Referral Marketing for Accounting Firms: Get Consistent Leads
Running your own accounting firm means you run a business.
And like every business owner, you understand the importance of having a steady stream of incoming clients to keep things moving and be successful.
But in today’s increasingly competitive landscape, your ability to attract and retain customers is paramount. And one of the most effective tools available for generating new clients is Referral Marketing – not only does it result in more conversions but also helps you build trust and credibility among your customers.
If you want to unlock growth within your accounting business, then a well-defined referral program can be invaluable.
Read on for insight into how creating an effective referral marketing campaign will help your accounting practice expand its customer base and foster long-term growth.
Table of Contents
What is Referral Marketing for accounting firms?
Referral marketing is a concept that relies on word-of-mouth recommendations to generate new business.
By incentivizing existing customers to share their positive experiences with friends and family, referral marketing can be an invaluable tool for building relationships as well as driving conversions.
In the case of accounting firms, referrals are especially valuable because they provide an opportunity to quickly build trust and credibility with individuals who might be considering hiring an accountant.
Benefits of referral marketing for accounting firms
Referral marketing is a great way to grow your accounting practice. It offers several advantages that can make acquiring new clients easier. wHere are five key benefits:
1. Credibility and Trust
When a referral comes from a satisfied client, it carries an inherent level of trust and credibility. Prospective clients are more likely to trust a firm that comes recommended by someone they know and respect, as opposed to finding a firm through an advertisement.
2. Higher Conversion Rates
Referrals often lead to higher conversion rates. Since referred clients already have a positive impression of your firm, they are more likely to engage your services. It’s essentially a warm lead, rather than a cold one.
3. Cost-Effective
Referral marketing is often more cost-effective than traditional advertising methods. It doesn’t require a significant investment, making it ideal for small or growing accounting firms that may not have a large marketing budget.
4. Better Client Matching
Clients who understand your services are more likely to refer businesses that are a good fit for what you offer. This can help you attract the kind of clients you want to work with, and who are more likely to maintain a long-term relationship with your firm.
5. Increased Client Retention
Studies have shown that referred clients are more loyal and have a higher lifetime value. Since they were referred by someone they trust, they’re likely to stick around for longer, ensuring a more stable client base for your accounting firm.
Who to Ask for Referrals in Accounting?
Satisfied Clients
These are the most common sources of referrals. Clients who’ve had a great experience with your services are often happy to refer others.
Whether they’ve benefitted from your tax-saving strategies or have streamlined their business accounting because of your guidance, these are the people who’ve seen firsthand the value you bring. And most of the time these are the people who you’re more likely to be asking referrals from anyway and that would bring you the best referrals.
Other notable sources you could seek referrals from could include; Business Associates, Professional Organizations, Vendors and Advisors, etc.
When is the Best Time to Ask for Referrals?
When it comes to asking for referrals, timing is very important. Ask at the wrong time and you could ruin your chances of getting a great referral.
To avoid that, let’s look at some of the best times to ask for a referral
1. After Delivering Value:
The most opportune time is right after you’ve provided significant value or solved a pressing problem for a client. If they express satisfaction or gratitude, leverage that moment.
2. End of the Financial Year:
As the fiscal year wraps up, businesses assess their financial performance. If you’ve assisted a client in achieving their financial goals or helped them save on taxes, it’s a golden moment to request a referral.
3. During Regular Check-ins:
If you have regular check-ins or meetings with clients, subtly weave in a conversation about referrals. You can inquire if they know someone who might benefit from similar services.
4. Special Occasions:
Sending holiday cards or anniversary emails celebrating your association can be a gentle reminder, inviting them to refer others.
Proving the ROI of Referral Marketing for Accounting firms
Although referral marketing can be a powerful tool for generating more qualified leads and driving conversions, but it is also important to consider the return on investment (ROI) of any referral program you create.
Fortunately, there are ways to track and measure the success of your referral efforts so that you can identify which strategies are working best for your business.
A good formula to help with this is…
ROI = (Net Profit from Referral Marketing / Costs of Referral Marketing) x 100%
Where…
1. Net Profit from Referral Marketing refers to the total revenue generated from customers who were acquired through your referral marketing efforts, minus the costs associated with serving those customers. It represents the actual earnings, post-expenses, which can be attributed directly to the referral marketing initiative.
- Total Revenue from Referral Marketing = Total sales or contracts signed as a direct result of referral leads.
- Costs associated with serving those customers = This includes any expenses directly related to the delivery of your service or product to the referred customers (e.g., costs of goods sold, service delivery costs).
