If you ask any successful CPA, EA, bookkeeper or tax professional who’s been around for a long time about how they grew their tax and accounting practice, most will give the same answer:
Referrals. In the marketing world, we call this class of tactics “word-of-mouth” — and it’s generally known for being challenging to earn, quantify, and count on if you seek more than single-digit growth. That being said, referrals have always been a major cornerstone of the tax and accounting industry. Word-of-mouth for professionals who offer high quality and value to their clients is generally more attainable (and consistent) than within other fields of work. But has that changed? In this post, we’ll explore how the referral pipeline has changed for tax and accounting practices, and discuss whether you should be relying solely on word-of-mouth marketing to attract new clients and grow your firm. There are firms growing 25, 35, and even 50% by integrating new pipelines into their marketing plan.
Referrals: The Status Quo
Let’s put ourselves in the shoes of a legacy practice owner — perhaps one who has been in business for 20 years or more. When you started out as a new practice, you may have found new clients within the set of personal connections you already had. From there, satisfied clients probably referred you to their own friends and family who were looking for a trustworthy professional. People would ask around if they needed help with something, and if someone told them that you were a good pick, they’d probably take their friend’s word for it. Things have changed. Sure, people still ask for personal recommendations all the time — and it’s highly possible that many of your new clients still come to you as referrals. That’s great news, and it’s important to continue satisfying your current clients so they’ll be your built-in, enthusiastic word-of-mouth marketers.But there’s a new middleman: The internet.
The Interrupted Referral Pipeline
Even if someone was referred to you by a trusted source, they will probably still search for you online before contacting you directly. When they do look you up, what will they find? In the digital age, your online presence and reviews matter. They are intertwined with referrals to the point that there is no separation anymore — and you need both to be successful. If your digital presence and reviews aren’t stellar (or are completely non-existent), then the referral process is immediately interrupted and they will probably choose not to take the recommendation.
The first thing people do when searching for you online will likely be to analyze your reputation. Don’t have any reviews available for them to read? With endless information available through a simple Google search, you can be sure they’ll find someone else who meets their needs and has plenty of five-star reviews on important sites like Google My Business, TaxBuzz, and CountingWorks.A 2019 local consumer review survey by BrightLocal found that 76% of all people — and 89% of 35-54-year-olds — trust online reviews as much as recommendations from family and friends. So, while you may already receive plenty of referrals from your satisfied clients, it’s important to ask that they also refer you publicly in another way: by writing reviews for your practice online.
It’s not just your reviews that make up your online presence: other factors like social media, your website, blog content, and more will also have major effects on how you are perceived by prospects. When you prioritize building up this digital presence, you also ensure that your practice growth isn’t stunted by reliance on personal networks. Word-of-mouth marketing is a vital part of any service-based business, but it’s also limited in reach. Whereas your online presence can be accessed by anyone, anywhere, at any time, referrals are limited by how much your clients feel like talking about you to their friends and family. Plus, you are in charge of your online presence. You can ensure your website is built professionally and conveys the exact message you choose. You pick the content that is posted to your social media. You write (or outsource) the relevant articles for your blog. What other people say about your practice (aka via word-of-mouth) is not up to you, so make sure you’re optimizing the channels you do have control over.
Use Word-Of-Mouth — Just Don’t Rely on It
This is what it comes down to: word-of-mouth marketing is highly valuable to service-based businesses like tax and accounting practices. You should by no means halt your efforts to earn referrals from current clients. That being said, depending on word-of-mouth marketing is one of the biggest mistakes a practice can make in the digital age. The referral pipeline has been disrupted, and understanding the role of reviews and online presence in growing your client base is essential to your long-term success. Enhancing your word-of-mouth marketing efforts by prioritizing a five-star reputation and impressive digital presence is a well-rounded approach to sustainable practice growth. Adding a process to attract and convert web referrals can dramatically change your growth and profit projections. A marketing system that is scalable will out-deliver the slower one-by-one referral process.
If you have any questions or would like to learn more about supplementing your referral strategy, contact us today at 1-800-442-2477 x3 or set up some time to speak with one of our digital marketing experts. We’re here to help!