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The risks and rewards of new referral sources (and recipes)

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By Art Kuesel
December 2, 2013

The other day I was in the mood for something new and different for dinner. Yes, Colleen and I have dozens of favorite stand-by recipes and restaurants in any number of categories, but nothing “known” sounded good. I needed to find something different that could satisfy my palette in a new way.

 \At the same time, I was concerned that what I made could have fallen short of expectations and been just another average dining experience. But if I never tried anything new, how could I have built such as vast list of known favorites? I decided to take a risk, strike out into the unknown and try to find another “favorite” recipe.

Well, the risk was worth it and I was rewarded. I found another favorite! Paula Deen’s Maple and Mustard Glazed Salmon. It’s simply delicious, and is easy to make, too.

Now let me ask you, how many “favorite standby” referral sources do you have in your network that produce a constant stream of high-quality referrals for you? Most accountants I know with don’t have more than a handful – and frankly it’s not enough. Let’s say you have four favorite referral sources and each sends you a nice client once a year. That’s only four referrals a year. You lose more than four clients a year and assuming this is your best source of new business, you’re starting the year in the hole.

Now, I know it’s easier to stay within your comfort zone and simply return to this small population of people because they are known quantities for you and it is a low-risk proposition. But, if these referral sources were dinner recipes, you’d be repeating recipes by Wednesday! I hope you agree that it’s time to expand your rolodex (recipes and referrals).

With competition at an all-time high, in most cases your current population of safe and known referral sources is simply not enough to grow a practice. You need more referral sources to fuel more referrals and that involves a level of risk. The risk is that you invest time networking, meet someone, following up, and following up again only to determine they aren’t a real match for you or your practice.

However, the reward is that you’ll eventually develop a relationship that begins to bear fruit and becomes a new “favorite.”

For about 80 percent of my coaching clients, finding new referral sources is a top priority. And the easiest place to start is actually within your own client and referral network. You should know every attorney and banker who serves your top clients. If you don’t, ask your clients for an introduction. Chances are, if you have one client in common, you should have others as well. Then go to your favorite referral sources and ask them who else is in their network that you should know. Chances are, these two sources can keep you busy meeting new people for months.

Eventually, with consistent effort, you’ll find a referral source that has favorite status, and will produce for you on a regular basis. When you think you’re done finding new favorites revisit my recipe analogy. How many days can you go before you repeat a recipe? Four days? Keep working it. A week? Not bad, but you can do better. Two weeks? Now we’re talking!

1 Comments

Referrals are indeed important and should be a top priority,as you mentioned. I believe it is the best way businesses have to keep their head above water and I am going to do all I can to get referrals coming into my Tax business. Thank you for your informational article.

Posted by: citysmitty | January 14, 2014 7:25 PM

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