3-Step Formula on How to Get Referrals

How To Get Referrals

Last week I wrote about a magic three-step system for doubling your referrals. Why?

Most tax business owners tell us that referrals are your single most important source of new clients. But, few of you make a point of asking for those referrals — effectively — and fewer still have systems in place for generating those all-important referred prospects. Since they still don’t teach how to get referrals in accountants continuing education, we’ll cover it here.

Last week’s article struck a chord, and several of you wrote back with more strategies for how to get referrals you’ve used in your own practices. One member from Kentucky suggested asking your clients what value you bring them, letting them sing your praises, then asking them who they care about who is in a similar situation. (“Works like a charm,” he said.) Another member from just outside Sacramento suggests that, after you get a referral’s name, you ask “how can I make that connection happen?” Then offer possible solutions like a phone conference, coffee, or lunch. Clearly, you’re hungry for more referrals!

Here’s a 3-step formula for how to get referrals by presenting a “typical” success story in a way that leaves your audience begging for more. Try this at your next networking function and let us know how it works:

  1. Identify your client and their problem in a way that builds affinity with your audience. If you’re speaking to an audience of business owners, your story ought to involve a business owner. If you’re speaking to an audience of chiropractors, your story ought to involve a chiropractor. You want your audience to immediately relate to your client and think, “that could be me.” If you’re speaking to a group of chiropractors, and you don’t have any chiropractor clients, find someone with the same sort of tax challenges chiropractors face. But, don’t tell them about some retired investor collecting Social Security, because your audience just won’t care.
  2. Outline, in general terms only, what you did for your client. Remember, don’t give it away! You can “show a little leg,’ so to speak — but be sure to leave enough mystery to convince your audience that they need your specialized expertise and experience. (They actually do, but that’s another story.)
  3. Identify, as specifically as possible, exactly how much you saved your client in dollars and cents. This is the key. It’s great to find a client just like your audience, but quoting them actual savings is what will have them salivating to talk with you.

Look at an example of this in action. One example is a married couple, both doctors. Let’s say you showed them how to take a home office and claim mileage deductions for the husband’s side income. Let’s also assume you discovered that filing separately worked to their advantage. Here’s how you would present this to an audience of physicians:

  1. “I just finished a plan for a pair of doctors — he works for a hospital and has a side income doing drug studies, and she works for a group practice in the suburbs.” We want the audience to listen, nod their heads, and say “hey, that could be me!”
  2. “I found some business deductions their old accountant wasn’t claiming for his side income and discovered that changing their filing status saved them even more.” Yes, you could say “we claimed a home office deduction, switched his car deduction from the mileage allowance to actual expenses, and filed separately instead of jointly.” But that would be giving it away — and that would let your listeners think, “I can take those ideas to my old accountant, Fully-Depreciated Frank.”
  3. “Those three strategies saved them $4,087 last year.” You could say, “I saved them several thousand dollars.” But “several thousand dollars” doesn’t have nearly the same effect as specifically citing “three strategies” and “$4,087.”

I’ve talked the last couple of weeks about “magic” 3-step formulas for how to get referrals. But there’s really no magic to it. If you want more referrals, just ask for them. And give people a reason to give them. Then sit back and figure out how the heck you’re going to handle all the new work!

Learn more about how to get referrals – Become a Certified Tax Coach

Next Week: Midyear Strategies for Gaining Business to Business Referrals