Even though referrals from loyal clients can give your business a tremendous boost, many accountants and financial advisers struggle to start the conversation. But according to referrals expert David King, it needn’t be as daunting as it seems.

How comfortable are you about asking your clients for referrals? If the thought fills you with dread, you’re not alone.

David King is the Managing Director of Vue Consulting, which focuses on training financial professionals in the client referral process. He says that while client referrals are vital for business growth, it’s a conversation that many professionals find incredibly difficult.

“Through surveying our training participants, we found that around 70% feel uncomfortable or extremely uncomfortable discussing referrals with their clients,” said David. “However, our research of clients themselves shows that 80-90% are really comfortable discussing referrals with their advisers.”

Why is it so hard?

There are a variety of reasons why accountants and advisers are afraid to seek referrals from clients. Some worry about coming across as too ‘salesy’, while others are concerned it will put pressure on the relationship they’ve worked so hard to build. And then there are those who believe that referrals will come organically if you focus on doing a good job and building your client relationships.

But according to David, these are all myths – albeit powerful ones that may be stopping you from tapping into your greatest referral sources.

“The thing is, it’s not about asking for referrals – it’s about discussing them,” he explained. “The aim is to let your clients know your business has the capacity for referrals. You can also talk about the kinds of clients you love working for, and the situations you can help them with.”

Timing is everything

Another common mistake advisers and accountants often make is in trying to gauge which clients are most likely to refer. But as David points out, it’s impossible to know exactly who is in your clients’ personal and professional networks.

A better approach is to talk to clients whose expectations you’ve met, once you’ve developed a solid relationship with them. In other words, getting referrals is less about who you talk to, but more about when you approach them.

David commented: “It’s critical that you don’t ambush your clients or they may feel painted into a corner – especially if you use high-pressure language.”

Plant the seeds

One way of preparing clients for the referral discussion is by planting what King calls ‘referral seeds’. These are basic reminders to your clients that your practice willingly accepts referrals.

“You can drop them into marketing collateral, on your website or through social media,” David said. “They can help create a referral culture among your clients – as well as reminding you that it’s safe to talk about referrals.”

Another useful option is to develop one-page flyer that encourages your clients to refer. This can make you feel more comfortable when discussing referrals – especially as you and your clients are probably used to talking through documents together. What’s more, if your clients read the information while listening to you, they’re more likely to retain it.

David also suggests including this flyer in new client packs, attaching it to invoice emails or handing it out at seminars – but that shouldn’t be where your referral activities end.

“While referral seeds are a great backup, they’re unlikely to achieve referrals on their own,” said David. “They work best when you actually also have the discussion with clients, as this has a more memorable impact.”

Avoid incentives 

Wanting your clients to refer is one thing, but providing incentives can be problematic. According to David, offering clients a reward for each referral they send your way is a flawed strategy.

“Clients generally don’t refer just so they can get a bottle of wine or gold-class movie tickets,” he said. “You want clients referring friends or colleagues because they know you can help them.”

However, King believes there’s nothing wrong with thanking a client who refers you to others. Sending them a handwritten letter or giving them a small gift at their next meeting can be an appropriate gesture of gratitude.

“Thanking your clients is great, but make it a surprise,” said David. “It shouldn’t be the main focus – your professional abilities are what should drive referrals.”

Play the long game

Achieving a steady stream of regular referrals isn’t an overnight process, but one that requires a long-term view. And while it’s good practice to talk to around 80-90% of your clients about referrals, you should be prepared for only 30-40% of those clients to actually refer – and that might happen years from now.

David therefore suggests applying a targeted, disciplined approach and tracking your results over time. Once you have enough data, you’ll be able to see which referral strategies work for you – and which ones don’t.

“It’s not about pushing hard or creating urgency; it’s about ongoing and gentle reinforcement,” he said. “The irony is, the harder you chase referrals the more difficult they are to get – but the more relaxed you are, the more likely you are to see results.”

3 golden rules for referrals

1. Don’t chase referrals from the get-go. Instead, choose a specific time in your relationship with a client to start discussing referrals – and make sure you’ve met all the client’s expectations first.
   
   
2. Build your online presence. When a client refers someone, the first thing the prospect is likely to do is look you up online. Make sure you have a strong, professional website and an active social media presence on an appropriate platform. For example, if you prefer working with professionals, focus your energies on LinkedIn.
   
   
3. Put yourself out there. Speaking engagements at conferences, seminars and industry or community events are a great way to boost your profile. You’ll also have the chance to network with potential clients and referrers – they’ll not only get a sense of your personality, they may also feel more comfortable approaching you in a social environment.
   
   

To learn more about building a client referral process in your business, talk with your Practice Development Manager or check out the resources and courses at Vue Consulting.