Net Profit = Total Revenue from Referral Marketing – Costs associated with serving those customers
2. Costs of Referral Marketing encompasses all expenses tied directly to running and promoting your referral program. Such expenses might include:
- Costs of software or tools used for referral tracking.
- Expenses associated with creating promotional materials for the referral program (e.g., graphic design, printing).
- Incentives or rewards offered to those who refer customers (e.g., discounts, gift cards, commission).
- Any additional promotional or advertising costs tied to the referral program (e.g., ads promoting the referral scheme).
An Example:
Suppose an accounting firm invests $2,000 into their referral program, including software, incentives, and promotional materials. Over a given period, this program results in $10,000 of revenue. The costs associated with serving these referred clients amount to $3,000.
Net Profit from Referral Marketing = $10,000 (Revenue) – $3,000 (Service costs) = $7,000
Costs of Referral Marketing = $2,000
Using the formula:
ROI = ($7,000 / $2,000) x 100% = 350%
This means for every dollar spent on the referral program, the firm earned $3.50, making the initiative highly successful.
The beauty of the ROI formula is its universality; it can be applied to virtually any marketing or business initiative to gauge its financial effectiveness.
By utilizing software and tools that offer referral tracking such as Ambassador, ReferralCandy, Yotpo, Referral Hero, etc. You can easily measure the success of your campaigns and make adjustments as necessary to ensure maximum ROI.
How to ask for referrals from existing clients
Do you cringe whenever you think of asking for a referral from a client?
Trust me, we know that feeling too well. Asking for referrals from existing clients can feel a little awkward at first, but with the right approach, it becomes a natural part of your client relationships.
Let’s show you a very effective way of doing it.
1. Ensure Client Satisfaction
Before asking for a referral, make sure your client is happy with the service they’ve received. Satisfied clients are more likely to recommend you to others. You can gauge their satisfaction through their feedback, their willingness to engage with you, or even through a formal satisfaction survey.
2. Identify the Right Moment
The best time to ask for a referral is after you’ve provided value to your client. This could be after a successful audit, once tax season is over, or when you’ve helped them streamline their payroll system.
3. Be Direct
During a conversation with the client, express your interest in growing your business. Let them know that you’ve enjoyed working with them and would like to help others like them. Ask if they know anyone who could benefit from your services.
4. Use Email
An email can also be an effective way to request referrals. Craft a friendly, professional email expressing how much you’ve appreciated working with them and that you’re looking to help more clients like them. Include clear instructions on how to refer others to you.
5. Offer a Referral Program
Incentives can motivate clients to refer others. Consider creating a referral program that offers a discount or a special service for each successful referral.
6. Make it Easy
The easier it is for your clients to refer you, the more likely they are to do it. Provide them with a simple way to share your contact information, like business cards or a link to your website.
7. Show Gratitude
Whenever a client refers someone to you, show your appreciation. A simple thank you note, a phone call, or a small gift can go a long way in maintaining a positive relationship with your client.
Not every client will have someone to refer right away, and that’s okay. The key is to keep the lines of communication open, consistently deliver great service, and keep reminding them that you’re here to help anyone they know who might need your services.
The benefits of utilizing referral software for accounting firms
As great as referral marketing is it can be a pain if you have to do it manually for every satisfied client especially, if you have a large or growing client base. This is why using a referral marketing tool is highly advised.
A referral marketing tool is a type of software that helps businesses automate and manage their referral marketing efforts.
The goal is to encourage existing customers to recommend your accounting services to their friends, family, or professional network, thus bringing in new customers.
A good referral marketing software can help you measure the success of your campaigns and ensure that each referral is providing maximum ROI. It can also automate aspects of the process such as rewards or incentives for referrals, allowing you to focus more on building relationships with customers.
Furthermore, referral software can provide detailed reporting and analytics that will help your business better understand the effectiveness of your strategy and make necessary adjustments.
How does a referral marketing tool work?
Here’s a step-by-step process of how a referral marketing tool typically works:
1. Integration: The first step is to integrate the referral marketing tool with your existing business systems, such as your CRM or email marketing software. This allows the tool to track referrals and reward customers accordingly.
2. Referral Program Setup: Next, you set up your referral program. This could be a simple “refer a friend and get a discount” scheme or something more complex. The tool will generate unique referral codes or links for each of your customers.
3. Distribution: You distribute these referral links or codes to your customers. This could be done through email, social media, or directly in your product or service.
4. Tracking: When a customer shares their unique link or code and a new customer signs up or makes a purchase through that link, the tool tracks this action.
