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March 1, 2017

Are referrals going somewhere else?


In 2015 the Australian Bureau of Statistics recorded that there were over 2.1 million active businesses in Australia with just over 281,000 of these being new business entities. Although the stats for 2016 are yet to be released, it’s reasonable to expect that the number of SMEs will have grown slightly and many of these will be looking for their first or a new professional advisor(s). For accountants and lawyers looking to attract and retain SME clients it’s important to understand what SMEs are looking for these days and how they determine the firm they want to talk with.

At SmartFee we talk with accountants, lawyers and SMEs every day. We often get asked what other firms are doing to grow their practice. Although we haven’t formally quantified the numbers, based on our conversations, we estimate that the firms that are growing (I mean more than 10% p.a. revenue growth) are attracting most of their new clients via referrals. Our estimate is that at least 80% of new clients are coming through referrals from existing clients.

Below are three key elements that are important to understand in order to attract great referral clients  – how do you stack up and will they come to you?

1. They ask their business owner friends
There’s a strong reason that many successful firms acquire over 80% of their new clients from referrals. Anyone who is delighted with their accountant or lawyer will be more than happy to recommend them. Nurturing your existing client base to ensure that they are happy to refer you is important. It can also be one of the highest ROI spends in marketing – spend some time looking at ways you can reinforce the value you provide your clients and recognise them for their contribution to your business – it’s the small things that make a difference – a quick call to check in, a few client events or networking sessions to help your business clients connect with each other, a birthday card and even a reward program for referrals can be effective options – the more you can do for your clients to give them reasons to talk positively about you, the more likely you will generate quality referrals.

What are you doing to nurture the potential in your client’s base? Is marketing to your existing clients to support attracting new ones a priority in your marketing budget this year?

2. They research (or should I say, they GOOGLE)
Everything your next new client wants to know (or thinks is important in the selection process) is Google-able these days. A quick look at Google searches in Australia over the last 12 months though highlights that it’s likely most research is conducted directly on the website of the firm they are reviewing (as recommended by friends):

 Search Term # Searches per Day
 Lawyer 61
 Accountant 48
 Legal Fees 69
 Accounting fees 28
 Best Lawyer 59
 Best Accountant 26

The above is quite significant – your potential clients already know who you are. Their research will be focused on understanding more about you. Although you’ve been recommended there’s still a credibility/likability process that your potential clients will undertake. They will Google your firm and the partners, look at your website, read your articles and newsletters, and check out your LinkedIn profile. They will likely look at Facebook – it’s just part of the scan these days and many businesses have a Facebook presence. Facebook is also a place where many business owners connect with their clients and business networks!

Remember that much of the research these days is done on a device (phone or tablet) so it’s very important that your website is optimized for mobile device browsing.

3. Accessibility (Is geography relevant?)
With cloud software and the number of collaboration solutions available today, many business owners are quite comfortable to have their accountant or lawyer located several kilometers away or even in another state. In the search for the best skills and the most value, the right fit for them may well run their firm some distance away and they not see the necessity of having to meet face to face (unless it’s deemed a key requirement). Firms that are able to fully service their clients virtually are in the minority right now however expect to see a rapid increase as utilisation and acceptance of virtual and collaborative technologies becomes mainstream.

The other challenge around accessibility is how you manage client queries. Often the main reason for a business owner leaving their professional advisor is that they can’t get a timely response when they need an answer. During the initial meeting with your client it’s important to really understand their expectation around your availability what you are prepared to commit to in terms of a standard response time for queries and options for that “emergency” issue.

There are of course many factors that ultimately contribute to winning referral clients. Understanding what you do well to attract new clients and what is the process that your new clients go through to select you will go a long way to supporting strong client acquisition through referrals. Taking time to walk the journey that referred clients take and reviewing the impression you are creating is a critical component to your business development approach.

 

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