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You know that referrals are the best way to get new clients. To get the best referrals, you need more than naturally occurring word of mouth. You need to have a program to actively encourage referrals in multiple ways.

You’d think that clients would give you referrals because they like you or your service. Nevertheless, it doesn’t always happen this way.

To have a top practice you must do more than produce good work and wait for referrals to follow.

Some clients are just more likely to give referrals than are others. When you identify someone who is liberal with their referrals, cultivate them.

They will be worth several people who like you just as much but aren’t in the habit of giving referrals.

Ask for Referrals
You need to set up a regular system of asking for referrals. In addition to calling current clients and asking them for referrals, you can call past clients and ask them for the names of people who might need your service. Often they also turn out to be interested in trying you again.

A good time to ask for referrals is when people compliment you. A woman said that her clients sometimes thank her effusively for helping them with their money situations.

She tells them “The best way to thank me is to send your friends who might need the same help.”

Reward Referrals
While you can’t “pay” people for referrals, you can reward them in some ways. One accountant holds an annual dinner for his referral relationships.

After dinner, he takes a few moments to thank everyone for sending referrals. A lawyer I work with always sends a letter of appreciation.

You certainly should thank them and try to send them referrals in turn, so long as the quality of work and reputation is of high caliber.

Or you may be able to do business with them yourself. You can also arrange meetings between clients who might do business with each other.

Wrapping up
You may think of asking for referrals as an admission of weakness – that you want more business.

But if you don’t ask for referrals, why should people assume that you want them? If you’re established in business, you need to be clear that you want more business.

Asking can also show your strength. People understand that you may want to grow your business, or obtain more clients of a certain type.

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Attorneys and CPAs are pricy to more information about their clients’ business affairs than any other professionals. You have the powerful potential to add real value to your client relationships.

One key area in which you can add value is in helping your clients visualize their business futures.

You are uniquely qualified to help clients with business strategic planning, personal financial planning, tax planning, technology planning, and many other types of forward-thinking strategies.

Sell Top Value
Most clients will tell you that business planning ranks near the top of the “value ladder.”

Commodity services are on the bottom rung and services with high impact rates are the top of the ladder. In between the bottom and top rungs are various stages of value in services.

Price resistance is highest at the bottom of the ladder, and competition is stiffest. Near the top of the ladder, both competition and price resistance fade away.

Some experts will tell you, “Accounting and law are moving away from compliance services.” I say, “Not true.”

It is true that most compliance services are commodity-like in nature and therefore reside near the bottom of the value ladder.

Nevertheless, if you add only 20% in high-value services into your mix, you can collect premium fees on the commodities. You will also experience a noticeable decrease in fee complaints.

What Premium Services Can You Offer?
For example, strategic planning is a value-added service you can help provide clients. Encourage your larger clients to hold an annual planning advance (what has traditionally been called a “retreat”). Perhaps you could facilitate the advance.

Certainly you should attend and contribute to the dialog. You can help with projections or forecasting.

Many business people are excellent at visualizing their futures, but many are not good at the in-depth thinking and calculating necessary to develop a strong plan.

You can help. When you help clients plan for their business futures and keep track of their pasts, you will become a true full-service professional.

Another service offering is personal financial planning and tax planning. They are value-added services that other businesses have taken away from the accountants and attorneys.

Many of us have been so busy protecting our low-end commodity services that banks, consultants, insurance, companies, and others have become well known for these services.

Summing up
CPAs and attorneys have unique qualifications. Talk with your clients about helping plan their business futures. Many of them will welcome your suggestions and you will increase your position of trust and profits.
 

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The summary close is especially useful when you are offering a new service to one of your existing clients. (Sales to existing clients are the most profitable.)

When you approach the end of your presentation, your client is faced with the task of organizing all the pieces of information into one clear and comprehensive picture.

The summary close is excellent to use in this situation, because it is a logical organization of the features and benefits. With the summary close you are partnering in the decision-making process with your client.

Help Them Decide
Although you client may be very impressed with your vast knowledge, he or she may experience some difficulty organizing what you have said.

In essence, the summary close is designed to refocus your prospect’s thinking on a composite picture of those parts of your presentation that clearly fit his or her needs.

Amateur sellers tend to think of the summary close as a quick review of what they like best about the services.

They fail to match the summary close to the buyer’s specific situation, and then wonder why the client didn’t buy.

How to Do It
There are four separate steps to a successful summary close:
1. Introduce the close with a smooth tie-back statement. Say something like, “Tom, I realize we have covered many aspects of the like-kind exchange technique.

Why don’t we take a few moments and summarize the salient points?” With a good transition statement, you have prepared the client for the review.

2. Briefly reconfirm your prospect’s specific needs. You might say it like this: “Tom, you have a very low basis in the real estate you want to sell.

