CPA Practice Management Forum – August 2006

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Successful relationships with referral sources are built the same way successful personal relationships are built: slowly. It takes consistent, personal contact over a long period of time. Think years and decades, not months.

When getting started, there is no room for shyness, and little reason for it: Experts say most professionals will welcome your attempts to initiate a referral relationship. Start with the easiest group: other professionals who serve your clients. From there, your network hopefully will expand to their referral sources and beyond.

Look also to sources you may not have thought of, and make sure you follow up with your contacts to keep yourself in their sights and on their minds. Put your expertise to work building a network with other experts, and make sure you offer as much help as you receive.

Make the first move

Remember, first, that building referral networks takes time. “When you talk about which contacts are going to general leads and new business, that’s going to be a long process,” says Jean Caragher, president of Capstone Marketing/Chesapeake, Va.

Start with your clients’ other services providers. Who are your clients’ bankers, attorneys, investment professionals and insurance agents? Don’t know? Ask your clients.

“Those are the easiest people for CPAs to start with because they have clients in common,“ Caragher says.

When you contact those professionals, let them know you would enjoy meeting them, that you have clients in common and would like to learn more about their businesses. Calling someone you’ve never met is intimidating for many accountants, but when it’s done in the spirit of networking, there’s no need for anxiety.

“All of these people know they need to be out there networking and generating leads,” Caragher explains. “You don’t need to disguise your purpose in calling. If you’re initiating the meeting, you’re making their job easier.”

When you meet with professionals, be sure you can describe to them the type of business you are looking for so you don’t receive inappropriate referrals. Caragher advises listing the size of clients you prefer, the niches you are looking to build and the types of industries you serve.

William Colangeli, a partner at O’Malley and Colangeli/Bedford, Mass., has found that the old-fashioned networking lunch has served him well: He uses it as his primary referral-building activity.

“I have lunch with about 12 referral sources regularly, some monthly, some quarterly,” he says. “I call them. I don’t leave it up to them to call me. I put them on a fixed schedule.”

Colangeli says he knows his efforts regularly bring in new business—to the tune of $20,000 or $30,000 a year for his small firm. He finds the referral sources are receptive to having him initiate the meetings, and he gets a feel pretty quickly for whether each one will be an ongoing contact. “When you meet people, you can almost sense right away if there’s a rapport or not,“ Colangeli says. “So you know it’s not painful to go to lunch with them.”

Think new sources

Of course you want to target lawyers, bankers, financial planners, insurance agents and payroll sales representatives, but don’t limit your networking options to those people: Think creatively about other professionals. Larger, middle-market companies and public companies often have boards comprised of business leaders from across the community, and those people can be great referral sources, notes Maggy MacPherson, director of marketing and bmc/Reading, Pa.

Your own firm’s alumni are good sources too, she adds, especially if they’ve gone into industry and hold—or may one day hold—CFO positions.

Look also to the industries you serve. What other types of professionals serve that industry? If the construction industry is one of your niches, you could be building relationships with bonding agents, Caragher suggests.

And don’t forget about some of your best referral sources: other accountants. If your firm is small, you should be networking with CPAs from larger firms who can refer work down to you. Conversely, if your firm is large or mid-sized, you should be developing relationships with accountants who can refer work up to you.

New twist on the mixer

Social settings have long been the traditional fallback for professional networking: breakfasts, cocktail receptions, sporting events, wine-and-cheese mixers, golf outings, theatre trips and the like. In recent years, accounting firms are turning to more activity-based events, such as billiards nights and bowling outings, to break the ice and make the process easier for younger staff.

“Venues like that are particularly helpful when they involve managers or supervisors who may not have much experience with this type of networking,” Caragher observes. “This takes some of the pressure off of them because they’re not just standing around trying to converse with people.”

When holding an event with a bank or financial planning company, for instance, let your contacts with that business know who you are bringing to the event so they can create an appropriate invitation list of their own. Caragher notes it is important to match professionals with similar experience: After all, a 50-year-old bank executive will be much more interested in talking to a CPA firm’s partners, and a 30-year-old accountant will be more comfortable rubbing elbows with someone his own age.