5. Reward Distribution: Once the tool confirms the new customer has met whatever conditions you set (such as making a purchase, signing a contract, etc.), it triggers the reward for the referring customer. This could be a discount, credit, or any other reward you’ve set up.
6. Analytics: The tool also provides analytics so you can see how many referrals you’re getting, who your top referrers are, and other useful data. This can help you optimize your referral program over time.
Now that we know this, let’s have a look at a few examples of referral marketing software out there that you can use in your accounting firm to boost and track your referrals.
Must Read – Marketing For Accountants – 22 Proven Ways For 2X Growth in 2023
Examples of Top Referral Marketing Software for Accounting Firms
Here are 3 great examples of referral software worth considering
Referral Hero
ReferralHero is a referral marketing software that helps you create and manage referral campaigns that generate more word-of-mouth sales. You can use it to build pre-launch campaigns, ambassador programs, giveaways, and more1. You can also integrate it with your existing marketing funnel and tools.
The benefits of using Referral Hero are:
- You can increase your referrals by rewarding your customers and partners for spreading the word about your accounting services.
- You can track and measure your referral campaigns with detailed analytics and insights.
- You can customize and optimize your referral campaigns with gamified elements, widgets, templates, and third-party integrations.
- You can get support and guidance from technical marketing consultants who can help you set up your ideal referral campaign.
How to use Referral Hero:
- Sign up for ReferralHero and create your referral campaign.
- Customize your referral campaign by adding your branding, messaging, rewards, and rules.
- Set up your referral tracking by generating unique referral links for your customers and partners.
- Promote your referral campaign by sharing your referral links on social media, email, SMS, or other channels.
- Track and measure your referral campaigns with detailed analytics and insights provided by Referral Hero.
- Optimize your referral campaigns by testing different rewards, messaging, and channels to see what works best for your accounting firm.
Referral Candy
ReferralCandy is a software that helps you create and manage referral programs to acquire new customers through word-of-mouth.
Some of the benefits of using it are:
- You can reward your customers for referrals and increase your sales and shares.
- You can integrate ReferralCandy with your existing tools and marketing funnel.
- You can track and measure your referral campaigns with detailed analytics and insights.
- You can access 24/7 customer support and technical marketing consultants.
How to get started with Referral Candy:
- Sign up for ReferralCandy and connect it to your eCommerce platform. You can choose from various integration options such as Shopify, WooCommerce, BigCommerce, Magento, ReCharge, or custom API.
- Customize your referral campaign by choosing your referral reward type and friend offer type. You can also set the reward amount, expiration date, minimum purchase amount, and other rules for your referral program.
- Promote your referral campaign by using the referral widgets and tools provided by ReferralCandy. You can also edit the social media messages and referral emails that your customers will receive and share.
- Track and measure your referral campaign performance with the analytics dashboard provided by ReferralCandy. You can see your referral revenue, traffic, conversion rate, and other metrics.
- Optimize your referral campaign by testing different rewards, messages, and channels to see what works best for your accounting firm. You can also enable a purchase review period to prevent fraud and abuse.
Ambassador
Ambassador is a software that helps you create and manage word-of-mouth marketing and customer loyalty programs. You can use it to incentivize your customers, partners, and influencers to refer your accounting services, products, or courses to their networks.
The benefits of using Ambassador are:
- You can cut your acquisition costs and increase your customer lifetime value by leveraging the power of word-of-mouth and loyalty.
- You can integrate Ambassador with your existing tools and marketing funnel.
- You can track and measure your word-of-mouth and loyalty campaigns with detailed analytics and insights.
- You can access 24/7 customer support and technical marketing consultants.
Here is a simple step-by-step guide on how to use Ambassador:
- Sign up for Ambassador and create your referral campaign.
- Customize your referral campaign by choosing your referral reward type and friend offer type. You can also set the reward amount, expiration date, minimum purchase amount, and other rules for your referral program.
- Promote your referral campaign by using the referral widgets and tools provided by Ambassador. You can also edit the social media messages and referral emails that your customers will receive and share.
- Track and measure your referral campaign performance with the analytics dashboard provided by Ambassador. You can see your referral revenue, traffic, conversion rate, and other metrics.
- Optimize your referral campaign by testing different rewards, messages, and channels to see what works best for your accounting firm. You can also enable a purchase review period to prevent fraud and abuse.
Must Read – Performance Marketing For Accounting Firms
How to effectively promote your referral program
Now let’s take a look at a practical example to help with promoting your referral program.