When you sell it outright, you will pay a substantial tax. What we are trying to avoid is paying all that tax right now. This is what you’d like to do, right?”

3. Summarize how the benefits of your features meet the client’s explicit needs. Some professionals use a T-account (summarizing the pluses and minuses for a decision on one sheet) so you and the client will agree on the pros and cons of making the decision.

4. Ask for the business using a direct request. When you have completed the summary, now it is time to close. You might ask something like this, “Our tax expert, Jeremy, is available to work on this next week. Shall I reserve his time for this project?”
Wrapping up
A summary close helps clients understand what you have to offer. And it helps build your profits by making the sale.

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If you are like most attorneys, consultants, and accountants, many of your clients utilize only a few of your services.

Too often, a client engages another professional to perform services that you could provide.

Cross-selling is when you sell a new service to an existing client. Cycle selling does this in a more complete and systematic way that can become an automatic way of increasing your business.

In a Weber State University study of why clients switched CPAs, the number one reason given for switching was that the CPA was not proactive in delivering services. You can be proactive in delivering services if you will adopt the cycle selling method.

Let clients know what you offer
You know that selling to existing clients is far easier and more profitable than developing a new client.

To ensure that you are providing all the services possible, take advantage of cycle selling.

For each client, maintain a listing of all your services, perhaps in the front of a permanent file.

Then, over a period of two to five years, present each service to your client. Keep notes of your actual conversations with the client and what resulted from your exchange.

This cycle selling concept is not a one-time only proposition; you should keep updating your list of services, and keep reviewing your capabilities with your clients year after year.

Your bottom-line strategy is to make sure that all your clients are aware of all your service capabilities.

Never Assume Clients Don’t Need Certain Services
And don’t overlook the services that fall into the category of “He (or she) will never need this.”

Instead, say something like this: “Mr. Jones, you may never have a need for the service I want to tell you about, but I would be remiss if you weren’t aware of all of our capabilities.”

You never know when this will create a referral to someone who does need the service.

And, by discussing services that you know won’t be needed, you remove sales pressure.

This builds into the relationship the expectation that you will share what you do with the client.

You can even use such discussions as a forum for soliciting advice about the service, or who would need it.

Your newsletter can also support cycle selling. Over time it can feature different clients benefiting from different services, but your personal presentations will have more impact.

Create a System
Present only two new services at a time. Most people are unable to absorb and retain much information at once.

Depending on many factors, you could present two services every three or six months. Develop a system to make it a natural part of your relationship building with each client and you will build your business along with client satisfaction.

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Recently, I was sitting with a client in a “chain” restaurant. Our waitress was well mannered, knowledgeable, and polite.

We enjoyed our salad, a fantastic steak, and a glass of wine. We were all quite satisfied.

At the end of the meal, as our waitress cleared away the empty plates, she asked, “Any room for dessert?” While the option was there, we did not (and could not) take her up on her kind offer. We paid and left.

What was missing, both for us as customers and for her as a service provider?
Yes, dessert was the key element that was missing – not because it was not offered – but because the offer came too late in the dinner.

Since we had not been thinking about dessert or mulling over in our minds the wonderful flavors of a soufflé, it was easy to say no.

The Art of Offering
For professionals, offering additional services to your client is similar to offering dessert. There is an art to success.

Successful restaurants, and professional service firms, offer dessert early in your dining experience.

Some have desserts tantalizingly displayed on a cart that you must walk by as you go to your table.

Capture my imagination and you will capture my willingness to engage you further. By sowing the “seeds of a need” early in the relationship, I am more likely to expand the engagement beyond the initial service needed.

On the other hand, if dessert is not offered, we would all be disappointed. We would think something is missing from our experience.

Your clients feel the same way. Have you ever had a client say, with an edge, “I didn’t know you did that”?

Imagine your disappointment when you later learn the client has done his estate planning with another professional, when he could have done it with you.

Dessert = Extra
But why is dessert so important? Because this is where higher levels of profit for you and the client exist but are rarely tapped.

In any fine restaurant, the chef will tell you that higher profit is made from dessert than the entrée.

It is cheaper to prepare and sells at a premium price. The analogy is equally important in any professional services firm.

Often, in the first year of a new engagement, little (if any) profit is made; however, if dessert (additional value-added service) is offered early in the relationship, the client is already presold and a premium price may be asked.

Summing up
Your clients are looking for “one-stop” shopping. Offering dessert is a way of maximizing profitability, enhancing relationships, and ensuring that your clients are left with a “good taste” in their mouths. Bon appetit!
 

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Pricing is one of the four Ps of marketing and is one that few professionals use. Accounting and law firm marketing has improved over the past 20 years in three of the Ps of marketing (place, product, and promotion). But pricing is still being done using cost-accounting techniques.

Limits of Hourly Billing
Most clients hate hourly billing and will be very willing to alter the way they work with you.

