Chairman of the Tax Advice Network and BookMarkLee
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How to get the kind of referrals you want

10th Aug 2015
Chairman of the Tax Advice Network and BookMarkLee
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Mark Lee asks networking strategist Andy Lopata to share some of his tips for accountants keen to rely on referrals for new business.

Whenever I ask Accountants the best source of new work they invariably reference client referrals. This has long been the case. More modern concepts such as online advertising, blogging and social media rarely come even a close second.

When I then ask accountants what do they do to encourage referrals of the type they want, to do the work they enjoy most and that pays well, they rarely have an answer. The referrals they do get are more typically the result of what I refer to as ‘accidental word of mouth’ conversations.

For those who are keen to secure more referrals I asked Andy Lopata, a networking strategist, to share his advice:

ML: Andy, accountants often tell me that they get most of their new clients from referrals. In your experience do these just 'happen' or do they need to be encouraged?

AL: In my experience most accountants are not generating anywhere near the potential amount of business through referral that they possibly could. Most approaches to eliciting referrals are reactive and half-hearted at best and where any attempt is made to be proactive they will tend to rely on old-fashioned techniques that simply don't produce results. 

ML: I hear you. But it's also the case that many established accountants rely on the fact that the majority of their clients will stay with them for many years. Once the practice is of a certain size the accountant no longer feels the need to seek out new clients all the time. 

AL: If someone's firm is in the position where they really don't need any more new business coming in, then good luck to them! But it's easy to become complacent, not so easy to recover when you discover that your business has ebbed away while you've had your feet up. 

Before patting yourself on the back, ask yourself if all of your clients are of the 'quality' you'd aspire to? Would your practice not be better if you could sack the least productive or most time-consuming 20% of your clients every year and replace them with more of your ideal? 

If you have staff, contractors or more junior partners, are they generating as much business as you, or at least contributing their share? Or do they focus on the technical work because you're bringing in the business? If the latter, what does the future look like for the firm? 

The beauty of a referrals strategy is that you can increase and decrease the flow of new introductions as needed, while ensuring good quality introductions by being clear about who you want to meet. 

ML: What about newer practices? Many accountants and bookkeepers start-up in practice each year and would love a steady stream of referrals.

AL: A steady stream of referrals takes time to build; you have to develop strong, trusted relationships with your champions first. Start with people with whom you already have those relationships, don't be frightened to ask your friends or family for help. Explore collaborations with other people in a similar position to you in complementary businesses, such as financial advisors or solicitors. 

And let people give you 'qualified' referrals, where they are clear that they're not vouching for your work at this stage but recommend a conversation. As you and your clients give feedback, they will soon drop the qualification. 

ML: And what about networking strategy once they have started to build their practice?

AL: Develop relationships with a range of potential champions from all backgrounds (clients, solicitors, financial advisors, former colleagues, friends, family, networking contacts). Stay in touch, see how you can help them and then focus on a small number of champions who are well placed to refer you and who are comfortable doing so. 

In my book 'Recommended: How to Sell Through Networking and Referrals', I share a system that focuses on developing just five champions at a time. I believe that a focused approach like this will produce more results than a casting a wider net as you get to understand your champions, know when they are ready to refer and ask in a way likely to make it easy for them to refer. You'll also find yourself recognising other opportunities to ask naturally for referrals more readily.  

ML: What have you seen work well for accountants in smaller practices?

AL: Many accountants join local networking groups. Those who go with the specific aim of selling their services rarely find satisfaction in doing so. But I've seen a number who recognise that people and businesses don't change their accountants often, so their goal in attending a regular group is to position themselves so that people think of them when the time comes to use or recommend them. 

So being present, supportive and consistent in how you participate in such groups and taking a long-term approach to the results is the best way forward.  

ML: And what are some of the most common mistakes you see?

AL: Writing letters to all of your client base asking if they'd be willing to refer you sitting back, writing for the introductions to come flooding in is a rookie error! 

