Client referrals have been an essential part of Anup Shrestha’s work establishing and growing his accounting business, Wealon Tax and Bookkeeping, over the past two years.
“In the initial phase, I didn’t have many connections,” says Shrestha, an IPA member and Tax Accountant in Adelaide.
“I started providing accounting services to some of my friends, and then they referred their family members and close contacts. Referrals have been invaluable to me.”
Securing word-of-mouth referrals
Personal endorsements can be a powerful way of generating new business. When these come in the form of referrals, they often help to expand your client base.
“If someone is referring me to a client, they’re doing that because they’ve received great service. The previous client has witnessed my service and has a proven track record that my services were beneficial to them,” Shrestha says. “They’ve benefitted from the service and want others to experience those benefits, too. If someone is referring your business, that reflects on them as well to an extent.”
Shrestha says this form of building his business has been much more effective than advertisements and marketing.
“When a client refers a family member or friend to me, there is normally a 50% chance that the person they’ve referred will reach out and engage my services,” he says. “But when I’ve used social media and marketing, it’s very rare that someone who has seen a banner or advertisement will contact me.”
He has considered asking clients for testimonials to feature on his website, but is hesitant to use Google Reviews or other platforms after receiving advice about the possibility of negative responses from clients in such a public forum.
“It could be disadvantageous to my business so it’s not a strategy I’m considering right now,” he explains.
Tactics for securing referrals
When Shrestha opened his business, he established a commission structure aimed at incentivising existing clients to provide referrals.
If he received new business from a client, he had a mutual agreement that the existing client would receive 15-20% of the income he generated from the new client.
But Shrestha quickly realised this wasn’t serving his or his clients’ needs.
“I thought it would make my clients motivated to speak positively about my company, but it didn’t work out as I expected,” Shrestha says. “My referred clients didn’t like that someone else was benefitting from their invoices, and they felt like it wasn’t an honest referral.”
Since then, Shrestha has steered clear of offering financial incentives, instead opting for an approach that keeps the clients’ needs and the value they bring to his business at heart.
“Normally, after I finish a job for a client and send them the invoice, I’ll also send them a text message which says that referrals are highly valued.”
That way, you’re not putting people on the spot, but giving them the time and space to choose how they want to respond, he says.
Sending a text message, along with Shrestha’s other strategy of mentioning that he’s open to referrals in his email signature, signals to clients that he’s open to engaging with new clients.
“Most accountants have a packed schedule and can’t take new clients. So many people will automatically assume that’s the case. You need to convey that you have room to take on new clients, so a text message and an email signature are both great ways of doing that.”
Above all else, the most important factor for obtaining referrals is providing excellent client service.
“It’s really the best thing you can do. Make sure you’re providing good service, are available to your clients, meet the deadlines you agree on, and have reasonable fees. Existing clients are your advertisement. If they have a good experience, they’ll refer you to other people. It might not be a fast process, but it will work.”
Keeping future growth in mind
While Shrestha is in the early years of establishing his business, he’s found that personal referrals have been sufficient for bringing in new clients. But once he hits the five- or six-year mark, he may want to scale his business beyond where personal, ad hoc referrals can take him.
“I’m happy with a relatively small number of clients at the moment but personal referrals might not be enough if I want to grow,” he says. “I’m based in Adelaide and 90% of my referrals are from people based here. If I want to have clients in Sydney or Melbourne then I might need some sort of referral structure.”
There’s definitely scope for growth, he says, but providing quality service is the utmost priority.
“That’s what I always strive to maintain, and that’s what I‘ll continue to focus on.”
