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I must admit that while the general tone of this article is very accurate - the underlying theme is that accountants don't take practice development or business leads as seriously as they should - I still hesitate.
In particular, while I am sure that the networking arrangements of BNI or similar are above reproach, personally I feel uncomfortable about treating clients as a commodity to be passed around. Silly, I know, but I can't get past that.
I think it comes from the fact that I have always had a very personal relationship with the clients, many of whom have been working with me for over 20 years. Perhaps I am set in my ways but clients as a resource (and their fees) just doesn't sit well with me. Perhaps I'm old school.
But there is an upside to my approach - I have really nice clients. This is something I have deliberately engineered over the last six or seven years - not by chasing the dollar but by working more with the clients I liked. Happily that was most of them. By weeding out the useless clients and the ones who didn't pay I have found that over time my small practice has become more profitable and a lot more enjoyable, which surely is the point.
I completely understand that my approach wouldn't be for everybody but you don't have to unleash your inner salesman in order to have a successful business.
If you need gimmicks to get business
then you certainly shouldn't be advising clients. In fact you should seriously consider your role as an Accountant.
I could increase my turnover as much as I want by using different marketing devices, but that isn't going to make me a better Accountant. My business will grow, yes, but I will not be able to service all my clients. I pick up clients who are referred because they say they don't see the Accountant that they formed a trusted relationship with anymore. So I think the important thing that this article misses is that there must be an optimum point at which your business will start to suffer.
The referrals report quoted
If anybody wants a copy of the bank referrals research report referred to above, please contact me on [email protected] (or leave your email address here if you prefer)
The cover price is £295, but I will gladly send you a PDF version at no charge.
STEVE
We don't ask clients for referrals
We never ask clients for referrals but do receive many of our new clients in this way. The asking for referrals would put negativity into the client relationship, whereas if an existing client makes a referral because of good service etc. then that puts a positive element into the relationship.
We have used networking and continue to do so and found that it is quite successful. I appreciate that the practice might be slightly bigger and potentially worth more by pushing for client referrals but if the client thinks he is visiting a salesman (like they often do when visiting their bank manager) rather than a trusted advisor would they recommend you anyway?
I would rather enjoy the meetings with clients and perhaps having slightly fewer clients is a sacrifice for that. But by haivng that better relationship with them means that as a trusted advisor I am asked to evaluate projects etc. and can obtain additional fees that way.
Taxteddy is right in that having the right clients and enjoying it is better than driving for more clients of mixed quality to increase turnover, as often the administration and debt collection costs can eat away at the profit.
Asking for referrals
I don't think 'asking for referrals' in the traditional way actually works. As the article says, this often brings in poor quality referrals.
I agree wholeheartedly with TaxTeddy and Ralph Robson. You shouldn't view your clients as a commodity to generate referrals from. This feels very wrong to me. If you do a good job and consistently deliver service to your clients they will give you referrals.
I also agree
I agree wholeheartedly that (A) you should NEVER treat clients as a commodity, and (B) that you should ALWAYS strive to give them the very best service.
But once you have done something really good for a client, reciprocity (which psychologists tell us is deeply rooted in human nature) kicks in and they actually want to do something for you in return.
So if at that point you gently and professionally remind them that you would love a referral, you are almost doing them a favour by allowing them to reciprocate.
As a result, they won’t feel exploited or commoditised. They will simply be happy to be true to their nature by being able to do something in return.
That is what all great relationships are built on: “I help you because you help me.”
And it is another example of givers gain. The more you give (ie great service) the happier they will be to give you something back (ie referrals).
But of course, if you ask for referrals without giving great service... you will get an altogether different reaction!
Old fashioned
If I am referred to a client. I would hope the referrer was not prompted all that makes me think is was he paid and what is in it for him. If a client asks me do I know anyone good I am more then happy to recommend with out being prompted and I am pretty sure that is the way it happens for me. I like to see good business doing well but they do not need to ask me. I think asking or prompting is a bit tacky.
The likes of BNI for referrals is a joke as it is a racket. Effectively it is pyramid selling. BNI is the weirdest networking event I have attended , talk about been bullied. Seriously joining a Chapter talk about weird it is like joining a cult and if you don,t do as they ask they take a flakey. One of my clients had a brain tumour and the chapter head rang them and gave them a lecture for not attending. I better stop because I could go on a rant about how bad BNI are morally. They would recommend anyone regardless if they are good are not and seriously morally void. However I do know business who have achieved work form BNI I would just rather stick pins in my eyes then attend one of their meetings ever again.
Just wondering.......
What exactly is a "successful firm"? How are we measuring this?
It may be that I'm an "awesome" firm and therefore wouldn't want to be just a "successful" firm.
I only refer clients to people that I 100% personally trust, needless to say that I don't refer clients to any banks.
.
Referrals are absolutely how I have built my business. But it is not in a salesman kind of way - ie the way that unqualified commentators come round and tell us that we are just a bunch of suits who need to understand how to sell, how to commoditise clients and generally how to act like the double glazing salesman they were before they got to old too walk the housing estates banging on the doors of anyone with wooden windows.
My referrals simply stem from clients and contacts telling people that they know someone who does a good job. It isn't something I ask for and I don't need to. I don't feel the need to commoditise clients and myself. To enough people I'm what they want in an adviser
So stop telling us all how to run our businesses but, more importantly, how to be a qualifed professional (for those of us who are!) We have been through more professional training and quandries than any of you SEO hacks and double glazing salesmen have had "retweets" on Twitter.
Quality speaks for itself. Quietly. It whispers.
You remember that when you're shouting your wares from the rooftop.
Ann
I couldn't have put it better. Now this makes me wonder what Practice Excellent really stands for.
well ...
Whilst not disagreeing with other practitioners' points above, there is a practical point to be made (I'm all for practical points).
Existing clients often ask me if I'm taking on new clients. In other words, I may be getting less referrals simply because clients do not realise that I would welcome them.
@Red Leader
The reason why they ask that question is that they know the time and effort that you put in with them. So they are genuinely asking if you have got similar time and effort for prospective clients.