Another is agreeing a mutual referrals agreement with a fellow professional services provider and then expecting the other party to maintain it without you doing anything to nurture the relationship or measure success. It's incredible how many accountants, solicitors, financial advisors and banks (I call them 'The Holy Quadruplicate'!) claim that their best referrals come from other professional services firms but then complain that all they do is give, never receiving. I don't know where all of those referrals are going. 

ML: How about some final tips?

AL: Understand that networking and referrals strategies should be central to your business planning, not an afterthought. If you leave things to chance or wait for them to happen you will be leaving business to go to your competitors. 

Such strategies are based on relationships, which take time to develop and need to be nurtured. Don't expect results overnight and don't wait until you are in need to get started.  

ML: Many thanks Andy. Plenty of food for thought and I'm sure AccountingWEB members will want to share their views and experiences

Related articles on AccountingWeb:

Andy Lopata is the author of Recommended - how to sell through networking and referrals and can be contacted by email: [email protected]

Mark Lee FCA is consultant practice editor of AccountingWEB and a speaker at conferences and in-house events, helping accountants who want to build more successful practices. He also facilitates The Inner Circle group for accountants and is chairman of the Tax Advice Network of independent tax specialists who provide support to smaller practices.

Replies (16)

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By qad999
11th Aug 2015 15:33

How to make money....?

by selling a book on explaining how to make money by networking.... rather than actually making any money by networking yourself

 

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Mark Lee 2017
By Mark Lee
11th Aug 2015 16:00

eh?

@qad999 I'm afraid you're mistaken.

Big name authors might make money from their books. Most of the people I know, like Andy, who have written books, do not make any serious money from them. Instead the books simply act as credibility builders and glorified business cards that help the author to secure more business. And yes, Andy gets a heck of a lot of business as a result of practicing what he preaches in terms of strategic networking.

Mark

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By eppingaccountant
11th Aug 2015 23:16

Marketing

I am afraid that this appears to be yet another article on marketing that doesn't tell the average accountant a thing that they did not already know.  Bland answers and a plug for his book.  Not impressive!

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Mark Lee 2017
By Mark Lee
14th Aug 2015 08:24

@eppngaccountant

You'll be aware, of course, that to have an average there must be those who are both above and below average. Why not accept that some articles are aimed at and of benefit to those who are less experienced than you? I see no need to insult them by suggesting they are below average. Plenty of average accountants do not adopt a strategic approach to networking for referrals. Andy's book is mentioned for those who might want more on this topic. As implied above, it's not like his book is gong to sell hundreds of copies as a result of being 'plugged' on AccountingWeb. Mark

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By eppingaccountant
12th Aug 2015 00:08

Marketing

I certainly did not intend "insulting" any accountants and having read my comments again, am satisfied that was not my intention or conclusion.

Mark, there have been a couple of comments on this article, both negative....perhaps an objective view might be to put your hands up on this occasion and accept that it is not the best of articles and that if peoples' comments are critical of AL conveniently referring to his book, then perhaps your readers do have a point.  It is ok for you to agree with your readers and disagree with somebody you have interviewed.

 

 

 

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Mark Lee 2017
By Mark Lee
12th Aug 2015 07:37

Objectivity
@eppingaccountant

Not sure I accept the premise that the only views that count are those expressed in comments on my articles.

I have written almost 200 practice focused articles for AccountingWeb. Some are indeed better than others.

Some of my articles attract a series of critical comments - often from the same 'vocal' members (who have yet to comment on this one). And then other readers frequently add their contra voices asking why the critics think that their views are all that matters.

There have been two comments on this article. Yours suggesting the average accountant would learn nothing new. And the earlier one suggesting it's all about promoting a book.

I have responded to offer an alternative view and encourage a degree of objectivity.

You are of course both entitled to your views.

Is it a below par article? Too early to tell in my view.

