask them to refer business.

Asking for referrals is tricky on both sides. Some professionals are hesitant because they think it’s like asking for a favor, while others don’t see sending business as one of their customers’ responsibilities. On the client side, we live in a litigious society, and people might hesitate to be unwillingly involved in an issue if things don’t work out.  

Fortunately, despite these concerns, it is still possible (not to mention wise), to tap into the network of people your clients know. Here are nine face-to-face conversations that can lead to referrals. It all starts with asking, “Who do you know….”

  1. Who also wants to learn about this subject? As the year draws to a close, your client suddenly has questions about how the tax law changes affect them personally. They call. You spend time with them, patiently aligning the changes to their individual situation. You suggest some steps to take before year end. They are happy campers.

Approach: You ask if any friends and colleagues are also confused about the new tax act. Do you think they would also like to learn how the changes affect them? Then, stop talking. Your client might volunteer a name or two. This could be a personal introduction over coffee or a visit to their office to meet colleagues.

  1. Who also has the same problem? A client comes to you with a problem unique to their business or personal tax situation. It came out of left field. They were worried. You patiently listened, then provided an action plan for how to move forward and address the issue. Your client is relieved. They are happy.

Approach: People in the same occupation or business usually know plenty of other individuals just like themselves. If they have this problem, there’s a good chance at least one other friend does too. You ask if they know any other people facing the same issue and say you would be glad to talk with them.

  1. Who is considering selling their business? For many small business owners, a large part of their wealth is tied up in their company. As they get older, many are looking for a way to cash out. They may have inflated ideas (or none at all) about the value. Succession planning is an issue if their children want to go in another direction. Giving their employees the opportunity to buy them out might be an option they never considered.

Approach: Ask the question. Your clients may have friends who want to retire but have no idea about valuing and selling their business. It’s not your customer’s field, so they can’t offer useful advice. Suddenly, you are a resource to help this person transition to the next stage of their life.  

  1. Who is about to buy a business? Start a business? This is the mirror image of the above question. Buying an existing business makes sense, but how do you know if the asking price is realistic? They might be considering buying into a franchise operation. They might be tired of working for a big company and eager to set up on their own.

Approach: Ask. If your client knows someone about to take the plunge, that person probably has lots of questions. They need a fiduciary, someone who acts in their interest (and is paid for it). Introducing you means bringing them someone who can represent their interests and provide an honest appraisal.

  1. Who is new to the area? You have clients who are middle- to senior-level corporate executives. People in their office come and go because climbing the ladder often means relocating. There’s an urban legend that “IBM” stood for “I’ve been moved.” If they don’t know these folks at work, they might in their upscale neighborhood of executive homes.

Approach: Ask about new faces. Both the business section of the newspaper and business journals have “People on the Move” sections. Although some companies might provide personal accounting services as a perk, not all do. And when it comes to handling their money, many people prefer a face-to-face relationship.

  1. Who will be retiring in the next couple of years? Things are not what they used to be. Gone are the days when the salary stopped and the pension check filled the void. Now, for many people, there’s just the void. Personal retirement plans often allow for catch-up contributions, a useful feature for small business owners, but many people need professional advice concerning retirement and should get it a few years in advance.

Approach: Ask in the context of “Retirement’s changed. Many people are unprepared.” Your client should know someone, and if that person owns a small business, there may be a greater scope for offering advice vs. a salary earner. They need help.

  1. Whose accountant retired? One of the benefits of the accounting profession is the historically low client turnover rate. However, this sometimes means someone’s CPA retires before them or sells their practice and moves away. That individual might want to shop around, but inertia is powerful. This friend of your client isn’t happy.

Approach: If your client knows someone, ask for an introduction. You aren’t predatory, but you could listen to their concerns and advise them on their options. You aren’t stealing someone’s client (exactly) because the accountant they knew and liked is no longer in the picture.

  1. Who owns rental property? Real estate can be a seductive siren. The rental return often looks far better than fixed-income instruments. They heard someone once say: “Safe as houses.” They buy more and more. Suddenly, they have a portfolio.

Approach: Specific tax laws apply to rental property. You know about them, but does your client’s friend who has gradually become a landlord? If your customer hears their friend complain, they may feel an introduction is in this person’s best interest.

  1. Who is considering bankruptcy? This is last on the list because it’s grim. They amassed debts, then lost their source of income. They are behind on their taxes. The walls are closing in. Hopefully, your client doesn’t know someone who is dealing with this, but they might.

Approach: Tactfully ask. Try not to sound like a late-night TV commercial or drive-time radio ad. Explain it’s a complicated process. Assuming the following is true, let them know you’ve helped others and might be able to help their friend, too.

Requesting client referrals is a fantastic way to grow your business and can be tactfully handled, especially when the conversations take place face to face. Remember: You help people, and this is simply another method of figuring out who else needs assistance.

About Bryce Sanders

Bryce Sanders

Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.

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Dec 12th 2018 08:29

That is an interesting article. Our company gets recommendations on professional websites. Sometimes potential clients ask for previous clients recommendations and we got one yesterday. It is nice to see such feedback - we know what we do right and what we need to change.

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