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[00:00:00] Welcome. Today, we're getting into something every business owner deals with at some point. Referral relationships. You know the drill. Hey, do you know a good fill in the blank. Sometimes they go really well, and sometimes as SEANNA and I have heard, not so much. We're talking about how to build solid referrals, how to protect your clients and yourself, and your reputation and what to do when a referral just doesn't go as planned.

We have had some great ones and we've had a few we've had to walk away from, so let's talk today about how you can do it and maybe do it better. All right. Welcome to Unfiltered Profit. I'm excited to dive into this because this has been an area, honestly, that is a game changer and a lot of service businesses. Like CAITLYNN and I, we are part of ProvisorS, and if you don't know what Provisors is, it's a like national networking group.

There are tons of them, BNI, other things, provisors is like, very high quality professionals that have had 10 years in their profession, [00:01:00] and that is something that I'm on my one year anniversary of provisors. And so we've been building a lot of referral relationships and we have a lot of experience now with good ones and bad ones.

Yes. Yeah. And some of this was sparked from a conversation I had with a potential referral partner and sometimes like just hearing her stories too, I realized that. When I started out, or even today, sometimes when I get asked, if I don't have a good referral that I trust, I get very anxious to give any names because it feels like it's my reputation on the line that if they mess up, a client will stop trusting me and my quality of services.

'cause how, like if I, mm-hmm. If I'm that good, why would I recommend this person? But it has completely built my business as well when those referrals come from great clients and great other professionals that I've met with, who maybe the client was a good fit for like their tax business, but it's for mine or whatever the case may be.

So it is very much like a coin with two sides. [00:02:00] Yeah. Yeah. AND IN service businesses, referrals are everything. I mean, we like to do other forms of marketing. Obviously we do this podcast, we have webinars, but still, like, most of our business comes from referrals and we have clients that need a lot of other services. Legal, financial advisor, all of that.

And so we have to have those people in our pocket to refer clients out to. Yeah, and we can't always test everyone. We don't have the need personally. Or we're not in those states 'cause you've got licensing requirements. And so let's talk about a little bit what a good referral relationship looks like.

Kind of the questions maybe that we ask to try to figure out if THEY'LL be a good referral for us. Yeah. And then we can move into what to watch for. Yeah. I definitely have learned that it always takes a conversation with the referral. Person that I'm thinking about referring a client to because we have to have those conversations around values and just like how you [00:03:00] serve a client. Because that differs very much from business to business.

And it doesn't make it good or bad, but IF a client is used to working with us in a certain way, they're gonna expect some sort of similar pattern in the other professionals that they work with, or a similar mindset. Yes. For sure. Communication, I think would be a good one as an example, like we value communication and we value responding quickly.

So in our referral partners, we expect the same. We don't want you to ghost our clients for weeks on end. So did you respond and so the ways we can test it, did you respond to our email within a reasonable time to set up a conversation? Or did you leave us kind of wish, like waiting for you to get back to us without explanation, without that discussion of like, Hey, I'm on vacation.

I'll get back to you in two weeks? Totally fine. Yeah. But if you just left me for two weeks, are you gonna do the same to my client? Yeah. Yep. And there's always grace that can be given there. Like I'm in a postpartum season and I have been bogged [00:04:00] down in my inbox, and I have been more delayed on some of those networking conversations, not on clients, but on the networking conversations and

i've had to ask for that grace on the backside. And I also realize how important it is in building that relationship. So thankfully, even some of the ones that I've been delayed on, we've had great conversations and they realize, oh, that's not her typical. Yeah. Right. Yeah. And it's getting to that point.

And I think a big piece is knowing that in that discussion, what do you do? Who are you really looking for? And who can I send you? That makes sense in vice versa. And when it's a networking conversation, when it's that referral conversation, be honest. It's not a sales call, it's a true... what do you really want?

What do you really need? 'cause I don't wanna waste either of our times. Right. And our client's time passing us back and forth for no reason. Yes, absolutely. And I think, thankfully, when you work with business owners that are very [00:05:00] well-established, they have a true picture of like, well, I am the best fit for these types of clients.

Mm-hmm. As we all know, in the early stages of building a business, you're a little scrappy and hungry and you're like... I could serve that person. Well, no, I don't wanna hear that. Like you can serve them, but are they the best fit for you? Are you the best fit for them? Or can I send them somewhere else?

Like that is the piece that's very important. We can do a lot of things as CPAs, but we try very hard to stay in our lane and tell people, no, you're better fit for somebody else. Yeah, I think my big one, 'cause I keep getting asked in the networking, 'cause mine have picked up as I joined provisors and like, what's your niche?