Mark

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By eppingaccountant
12th Aug 2015 08:32

In all my years in the profession, I have never read an article or book on Marketing for Accountants that is of any real value. They all miss the prime points. There are many keys to successful marketing but the single most important key, once you have established a system to bring in an ongoing flow of referrals, is, in my opinion, psychology.  Once you have a prospect sitting in front of you the worst thing you can do is to start talking about what services you can provide in terms of accounting and taxation and how your firm stands out from others.  That would put most prospects to sleep and rightly so.  It is all about winning them over on the personality front....and the secret to that would take more than a post on this forum to explain....but believe me, I have tried and tested it over the years and it is the most successful contributor to gaining a new client.  I think I have a book in the making!

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Mark Lee 2017
By Mark Lee
12th Aug 2015 08:41

You're right @eppingaccountant
its all about building rapport.

Mark

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By andylopata
12th Aug 2015 16:02

In response

Thank you first of all for inviting me to participate in this interview Mark. 

Having seen the comments on this thread I feel compelled to respond. I am sorry that not everyone appreciated my responses to your questions but everyone is entitled to their own view. Having looked at previous comments by both respondents, they are certainly consistent in their beliefs and there is a clear prejudice against books and articles on networking as stated by eppingaccountant. I think that has to be factored into any consideration of these responses.  

However, I hate for anyone to not find value in the advice I offer. Not knowing their own business models and experience, I can't comment on the reasons for their negativity towards networking or the advice within my responses. It may be that they really have found a better way or have a much stronger understanding than many of the accountants I have worked with over the years. I worry that qad999 has had a particularly negative experience that has coloured his response to anything similar, which if true is a shame. 

I can, however, only speak from my own experience. My advice has been considered good enough to invest in and put into practice by major names both across the professional services industry and in other industries, both in the UK and globally. It has also been considered worthy of input by the national media such as The Financial Times, The Independent and others, as well as major titles internationally. 

If either respondent (or anyone else) has any constructive comments about specific approaches or points I make, I would be delighted to address them and, if possible, learn from their input. 

As you kindly pointed out in your first reply Mark, I make little money directly from books. I very rarely refer directly to my books during interviews, evidence of which is freely available. In this case, I referred to a strategy that this format would not allow me space to expand on, so I pointed to the resource where more information could be found. If you choose not to invest the £15 or so to explore that, that is not a problem to me. Most of that money would go to Amazon and my publishers anyway. 

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By qad999
12th Aug 2015 23:49

The Eternal Sceptic

.

Most things in life are quite simple .  I do not need consultants, of unknown background and unsubstantiated claims, who purport to have authority on how to advise me .. most of them are "flash harrys", they have not been through what I have been through..because if they had . they would not have time to write a single book or give a single lecture

I know what I am doing and I am successful , i did not need a life coach or any of  the garbage that is now being sold to the unsuspecting profession

my free advice...... it is just hard work , commitment , training , qualifications, pursuit of excellance, be incisive ,  dont back down during enquiries even when you are afraid , know your subject and do not blindly accept anyone's advice (not even from experienced tax consultants  provided by your PI insurance- check it out yourself, even the simple things - time limits , they are often the key.. just revisit everything afresh as if it were new and so are you)

even in the most complex tax enquiries .. "simplicity is the key"..

"cut down the trees... so you can see the wood"

be hard when you negotiate wth hmrc , call their bluff.. do not be frightened by writing what you think is right and true ..it often works

how to get clients ?.. how the hell do i know ?  ., I just talk to them as friends rather than clients ,and tell them the truth without dressing it up , you need to get  leisure interests so you can pull it off ( and I dont mean that horrible golf thing).. anything .... and you can always draw in the client even if he has no initial interest in it.. it will also help you retain your sanity with all this accountancy and tax shit[***][***]

my wife (an FCA) once admonished me .. because I talked to her "as if she were a client".. ..that is my success .. and that is also my failure

So to sum up . there is no magic formula, no magic consultant's wisdom , no magic book ... no easy shortcut that can be bought ... it is  all about mistakes .....