Caragher recommends learning what you can about your new contacts before you meet them. If you’ll be mixing with attorneys, visit the firm’s website to read about their backgrounds. Try Googling the names of the new contacts, or ask your contact at the law firm or financial services group to send over profiles of the people who will be attending the mixer.

Simple Steps for Building Referral Networks

Make the first move. Other professionals need to be networking, too, and may well appreciate someone else taking the initiative.
Know what you want. Be able to describe the type of business you are looking for, specifying the size of clients you prefer, the niches you are looking to build and the types of industries you serve. Otherwise, you may receive a lot of inappropriate referrals.
Look somewhere new. Don’t limit your referral source possibilities to attorneys, bankers, financial planners and insurance agents. Look to people who sit on the boards of larger, middle-market companies; they usually are business leaders. Remember your firm’s own alumni, other professionals who serve the industries you serve, and larger and smaller accounting firms.
Go low pressure. Instead of the traditional wine-and-cheese mixer, consider a bowling night or a billiards tournament.
Match networkers. Ask your source at a participating law firm or bank to bring staff who are roughly the same age and experience level as your staff who will be attending.
Don’t forget the followup. Determine who you connected with and contact those people soon after the networking event. Make it personal, with a phone call, a handwritten note or a lunch invitation.
Expand the network. Once you’ve identified an inner circle of contacts, ask those people to introduce you to the people in their inner circles, and do the same for them.
Establish expertise. Host seminars for the niche industries you serve. Conduct technical presentations to your clients. Position your firm as the expert by getting high-level staff to sit on specialty boards and committees. Sponsor an awards program for an industry you serve.
Volunteer. Traditional community-service efforts, such as serving on the board of a not-for-profit group, bring consistent access and exposure to other professionals.
Stay visible. Send emails and call referral sources regularly to stay top-of-mind.
Make it a two-way relationship. Remember to provide referrals and assistance for the professionals in your network, just as you hope they’ll do for you.

The followup

Many accountants become discouraged when the contacts they meet at networking events don’t lead to new referrals quickly. But remember that you’re in this for the long haul. You are building relationships and a sense of trust, and that doesn’t happen overnight. A mixer is the time to plant seeds for future referrals; it usually is not the time when those referrals sprout.

“It’s unrealistic to think you’ll attend a 90-minute mixer and walk away with new business leads, particularly if these are people [you] did not know before the mixer,” Caragher says.

Instead, determine who you felt a connection with and who is likely to provide leads in the future. “That could be someone, personality-wise, that you got along with,” Caragher says. “You may work with similar types of clients. You might have other interests in common. And you want to have a plan of action of how you’re going to follow up after that mixer. This is where a lot of firms fall short.”

Followup could take the form of sending out information about your firm. It could include adding all of the mixer attendees to your firm’s newsletter mailing list. It might mean lunch, a golf game or another social event. One of Caragher’s clients keeps a close eye on mixer attendees by assigning someone from the accounting firm to follow up with each attendee within 60 days of the event, and the subsequent contacts are tracked.

Whatever the followup, experts say it should include a personal touch, such as a phone call or a note, and it should happen fairly soon after the original event.

Mutual network building

Once you identify an inner circle of existing contacts, look to them to introduce you to the people in their inner circles, and do the same for them. If you can accomplish this, you establish yourself as a valuable person to know.

“Give three times with no expectation of a return. You have to give more than you get because you have to build trust.”

If you are planning to take an attorney to a ballgame, invite her to bring a business guest, suggests Susan Lanfray, marketing director at ERE/New York. This gives your referral source the chance to thank one of her business contacts, and you create an opportunity to expand your own network.

In addition, some firms are finding success with referral source lunches or dinners in a group setting. Invite key valuable referral sources—financial planners, consultants and bankers, for instance—and introduce them to one another. As you build your own networks, you are building theirs as well.

“One of the things you want to do is become a valuable resource for the people in your network,” Lanfray says.

Establish your expertise

Expertise is a powerful asset. Serving on technical boards and hosting technical seminars and conferences creates an association in people’s minds between the subject matter and your firm.

With its strong focus on the construction industry, Barnes Dennig & Co./Cincinnati recently cosponsored a seminar with a law firm and a bank. The sponsors brought in a well-known construction industry consultant to speak about best practices, and each sponsor invited dozens of clients, allowing the other sponsors to meet new prospects.

