Having worked with, consulted to and advised partners of
accounting firms as well as countless owners of small to medium sized
enterprises across Australia, New Zealand, North America and the United
Kingdom, I discovered that without question – THE most wasted opportunity for
all of those businesses - accountants or
otherwise was:
FAILING TO
ACTIVELY ASK YOUR EXISTING CLIENTS FOR REFERRALS.
Ask any small business owner: “What’s your number one
source of new business?” The vast
majority will tell you: “Word of mouth, referrals from our existing
customers”.
Then ask the next and most critical question: “Do you have a system for consistently
generating referrals?”
The answer, almost 100% of the time, whether accounting firm
or SME:
Nope.
Like those small businesses, accounting and professional
services firms typically fail to create a system for generating referrals. Many firms have systems for tracking where
new clients come from and others have systems for thanking referrers however,
ALL BUT NONE have a system for actually GENERATING referrals from your client
base.
Let’s explore this HUGE opportunity for your firm, to do
that, let’s start with a simple calculation ...
Make a note of your average annual fees per business client,
for example, $3000 p.a., $5000 p.a., $8000 p.a., $12,000 p.a., $18000 p.a.,
$23,000 p.a. etc.
Now make a note of how long an average client stays with
your firm, e.g. typically, 5 or 7 years.
Now calculate the two i.e. your average annual fees per year,
per business client, multiplied by the number of years they stay with you. For example:
$7,000 x 7
Years = $49,000.
That means every business client is worth $49,000 in gross
revenue to your firm over time.
Now ask yourself this question ... Would you say, that over
those 7 years each client would refer to you at least one other business
client?
If the answer is ‘yes’ which is the typical response from
most firms, then in reality every client isn’t worth $49,000, in fact
they’re worth $98,000. They’re worth
that via the value they add to your firm, by speaking positively about you to
their colleagues and associates.
(If the answer is ‘no, we wouldn’t get 1 per client over
time’ then frankly, you have some work to do within your operations. When you offer quality products and services
and high customer service, referrals come naturally. Please note: your average fee per annum may
be too low e.g. $3,000. It’s very difficult
to add real value to clients and go over and above ‘standard compliance’
servicing in that price range. To quote Tom Peters: ‘we are rewarded to the
extent to which we add value’, you may need to rethink your average hourly
rate/value pricing to be able to offer more value to clients AND therefore,
have talking about you positively as a result.)
Given the enormous value of a client and their referrals to
you and your firm, the key then is to spend some time developing a system that
captures referrals rather than leaving it to chance.
Just remember the three magic rs of referring
record, reward, remind
RECORD … the details of who has been referred when they make
an initial seminar booking and when you enter their details into the database.
That way you’ll know who is getting referred, who they are getting referred by
and who is doing the most referring.
REWARD … referees generously and also make referred clients
feel special because they have been referred by one of your top clients.
REMIND … clients regularly about referring people they know.
It isn’t a case of sitting back and letting them come to you. It’s important to
continue to maintain that WOW service experience and also to continually remind
‘A’ class clients about the need to refer.