Ron Baker’s book The Professional’s Guide to Value Pricing is one of the more intelligent and informative books on the subject.

His is a foundational book, one that comes along at an important time: a time when people are looking for a new direction, when paradigms are shifting.

Some of your clients are quite willing to pay you more than your are receiving from them, but you are failing to maximize your profits.

For instance, there are people who choose to drive luxury cars, when more affordable transportation is available.

These same types of clients would pay you more if you designed a pricing system to capture what they are willing to pay for your results.

Other Fee Approaches
Commissions and contingent fees will become the norm within the next 20 years. But, there are alternatives to commissions and contingent fees.

To obtain higher pricing, you must focus more on providing value that clients want. The profitability to you and your client of various pricing methods will help you focus your attention on achieving both.

Using a fixed-price agreement combined with a change order system is one method we can all use to improve our pricing.

Spelling out what you will and won’t do for your fixed price is the essence of a fixed-price agreement.

Items not covered in the agreement are changes, just as your builder does with your home as it progresses.

Wrapping up
If you bill by the hour, to make more money you have to work longer hours. If you bill by value delivered, you have the chance to make more income, and focus on client satisfaction.

For instance, one firm specializes in “Starker” exchanges of real estate. (People avoid taxes by trading one investment property for another, without having to make the trade themselves.)

Fees for changing a $1,000,000 taxable event into a tax-free transaction are based on the expertise involved, not on the hours.

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A key marketing technique used by some top firms is the client business review (CBR). The CBR is used only on the firm’s “top 25” accounts, defined by the total size of the annual fees, referral potential, or other criteria.

The CBR takes a business consulting approach to understand and evaluate the systems of your clients.

The CBR usually requires about 20 hours per client and is done about every two years. Clients whose businesses are rapidly growing or changing may warrant a more frequent CBR.

Building Client Loyalty
If there is a question of loyalty, during the CBR the client will give you an opportunity to cure the problem, long before they tell you competitor.

One attorney said, “But what if I bring up an issue where the client had not been unhappy until I mentioned it.”

It’s better than this issue surface with you than your client bring it up with your competitor! When you hold a CBR, you will thwart most competitive advances on your territory.

Your Return on Investment
There are many additional benefits associated with a CBR. It is a way to train staff to market to clients.

Well-trained staff can perform the CBR on second-tier “top 25” clients with less partner and total time invested.

A CBR will increase the satisfaction level of a client from “satisfied” to “delighted.” And, delighted clients are the ones who provide the best referrals.

The payback on the CBR program is consistently 5:1, whereas that with the new client sales program is about 2:1.

In almost every situation, you will come away with a project on which significant fees can be generated.

The cross-selling opportunities are endless. Additionally, the CBR program is protecting the large percentage of your fees (over 50%) from your key clients. Your new client marketing program starts each year at zero.

Most of the CBRs are performed during your slow periods, so that the real out-of-pocket investment is usually only the cost of lunch.

So on a $20,000 client, a 6% marketing investment (about $2,400 in time) is made and on a $150,000 client, a 1.6% investment is made (done every year).

Summing up
Doing a client business review with your best clients will elevate your level of service so that you can make a contribution to your client’s business and organizational decisions.

When you make an impact in this manner, you will protect your client loyalty and improve your realization rate.

When you can help your clients achieve their strategic and financial goals, you become an indispensable part of their team.

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On a plane from Orlando to New York, I sat beside a meeting planner for PricewaterhouseCoopers. She told me a story that bears repeating.

The meting planner had asked the catering department at Disney World to prepare an event for the PwC partners.

Disney’s caterer priced the affair at $50,000. But the meeting planner’s budget was $35,000. Disney dropped its price.

Later during the event, the PwC meeting planner noticed that every item in the original event was included in the program.

She mentioned this, with great appreciation and astonishment, to the Disney caterer. His reply was, “Disney may reduce our price, but we never will reduce our service.”

Clients Who Pay Less
How do you handle clients who cannot pay your first-class price? Many times, I have observed these clients receiving second-class pricing and third-class service.

Often, partners and others resent the discounts afforded some clients. Discounting and resentment often lead to a downward spiral or service and even greater discounts or to unhappy and lost clients.

You would be better off avoiding low-class service to any client. The undertone of resentment by the partner and staff will be transmitted to your client personnel in many ways.

Slower phone call returns, slower reporting, lack of a management letter, and yearly staff turnover occur when you resent your lower fees.

How to Serve Budget Clients
A better approach would be to provide the same excellent service to your budget paying clients as you do to your first-class ones.

But, how can this be possible? “Everyone cannot be treated like my number one client,” you may say.

The way to make this work is to create trade-offs with your discounted clients. For example, determine if the work can be performed during a period of your year when a premium is not charged.

Determine if the work can be staffed and managed by a lower billing rate individual. Determine if the work can be a joint venture with another firm, so you can spread the discount.

