Grassi: We get referred clients through a variety of sources.  Existing clients are often the best source of referrals.  As a satisfied client, they provide the best advertising.  They know you, trust you and can vouch for the value you offer.  For our firm, bankers are another very strong source of referrals. We've developed excellent relationships with most of the major banks in our region and they frequently call upon us for advice. In fact, we have gotten clients because the client wanted a loan and the bank was reluctant to issue a loan based on the statement prepared by the client's existing accountant. When we get brought in to those types of situations, that is ideal because we come pre-approved in a sense.

We also receive a large amount of referrals from surety bonding companies because we have a very well established construction practice.  Attorneys are another major referral source for our firm, specifically for forensic and litigation matters.

Advisor: Are referrals influenced by the service your firm will offer?

Grassi: Yes, we often are able to convert a referral into a client because of the quality of the service and the variety of services we offer.  As a full-service regional firm, we are able to offer much of the breadth and depth of service that the larger firms are, but at a more reasonable price and with a higher level of personalized service.  These concepts are a part of how we market and sell the firm and have proven effective.

Advisor: Please describe how your firm encourages referrals from the various sources.

Grassi: I have read marketing research that indicates that when it comes to referrals people fall into three categories:  those who willingly give referrals without any prompting; those who generally do not give referrals; and those who would give referrals but don't think about it unless they are asked.  Our strategy is to try to tap into the one third that would give referrals if only they were asked. 

To that end, we have an ongoing program to ask clients for referrals on a quarterly basis. We also cultivate relationships with our referral sources (bankers, attorneys, sureties) by holding seminars and programs where our team gets in front of them with information about changes in the accounting rules or tax updates, etc.  This continues to enhance our relationships with these important contacts and keeps us top of mind so when an opportunity comes up, they are more likely to think of our firm. 

We know who our clients do business with and we may ask them for an introduction to a vendor they do a lot of business with.  They may not have a need to change accountants today, but by having a preliminary meeting, getting in front of them and making a good impression, they are more likely to think of our firm when they are ready to make a change.

Advisor: If your firm is aware of a referral being made, does your firm ever initiate contact with the potential new client? 

Grassi: The ideal way to handle it is by having the referral source speak with the potential client, pre-sell you and your qualifications and then encourage the prospect to call you directly. It doesn't always work that way, so we will often initiate the contact as well.

Advisor: Is there formal training of firm members on referrals? If so, please describe. 

Grassi: This past year, we started a program of business development training and had a section of the course deal with how to solicit referrals, how to follow-up on referrals and how best to cultivate referral relationships.  Everybody has their own style, but by trying to introduce some standardized techniques and getting everyone involved, we have been able to improve our overall success rate. 

The hardest part about it is getting people out of their comfort zone.  Most people feel a little uncomfortable asking somebody for something.  However, my experience is that people you have relationships with will generally want to help you if they can. You just have to ask.  You also must look at the worst case scenario. They may say "no."  But if you don't ask, you'll never get a "yes."

Advisor: Can you explain any compensation system in place for firm members who help generate a referral?

Grassi: Tying referral development into compensation is vital to your success.  Partners at the firm are compensated based on a variety of factors, including new business development performance, but are not directly compensated for a specific referral.  It's more of an aggregate and people can receive credit for generating the referral and also for helping to close the business.  We set overall goals for them and certainly any referrals they generate that result in business count toward those goals.

For staff below the partner level, there are fee-sharing arrangements for a referral generated by that person; a certain percentage of the fees collected are paid back to the person who got the referral.

It is great to have this type of compensation plan in place however, without the proper training and support system at the firm, the compensation plan alone will not succeed.  The compensation plan is the incentive; our sales training program gives people the tools and resources to ask for and get the referrals.

Advisor: Do you have a tracking system in place when you find out a referral has been made?

Grassi: Yes we do.  We discuss these opportunities at our sales meetings and keep track of where our referrals are coming from so we can continue to stay close to those people.

Advisor: Is there anything else you like would to get across about the art of referral development?

Grassi: It's just an ongoing process and people need to be committed to continuing to seek out and ask for opportunities.

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