Let’s consider an accounting firm, Stellar Example Accounts LLP, that has just launched a referral program. Here’s a practical illustration of how they can effectively promote it:
1. Announce to Existing Clients
Email Campaign: Start by sending an introductory email to your existing client base. Ensure the email:
- Has a catchy subject line like “Earn Rewards with Stellar Example Accounts!”
- Explains the benefits of the program both for the referrer and the referee.
- Provides clear instructions on how to participate.
- Includes visuals, such as infographics, that summarize the process.
In-Person: During face-to-face meetings or consultations, mention the referral program to clients and provide them with referral cards they can hand out.
2. Leverage Social Media
Regular Posts: Share information about the referral program on all your firm’s social media platforms – LinkedIn, Facebook, Twitter, etc.
Client Testimonials: Share success stories or testimonials from clients who have benefited from your services. A narrative can be compelling, and adding a note about the referral program at the end can be effective.
3. Optimize Your Website
Dedicated Landing Page: Create a separate page on your website detailing the referral program. Ensure it’s easily accessible from the homepage.
Pop-ups: Use subtle pop-ups or banners to inform visitors about the referral program.
4. Provide Referral Materials
Printed Brochures: Create informative brochures about your referral program. Clients can share these with friends or colleagues.
Business Cards: Alongside standard business cards, create referral cards with a brief overview of the program and how the referred client can get in touch.
5. Host Webinars or Workshops
Organize webinars or workshops on topics relevant to accounting. At the end of the session, introduce your referral program to attendees, explaining the benefits and the process.
6. Offer Incentives
Promote the rewards for referring clients prominently. Whether it’s a discount on future services, a gift card, or another perk, make sure it’s appealing to your clientele.
7. Regularly Update and Engage
Newsletter Updates: Use your regular newsletter to provide updates on the referral program, perhaps highlighting a “referrer of the month” or introducing new incentives.
Feedback: Ask for feedback about the referral process from those who have referred clients. Use this feedback to make improvements and showcase that you value client input.
8. Local Community Engagement
Local Events: Sponsor or attend local events and use the opportunity to promote your referral program. Engaging with the local community can help spread the word faster.
Local Media: Use local newspapers or radio stations to advertise your program. A small advertorial can help reach an audience that’s not online-focused.
9. Partnerships
Collaborate with businesses that offer complementary services. For example, partner with a local law firm where both parties can refer clients to each other. Promote your referral program within these partnerships.
10. Employee Training
Ensure that all employees are well-versed with the details of the referral program. They can act as ambassadors, promoting the program during their interactions with clients.
How to track the effectiveness of your referral program
Key Performance Indicators (KPIs) are essential for monitoring the effectiveness of your referral program.
Here are some important KPIs you should track:
1. Number of Referrals: This is the total number of referrals made through the program. It provides a direct measurement of how engaged your customers are with the referral program.
2. Conversion Rate: This measures the percentage of referrals that turn into actual customers. A higher conversion rate generally indicates that the referrals are high-quality.
3. Referral Revenue: This is the total revenue generated from new customers that have been referred.
4. Average Order Value (AOV) of Referred Customers: This KPI measures the average amount of money spent by referred customers. Comparing this to the AOV of non-referred customers can give you an idea of the value of your referral program.
5. Lifetime Value (LTV) of Referred Customers: This metric measures the projected revenue that a customer will generate during their lifetime with your company. If the LTV of referred customers is higher than non-referred customers, your referral program is likely very successful.
6. Referral Program Participation Rate: This is the percentage of your customers who have participated in the referral program by sharing their referral link or code.
7. Cost Per Acquisition (CPA) of Referred Customers: This measures how much it costs you to acquire a new customer through the referral program.
8. Time to Conversion: This measures how long it takes a referral to become a customer after the referral was initially made.
9. Churn Rate of Referred Customers: This measures the percentage of referred customers who stop doing business with you over a certain period of time.
10. Net Promoter Score (NPS): This measures customer loyalty and satisfaction. An increase in NPS can be an indirect result of a successful referral program.
By monitoring these KPIs, you can determine the effectiveness of your referral program, identify areas for improvement, and adjust your strategy as necessary.
Conclusion
Referral marketing gives accounting firms the growth power they need to move from traditional methods of advertising and lead generation to more effective, cost-efficient customer relationship strategies.
It provides a direct connection between clients and prospects. When leveraged properly, referrals can fuel organic marketing pipelines and potentially increase client base.
It’s important that you get started on a referral program sooner rather than later in order to gain an advantage from other competitors in the field and take full advantage of this powerful tool for unlocking growth.
Thanks for sharing this post, it is very helpful article.