Commit to first-class service for all your clients: meeting your promised deadlines, promptly returning phone calls, making unsolicited visits and phone calls, maintaining continuity of staff, and providing management recommendations to your discounted clients.

If you cannot make money on a client, it may be better to not serve the client than to give them second-class service.

Wrapping up
I have witnessed numerous discounted clients willingly increase the fee structure when high quality is received.

After all, before they started, they didn’t know what to expect, and thus were cautious about costs.

Most clients leave firms because the value and level of service is not up to the pricing. Don’t let yourself fall into the downward service spiral of some professionals.

Use the Disney motto, “We may reduce our price, but we will not reduce our level of service.”
 

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The client satisfaction survey is one of the most misused marketing tools employed today. Most surveys fail to obtain reliable information. Even worse, many surveys obtain misleading information.

The single most important reason to perform a survey is to determine client intentions. What your clients say doesn’t always equal intentions.

A few years ago, in a focus group, Sony Corporation asked teenagers which color of boom box they would prefer? Black or yellow? The overwhelming response was yellow.

At the end of the three-hour session, the teens were told they could pick up their choice of a free boom box as a gift for participating in the focus group.

The overwhelming choice was black! The key to client intention is not what people say, it’s what they do.

Ask Questions that Deal with Client Intentions
Following are a few ideas to improve your use of client surveys so the information you receive is more reliable and useful:

• “Will you come back to us for your next need?”
• “Have you or will you refer us?”
• “Would you use us for other services?”

Use questions like these to reveal client intentions.

Design a Competent Survey Methodology
Professionals who understand anything at all about statistical sampling realize that a 35% response rate from clients probably does not reflect the true responses of your client base.

Were the responses from your best clients or your worst clients? Were the responses completed by decision makers or influencers of your clients?

Use a methodology that will give you reliable feedback on your most important clients.

Personal or telephone interviews of your largest clients will receive a much higher percentage response rate than mail surveys.

If you insist on using a mail survey, at least send a gift to reward your client for completing the questionnaire for you.

Ask Yourself, “Should We Do a Survey?”
If you do business with a limited number of clients and send them a survey every year, you will create survey burnout.

If your clients have a complaint about your service, your people, or you’re billing methods, many will not want to put it in writing.

You may be better off to visit your clients individually and explore their perceptions in-depth.

All clients’ comments are not created equal. But in a typical mail survey, a $300 tax return client’s responses receive the same weight as a client who pays you $100,000 per year.

Wrapping up
Surveys offer little chance of discovering anything unexpected over and above the topics being queried.

The problem with this is that your own thinking contaminates and limits the thinking of your clients.

Surveys can be useful tools to help firms grow and respond competitively to the marketplace. But to gain new information, you must be careful to design a process that will give you useful and reliable information.

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When a new CEO, COO, CIO, or CFO joins your client, your relationship may be at high risk.

Smart professionals never take a client for granted, but they are particularly sensitive when there is a change in top management.

In many cases, the new chief will not know you and probably will have some level of loyalty to another firm. Your key is to make life easier for the new chief.

Be Proactive
If your first reaction is to lay low, or to wait for the new chief to call you, this is the wrong approach.

You should be proactive in building communication links. Your first role is to educate the new chief by reviewing the services your firm has provided the client.

Show how you have had an impact on past cost savings, legal structure, business success, or other significant events.

It is good insurance for you to review the past while emphasizing the reasons why you should continue.

Most new chiefs will bring new ideas, new initiatives, and a new team to their new roles.

Some chiefs’ approaches may be radically different from their predecessors. So, you don’t want to represent the “old way.”

If you have had significant management or internal control recommendations, bring them up early in the new chief’s tenure.

Increase Communications
Professionals who have weathered management changes offer some good suggestions:
1. Begin to mentally prepare your next proposal to your client. If the new chief has a relationship with another professional, they are probably asking for an opportunity. You would do this if one of your best friends took over a new client.

2. Don’t assume that business will go on as usual. You must give more attention to the client’s personnel with whom you have worked.

You may be asked to alter your services package to suit a new direction for your client. It will be better for you to be a part of this planning process, if you can engineer it.
3. The quickest way to alienate a newcomer is to act superior or overconfident. Treat the new chief with great respect. You must recognize the new chief’s ability and stress your wish to serve in the new environment.

When Family Members Become the Chief
The time to build relationships with family members who may become the chief is months or years before they are promoted.

Often, successful CPAs have built strong relationships with the elder chief and avoided the children.

Meanwhile, the children are forming their own relationships. Perhaps, now is a good time to focus attention on the sons and daughters of your client’s owners.

Wrapping up
A change in leadership is a time of both danger and opportunity. If you are mentally prepared and build your relationships broadly within your client firms, you will be better positioned.

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