According to a 2019 survey by Accounting Today, 79% of accounting firms said referrals were the top source for new clients. For the sake of comparison, advertising (online and offline) was mentioned as a top source by less than 10% of the firms, according to the same survey.
Referrals are a powerful, inexpensive, and ubiquitous tool every CPA, accountant, and bookkeeper should rely on to recruit new clients and grow their practice. And as with any tool, you need to know how to utilize it to make the most out of it.
Decide on the clients you want to get referrals from
While casting the widest net possible (meaning, ask all your clients for referrals) has its appeal, it's not necessarily the best path of action.
First, you don't just want any new clients. You want quality clients. Second, you want to concentrate your efforts on approaching existing clients who have the most potential to deliver.
Pause for a moment and ask yourself which of your clients are:
- Most satisfied with your services. It almost goes without saying that clients who are appreciative of your work will be most cooperative.
- With you long enough to know and trust you, and for you to know them. Clients will be more likely to recommend you after they've gotten to know you and you've established a stable relationship.
- Gratifying to work with. Clients will most likely refer you to friends and colleagues from the same industries. Prioritize the ones with whom you enjoy working over clients and industries you'd rather stay away from.
"How" and "When"
You have a carefully picked pool of clients, and you're all but ready to start reaching out. Before you do that, you should decide on the best way to approach them:
- In-person conversation vs. email. A conversation is obviously preferable. Still, some accountants feel uncomfortable asking for referrals and prefer to send out emails.
If you do opt for emails, make them personal so your clients don't feel like they're part of a general mailing list. Mention them by name, and add some specifics about your work together, their business, and why you're approaching them specifically.
- Prepare a script. Asking for feedback is a great way to start off a conversation and to test the waters. It's an effective segue into asking for a referral, and a way to test the waters.
As mentioned before, it's best to say a few words about your work together. You can mention how you're enjoying working with them, or bring up a challenge you've helped them overcome.
- Timing is everything. Time your request to when it'll have the best chances - after you've finished a job to their satisfaction, when you know they're not preoccupied with work or troubled with business matters.
- Make it easier for your clients. Don't let your clients do the marketing for you. Have an email with a link to your website ready to be sent to them for forwarding. Make sure it includes all the relevant information for prospective clients in a clear and marketable presentation. Make it as easy as possible for them to refer you to other clients.
- Improve as you progress. Whether you're approaching your clients in written form or in person, trial and error is part of the process. Learn as you go, examine what worked and what didn’t, what could be improved, and tweak your approach and message for the next referral request.
Colleagues are also an abundant source for referrals
While clients are an excellent source for referrals, they are in no way the only source. Your professional network is also a great way to get new clients. Use your connections and ties with other accounting professionals, let them know they can refer clients they can't take on for some reason, and that you'll return the favor.
A small perk or reward as a token of appreciation goes a long way
Whether it's a colleague or a client, if you've landed a new account through their successful referral, showing your appreciation is never a bad idea. A gift card, a box of chocolates, a flower arrangement: anything showing your gratitude will do the work. It also provides an added incentive for them to refer more prospects.
Just be sure you conform to the relevant regulations and ethics rules on commissions and referral fees, as there are limitations on these.
*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.