The 3 reasons you cannot rely on referrals if you want to grow your practice

Most established Accountants running their own firms claim to get most of their better new clients via referrals.  is this true or relevant to less established practices?
Experienced accountants claim that no other activities and no marketing investment ever seems worth the effort. The following sentiment is typical of what I hear:
“I get all the new clients I want through recommendations and referrals. To be honest I don’t have the scope to take on lots of new clients. I’m happy with those I get simply by doing a good job for my clients.”
Surveys perpetuate this attitude to referrals. Ask 100 accountants the best source of new clients and ‘referrals’ is always way ahead of other marketing activities. Part of the reason for this is that well established accountants may not take on many new clients each year. They haven’t done much in the way of marketing and have an old fashioned underperforming website. So the most likely source of those new clients is recommendations and referrals. And they may well be right.
Given all of this, why do I say there are 3 reasons that you cannot rely on referrals if you want to grow your practice?
1 – It’s too random and uncontrolled
If you want to grow your practice you need to take a more active role in generating new prospects and clients.
2 – It’s too hit and miss
Few accountants I know planned to grow their practice by taking on more low fee simple tax return clients. If you don’t take active responsibility you are just as likely to get referrals to small as to big clients. Do you want to be sidetracked by people who don’t want to pay the fees you deserve to earn?
3 – It’s based on a misconception
The theory that you should focus on securing referrals is not borne of the experience of other accountants who are keen to grow their practice. No. Instead it comes from the experience of accountants who do NOT want to grow their practice significantly. Why should their experiences be relevant if you DO  want to grow your client base?
Don’t misunderstand me. You can grow your practice via referrals. But not if you do the same things as other accountants who are not looking to grow their practices.
One of the clients I am mentoring told me wanted to win about 45 new clients paying good fees over the next year. My role was to add a touch of realism, to encourage, cajole and support his ambition.
During our conversation I encouraged him to then think about how many of those 45 will become new clients in the next 6m? He thinks 15. So I asked him “What will happen in the following 6 months that will enable you to double the rate of new clients to 30? That’s what you’ll need to reach your target of 45 in a year.”
My mentoring client appreciated the challenge. He said he hoped that the first 15 would each refer him on to at least one new client each.
I encouraged him to recognise that he will have to do more than rely on ‘hope’.
He will need to consider when he will ask new clients for appropriate referrals and how long it will take for those clients to identify realistic prospects.
We will continue to refine his strategy in this regard. And, given his ambition to secure more high-value clients over the next year or so, he will need a more focused strategy than simply hoping for the right type of referrals.
The bottom line here is that doing a good job and hoping for loads of referrals will rarely enable you to achieve your growth ambitions. If you would like to discuss whether you can afford my support and encouragement to ensure you set and can achieve your ambitions, please check out the ways in which you can secure my input and help >>>
By |2018-05-22T23:06:08+00:00March 27th, 2018|Accountants, Marketing and promotion, Reputation, STANDING OUT|

About the Author:

Mark Lee FCA is an accountancy focused futurist, influencer, speaker, mentor, author and debunker.

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