because that is how you learn... how you fail..... and how you succeed

 

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By eppingaccountant
13th Aug 2015 21:55

Never A Truer Word

I totally agree with all you say qad999.  There is no substitute for hard work or, common sense, it's a case of rolling one's sleeves up and getting on with it.  Shortcuts to so-called success are a recipe for disaster.  Running and building a business is common sense and whilst outside views may be interesting or refreshing to read, we all inherently know what we need to do in order to build up a successful practice.  Marketing packages dressed up as keys to success are no substitute for going through the motions of working in your own business, grafting, making errors on occasion, learning from those errors and ultimately succeeding in achieving one's aims.

I firmly believe that marketing companies sell theory or at best other peoples' experiences of success....but in order to succeed yourself I live by the adage "Trust yourself, trust your own instinct and don't pay anybody else for marketing advice, it will make them rich sooner than it will make you rich". The proof of the pudding has been in the eating for me and many, many others.

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Mark Lee 2017
By Mark Lee
13th Aug 2015 22:43

I'm sure you've worked hard to be so lucky @eppingaccountant

Well done you.

Common sense

Sadly common sense ain't all that common in my experience. Dozens, maybe hundreds of accountants I have spoken with over the last year or so have worked hard but doing the wrong things. They haven't found the same success as you and haven't been able to recognise their own failings.

I've heard plenty of stories from accountants who know what they want to achieve but do not know how to make it happen to become more successful. It doesn't help them to be told that they should know or keep trying without any input or ideas from other people who have more experience and who have seen what generally works and what generally doesn't work.

Shortcuts

I agree with you 100% (again) that there are no simple shortcuts to success and that it's all too easy to invest a fortune in some marketing bully's systems and products - with no real prospect of getting a good return on the investment. I have said as much in many of my previous articles.

Mark

 

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By eppingaccountant
14th Aug 2015 00:09

Worked Hard, But...

All points noted Mark. 

I have worked hard but not "to be so lucky".  Being lucky implies something has happened by chance, or conjured out of thin air.  I have been fortunate that hard work has reaped dividends, but it has definitely not been luck.  There is a significant difference.

I would like to wind up my point of view by saying to any accountant out there before they pay a fee to a marketing company or somebody who claims to be able to generate additional clients for their practice, ALWAYS ask for a 100% refund of fees from the marketers if you do not see tangible results in terms of new client generation within a specified time period.  If the marketing company refuses, then I rest my case.  Now that IS common sense!

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Mark Lee 2017
By Mark Lee
14th Aug 2015 06:34

Luck
Practice doesn't make perfect; practice makes permanent.

A bad car driver doesn't become a good driver simply by spending more time behind the wheel. They might get better. But they are more likely to simply engrain bad habits and continue to be a menace in the roads.

Top sports stars all use coaches to improve as it takes more than 'common sense' to become a better tennis player (for example). It also takes longer to learn how to get better if you don't have someone to help you avoid making common mistakes.

There's a lovely quote, variously attributed to diff golfers, being told how lucky they were on securing a hole-in-one. Their response: "The harder I practice the luckier I get!"

LUCK, in this context, can be defined as:
Labour
Under
Correct
Knowledge

ie: Doing the right things in an informed way to secure the results you want.

Mark

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By eppingaccountant
14th Aug 2015 07:47

LUCK

Sorry, but there is no connection between an acronym and a definition.

 

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By justsotax
14th Aug 2015 12:29

I suspect part of the

problem is that most marketing guru's impart their 'theory' and 'wisdom' on the individual.  Compare that to the best coaches in any sport who do not only apply 'best practice', but more importantly learn what makes their player tick, and how best to match up the two. 

 

Given that most people enter into professions that suit their ability and personality it will often be unusual to find an accountant who is an outright extrovert in the same way that it is unlikely that you will find a marketing guru who loves nothing more than to do paperwork.  A good marketing guru will understand that and then provide an appropriate way to move forward, most however apply the theory they know and/or worked for them.

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