“In the past few years, we’ve picked up a lot of clients we’ve met at that conference,” says Chris Perrino, business development director at Barnes Dennig. “When they’re looking to change firms, we’re on their short list.”

Likewise, bmc conducts technical presentations to the banking industry it serves. MacPherson recommends matching your referral sources with your niches: If your firm has a technology niche, get a partner to serve on a local technology council, where he or she will mingle with the other leaders in that field.

“You don’t need the moon,” MacPherson says. “You just need the [sources] who are going to have influence.”

Pannell Kerr Forster of Texas/Houston pushes that concept further, digging deep into a market to establish its brand and expertise. If you can do that, referral networks will follow, says Karen Love, director of business development. People in your market will want to network with you if you have positioned yourself as an expert, she explains.

Along those lines, PKF Texas immerses itself in Houston’s technology community. Love is the head of the accounting pod at the Houston Technology Center, a business incubator that offers guidance, education and access to funds for companies involved in energy, life sciences, technology and nanotechnology. Other professionals involved with the center are bankers, attorneys and other service providers, which creates an ideal networking opportunity and helps build the accounting firm’s reputation for technology.

PKF Texas also take part in a venture technology group through Rice University, and it is a member of a Houston-area bio-tech group, Love says. In addition, the firm partnered with the Houston Business Journal to found an event called The Fast Tech 50, an annual awards program for the 50 fastest-growing technology-based companies in Houston. Other sponsors include bankers, a university, a law firm and a major national software provider. The event now has an annual attendance of 700.

“People wouldn’t think of this as referral networking, but it is,” Love says, explaining that not only is PKF Texas networking with the other sponsors and with award winners, but there is quite a bit of prestige associated with the award, which brings the firm attention. “It makes us the people that everybody goes to for accounting technology.”

Community work

For PKF Texas, Love also finds great networking opportunities in more traditional community-based volunteer efforts. She serves on the board of Goodwill Industries of Houston. “There are so many people I interact with on a weekly and monthly basis who are involved in professional services, “ she says of other board members. “You couldn’t pay for those kinds of connections.”

Firm-wide, PKF Texas encourages it professionals to get involved in the larger community, but it gives them plenty of room to choose their own opportunities.

“Everybody is involved in the marketplace,” Love says. “We use people where they want to be involved. If they don’t want to be involved, they’re writing articles or serving on task forces.”

One female partner at ERE has found success with long-term involvement in the National Association of Women Business Owners, Lanfray says. The partner even set up internal networking groups of women business owners within NAWBO. Now, Lanfray estimates that as much as 85 percent of the new business referred to that partner comes from contacts made through NAWBO.

As a marketing tactic, serving on a board or committee for a non-profit group definitely works, Caragher says. “You’ve got to become known in your market and have an avenue to meet new people. Your goal when you’re building your referral network is not to find 10 people and cling to them forever. You’ve got to constantly be working on your referral network because people will move on.”


Because referral relationships are long-term, consistency is important. Several experts suggest using a contact resource manager to keep up with your communications with referral sources and schedule follow-up calls and meetings.

Even if you don’t have anything new to report, send an email or make a phone call just to see how things are going. Let your contact know the outcome of a referral she made to you, or inquire about the result of a referral you made to her. Did it turn into new business? If the source offered a suggestion on a personal issue, let him know what happened as a result. Whatever you do, don’t let sources forget about you.

“The [accountants] who are consistently visible to referral sources are the ones who get referrals,” Lanfrey says. “If you only meet with them once a year, you’re not going to be top-of-mind.”

Two-way streets

Don’t forget to return the professional courtesy: Referral relationships are two-way streets. Look for opportunities to send business to your new contacts. If your client doesn’t have a banker or a commercial attorney or mentions he is considering a change, there’s your chance to help both a client and a referral source.

“Give three times with no expectation of a return,” Lanfrey advises. “You have to give more than you get because you have to build trust. And the way to help someone build trust is to help them get what they need.”

“It doesn’t have to be new business,” Lanfray adds. “It needs to be giving something that person needs: information, an introduction, a connection, some research. You have to build that level of trust.”