Your referrals are good (enough) but are you missing something?

Classic. Talking with a partner in a top 50 firm of accountants, I asked how they get most of their new clients. It was no surprise he answered ‘referrals’.  Many accountants and lawyers, claim that they secure most of their new work through word of mouth referrals.

This suggests that clients are making positive comments about them, and that’s great.  Clients may indeed do this if they’re particularly happy. But, in the same way, any unhappy clients will be quick to share their negative views even if they don’t express their disappointment to your face. Presumably you rarely hear of such complaints so you assume all is well and that plenty of referrals should be flowing. But is that the case actually?

I suggested my client consider how many referrals the firm (or at least his office) gets each year as a proportion of the clients they act for.  It was clear that only a minority of clients are referring business to the firm. Is it safe to assume that the majority of clients are all happy – and not referring business, or might they be unhappy? Unhappy and at risk of being tempted away by another accountant.

I’ve heard a large number of business owners talking about their accountants in recent years and it’s fair to categorise those views as good, bad or, most often, indifferent.

Let’s explore these different views and the wider lessons we can learn.

Good

Expressing a positive feeling that the accountant is doing a good job should mean that everything is good enough (or great!). Clients imply that their accountant does what they want, when they want it and for a fee that they consider to be good value for money. A good feeling is even more likely if the client indicates that they get pro-active advice and are very happy to recommend their accountant to friends and family.

Bad

Negative perceptions are sadly all to common. These clients feel that they’re putting up with bad service, high fees and/or get little of value. They certainly wouldn’t recommend anyone they know to use the accountant.

Indifferent

This is how I describe those clients who think their adviser is ‘okay’ or ‘good enough’. This might be because the accountant doesn’t wow the clients with great service nor do they feel that the accountant is charging excessive fees.

Sadly it seems to me that a high proportion of people think their accountant is just ‘okay’. The fact that they haven’t complained doesn’t mean we can assume that they think their accountant is ‘good’. It also means that the client is more at risk of moving to a new pro-active client than their current accountant might assume.

And yet, most accountants I know seem more likely to be working on the assumption that that no news is good news. That all clients are happy unless they say otherwise.  Regular client surveys are one way to check the real state of play.

‘My accountant is great’

I saw this comment on a business forum a while back. I asked the person concerned what made them say that? Here’s the reply:

“He keeps things very straightforward in his explanations not that I have any particularly complex matters to deal with but he acts quickly, keeps costs to a reasonable amount (not cheap but sufficient value), makes himself available as and when needed and I get comfort from the fact that he has a successful practice, nice small modern offices and polite and helpful staff. When I have required explanations re: overseas investments, capital gains tax, what I can put against tax to minimise it legally, he delivers his knowledge in an easy to assimilate manner”.

I think that’s about it in a nutshell. Of course different clients want different things from their accountants. And different elements of your service and style will appeal to different clients.

Conclusion

If your clients are getting the service and attention they want from you at a price they’re happy to pay then they MIGHT be expressing a positive view about you to other people. They’ll only do so when asked though. Are you consciously doing anything to ensure that your clients see you as good, rather than bad, or do you risk them being indifferent?

It’s only if your clients think you’re really good that they’ll be saying positive things about you to all and sundry. And if you rely on word of mouth referrals for new clients, you may find that we are moving into an age when you need to adopt a more active approach to encouraging these.

Whilst I am often asked to speak about the importance of encouraging referrals at away days and conferences, I do not run training programmes as such. Always happy to introduce trusted friends who can do this if it’s what you want. Indeed I would happy to refer them to you if asked ;-)