Last year’s Practice Excellence keynote speaker Heather Townsend has warned practitioners that building a referral network requires a strong foundation – in this case, that’s being more specific.
From the last year’s Practice Excellence entrants, referrals emerged as one of the key trends from the practitioners. Many of the entrants noted referrals as an important source for growth. Small firm winner Linda Frier of Coalesco Certified Accountants said that referrals remained an important source of new clients at 38.2% of a total of 110 new clients in the year.
And many practitioners, like Blenheim’s Christopher Godden, attributed their growth to “building a more extensive network of referrers”.
This is endorsed by AccountingWEB contributor Bryce Sanders, who last year emphasised how referred clients are likely to have been sold on the idea of doing business with you by absorbing praise from your network.
However, Heather Townsend told AccountingWEB that many practitioners often succumb to three common mistakes when building their referral network. Firstly, there’s a temptation to attain as many referrals as possible, and as Townsend explains, this is not the best use of your time.
Narrow your approach
Recalling an ex-client’s approach, Townsend said: “When we first started working together she thought she needed to go to the opening of an envelope.”
Townsend instructed the client to “narrow down her approach”. The client soon found that a ‘less is more’ approach was more beneficial to her time. “She really narrowed down her approach to whom will send her work,” Townsend said. “When you know who will send you work and who’s likely, you can focus your relationship time on them – and guess what: they give you more!”
The scattershot, non-focused approach leads into another common trap: Not being specific enough. “Far too many, particularly small firm accountants, go out and say our clients are SMEs,” said Townsend. “That doesn’t distinguish you.”
Townsend adds that a high quality introducer is a bank manager, but warns that every single accountant will be vying for their referrals. So, while you might add your business card to the bank manager’s bloated pile, Townsend encourages accountants to ask themselves: “What will differentiate you from your competitors?”
Again, think specific.
For example, Townsend’s former client zoned in on attracting SME clients; in particular ‘the ones the bigger firms don’t want’. Knowing this, the bank manager was able to facilitate these referrals. “Being very specific about who you want and the value you bring is vital when you’re thinking about your introducing relationships,” said Townsend.
Paul Miller from Cornish Accountancy, a Practice Excellence entrant, deployed this technique and earned a fee through their unwanted overspill. He said: “As we are focused on our ideal client not all the referrals that we have had from existing clients are ideal, which we signpost on to another accountant for a fee.”
Some practitioners establish a relationship with, for example, a bank manager, secure some referrals, and then diminish their relationship with the introducer. This is the third mistake.
Bank managers (or any other introducer) are likely to strike up a relationship with a number of accountants, so if you don’t sustain your relationship, this network will crumble.
“If you don’t stay in touch with them, or have good quality face time, they’re going to forget you,” said Townsend.
Accountants who ditch this part of the profession during December and January, emerging from the office in February, will likely forget their relationships. “This is reason for feast and famine” Townsend says. “People stop marketing.”
Instead, stay in touch with your introducer, whether it’s regular meetings or reaching out in a virtual way – stay in touch.
Applying these techniques to strengthen your referral network, as Townsend suggests, should lead you to sustained success with clients. Practice Excellence entrant Simon Kallu of SRK Accounting said: “We have made joint alliances with trusted partners, as a good strategic referral network is the cheapest and most effective way to grow.”
What are your techniques when building a referral network? What mistakes should practitioners consider when building a network?