If you're not focusing on your accounting firm's referral strategy, then you're missing out on opportunities to grow, reach new markets, and build trust in your practice.
Due to the sensitive nature of the tasks you perform and advice you provide, accounting firms have a unique advantage over most other businesses when it comes to referrals.
A robust referral strategy can result in increased client longevity, enhanced reputation, and a lower client acquisition cost (CAC).
A referral strategy relies on trust and client satisfaction—without these, success will be difficult to grasp.
It’s simple: you play a critical role in your clients’ personal and professional lives.
They rely on your ability to advise, track and execute their financial goals and responsibilities, and run a successful business. And your ability to succesfully provide this underpins your referral strategy.
Here’s why you should be giving more attention to the potential opportunities for growth this strategy can have for your accounting firm.
Referral marketing—or word-of-mouth marketing—harnesses the power of client recommendations.
Accounting firms have a unique advantage over most other businesses when it comes to referrals.
You’re entrusted to deal with your clients’ most sensitive and important information. You’re responsible for individual taxation, and business advisory and compliance. Ultimately, you play a part in your clients’ success as business owners and/or financially savvy individuals.
So potential clients need to know they can trust you to do the same for them.
In fact, five out of six small business owners consider their accountant ‘a trusted advisor they can turn to for a wide range of business advice’. And impressively, 31% say their accountant is the advisor they trust the most, followed by family and friends (22%), lawyers (16%), and financial planners (9%).
This is where your referral strategy comes into play.
People are naturally skeptical of traditional advertising and marketing strategies. And why wouldn’t they be? Companies explaining why they’re brilliant is two-dimensional—you need extra insight.
But there is no form of marketing more powerful than a prospect hearing about the positive, honest experiences of current clients, directly from the source. They need proof that you’re trustworthy, efficient and knowledgeable. And who better to convince them than your current clients?
There are several reasons why an aggressive referral strategy will supercharge your accounting practice. The proof is in the numbers. Here are some examples:
A potential client is four times more likely to convert after a friend recommends your firm than a potential client without a referral.
People view social media referrals as seven times more trustworthy than traditional ads.
Referral leads convert 30% more than leads generated via other marketing efforts, and have a 16% higher lifetime value.
With four out of five consumers actively seeking word-of-mouth recommendations before making a purchase, the impact is clear.
Yes, attracting new, qualified leads to convert to clients is the primary goal of referral marketing. But that isn’t the only benefit of establishing a robust referral strategy for your accounting firm.
Clients who convert from a referral are 37% more likely to stay with your firm long-term. Not only does this increase revenue, but it decreases new client acquisition costs. It’s a profit margin boost. This way, you can allocate more of your budget to increasing client satisfaction, rather than sales and marketing.
Client referral marketing is far more cost effective than some sales strategies. Your client acquisition cost (CAC) is lower than that of non-referred clients by as much as $23.12 USD.
Rather than repeated spending on advertising and marketing efforts, you’re leveraging the good will and loyalty of satisfied existing clients. Some of the expenses you can expect from this method include loyalty program bonuses and referral incentives.
It’s important to note that your ROI is typically enhanced due to the high-value clients you gain through referrals. So it doesn’t just cost less to acquire new clients through referrals—these clients are usually very loyal and pay for more services.
Referral strategies help you expand your market reach and diversify your client base. You might find yourself reaching audiences you hadn’t considered before, which may even help you to identify a market niche.
You can leverage your referral strategy to make it the hero of your overall marketing strategy.
Let your happy clients do the talking and set you apart from your competitors.
With so much competition, you probably think you need to ratchet up your advertising efforts to attract clients. But consumers are already inundated with ads, commercials, and other marketing tactics. They don’t want more of the same. So, these efforts can sometimes fall on deaf ears.
Referrals are a welcome alternative. Remember: people find referrals on social media seven times more trustworthy than traditional advertising.
Some social media spaces have convinced people that their DIY skills are sufficient—even in a complex field like accounting. Fortunately, the real-world experiences of a trusted colleague or business contact may persuade them otherwise. Authentic testimonials from your satisfied clients will help with this.
It’s important that potential clients actually know how your services will benefit them. They need to understand what you will do for them and why you’re the best firm for the job. Referral marketing assigns much of that initial task to your happy clients.
It’s all about trust. If your current clients trust you to handle their finances and provide value, then you’re already half way to creating your referral strategy.
From there, you can consider the marketing referral strategies best suited to growing your accounting firm.
