The referrals reality check: Why great work alone isn’t enough and 5 questions clients secretly ask before making referrals

Sep 26, 2023 | Business Strategy

Besides having the longest title I have ever used, this post does two things.  Firstly I will debunk the idea that as long as you do great work and deliver outstanding value to your clients, they’ll tell everyone they know and you’ll get loads of good new clients.

The second element of this post summarises how you can make it easier for your clients to make more and better referrals OF THE TYPE YOU WANT.

Debunking first
The idea that you just need to do a good job to get all the referrals you want, is naive at best.

It’s one of the reasons so many good accountants are disappointed with the number and quality of referrals they get.

Clients rarely make referrals just because you’re good at what you do. Being good at what you do is a prerequisite to even being considered for a referral.

If you’re lucky a client may pass on your name as and when someone asks them if they know a decent accountant. But how many of your clients routinely enthusiastically promote your services, specialism and expertise?

To understand what it really takes to get referrals, let’s take a look at what goes on inside the mind of your client before they make a referral.

1 – Will I be responsible for this?
If I recommend my accountant to a friend and they have a bad experience — the accountant loses the client, but I could lose my credibility.

It works the other way too though. If my friend has a good experience with the accountant, I’m the hero.
But is it worth the risk? Is it worth putting my name on the line when I have no control over the experience itself?

Sure, your client may have had a good experience working with you. But before they refer you, they have to believe that their friend or colleague will also have a good experience.

How do you build that kind of trust?

You need to be so good at what you do that if a client recommends you to a friend and they have a bad experience — your client will assume the friend was at fault and defend your reputation. Because that’s how good you are.

2 – What’s in it for me?
This is ultimately what’s going through your client’s mind.
To help your client overcome the apparent risk of making the referral (see Question 1), the incentive has to be clear.

There are two ways to look at this:
The referral improves your client’s relationship with you: When a client sends you business, you’re more likely to go above and beyond, offer favourable terms, and be more flexible in catering to their needs. When the rewards are aligned, everyone wins.

The referral improves your client’s relationship with THEIR network: Making a trusted commendation to a friend or colleague is an act of generosity. It makes the one making the referral appear more valuable and triggers the law of reciprocity.

In some cases, formal referral programs that incentivise referral partners with a commission can work really well. But not usually with clients.

3 – Am I risking my relationship with you?
What if the person I refer to you ends up being a nightmare? What if you end up resenting me for sending you such a terrible deal?

There will always be a few bad apples that make it through the pipeline. If you can’t weed them out entirely, you can’t expect your clients to either.
There are two ways to mitigate this risk for your client:

When it happens, don’t hold them responsible: Make your clients confident that they can send you business without fear of reprisal if it doesn’t work out. If you don’t address this fear, you’re the one who stands to lose in the end.

Be crystal clear about who you work with: As a rule of thumb, good clients refer good clients. On the other hand, referrals from bad clients should be approached with a healthy dose of skepticism (luckily, bad clients rarely make referrals).

I have heard too many stories from accountants who don’t value the referrals they get as they are too random, are unwilling to pay decent fees or they only want some low value but time consuming service/support. How easy do you make it for clients to know what referrals you would actually appreciate?

4 – Are you going to make me look good?
For existing clients, it’s safe to say that they know, like, and trust you — otherwise they would’ve packed up and gone elsewhere by now.
But that doesn’t necessarily mean they’re comfortable referring business to you.

There’s often a gap between who clients do business with and who they want to be perceived as doing business with. If they want to project a certain image of themselves, they won’t make referrals that conflict with that image.

For example, if they have a reputation for providing high value services, they  are unlikely to  tell people to visit a very traditional accountant in a dirtty office above a shop on an old high street.  It doesn’t align with the image your client may be trying to project.

Making a business referral is like unveiling a piece of your business to a friend or colleague. Clients only do it if it makes them look good.

5 – Is there a good story to tell?
No one ever said, “Oh you should call my accountant, they’re not the best, but they’ll be good enough for you.”
If your clients see you as just an average accountant — there’s no story to tell there.
To earn referral business, you have to be the absolute best choice for your ideal clients and that means they need to understand what makes you better than average – which you are!

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