I was like anything but tech. And so that's where I start. So for us, we kind of exclude industries. Yeah. And from there we then get more specific. It's this size revenue, it's this many employees, but to give them like a broad brush stroke, I'm like, please don't send tech and nonprofits [00:06:00] my way.

We don't help them at this point in time. I don't know if we ever will, but they deserve people who are there to fully serve them. Yep. And you're not gonna offend me. Yep. And we like working with business owners one-on-one, yeah. So I don't wanna work with companies owned by PE or that are looking to raise capital or go public or any of those sorts of things.

That's not our area of focus at all. Exactly. The other piece we really look for is kind of that accountability. Are you going to do what you say you do? So if you promise that you check in with clients four times a year, are you doing that? And what's... yeah. Kind of a check on that? How do you have a system? And so we'll share like, Hey, this is our back systems,

this is how we keep in contact with our clients, how we ensure we're following through and we kind of just want that same conversation back. YUP. And I think the other one is like if I send a referral directly to you, CAITLYNN, not as my business partner, but you're my example. I expect that you are going to handle that referral unless for some reason within your company, like if someone [00:07:00] was referred to Prospera and they wanna have just a in-depth tax conversation, like you are the best person.

To serve them in that initial consult, but I should still be a part of it unless that referral partner also knows you. Correct. But that referral should not be just generally handed off in the company until we get to the point that like if they're onboarded and they're a client and they get sent to their like account manager and all of that...

completely different situation. I don't expect like the owner of a company to be... do over one-on-one handholding these clients, but it is the like personal relationship that's being pressed upon, not like, oh, here's my company, just I'll send you to anybody. Or if you're gonna do that, you better follow up and be on their back a hundred percent.

And that the referral should be treated in that same manner as you would have [00:08:00] treated them. Exactly. And there's just something to like talking to kind of that last line in the company and that's the owners. And so I will tell you what we are going to do and what we're holding our employees to. And I will be forthcoming that we, as owners, do not do everything, but, Right...

I am still... right. You don't want us to, but I'm still the last line. I'm still the one who's checking it. I'm still the one making sure that what we give you is appropriate, that our requirements are followed, and yeah, I should be doing that and it should not be handed off to your salesperson who's trying to build a book a business. Like show up with them, but they need to build their own referral pipelines at that point.

Yes, absolutely. And that has burned some good contacts, even within provisors, that it's like we think we can send a client, our client is not treated well, and then the client comes back to us and is like, you need to take them off your referral list. Mm-hmm. And that hurts. And that hurts [00:09:00] now the relationship that we have with that referral partner, and it's like.

Well, I can't trust... like there's no trust there because of how that one client was handled. And that stinks. But that's how professional relationships work. It's not three strikes and you're out unless there's some really good reason why... right... you know, it's one strike and you're out, and I gotta go find someone else.

Because there are thousands of accountants. There are thousands of financial advisors, insurance professionals, real estate agents, right? Yeah. We can all be replaced. So you've gotta have that piece that makes you stand out and makes people trust you. Yeah. So what are some kind of beware signs that you've seen when you are having those conversations?

So maybe before the clients fully get to them that you're like, eh, maybe that's not a good fit for a referral partner. Yeah, I think. I mean, it's also industry specific, but, like, when I talked about this in our last [00:10:00] episode that we did where we were talking about accounting professionals, it's like, the way that someone's price, like learning about their service model can be a red flag where it's like, oh, well, I wouldn't personally want to be subjected to that, so I would not subject

my client to that. Or if it's an industry where I have some knowledge, but I'm not that professional, so like I'm not a financial advisor, but I have some very strong opinions about like what types of retirement plans should be set up for business owners and how all of that stuff should be treated,

mm-hmm. When I talk to a financial advisor and they start throwing out like, oh, a hundred percent, set 'em up in a sep. Like no other consideration. No consideration at all. Not a simple IRA, not a solo 401(k). Like, we're not gonna do anything there to talk about the tax strategy or... nothing. Just step all the way,

no. Like, and I'm just being honest and that's one example that [00:11:00] it's like I have some knowledge in that industry and... mm-hmm. Depending on how they answer that question, it can be like, well, I really like you as a person and I bet you're probably great on like the personal side of things if someone needs someone to manage their assets or whatever,

but you're not who I'm gonna choose to send my business owners to when I want some retirement plans set up. And I've had great conversations where I'm like, this is a financial advisor for my clients. Like, I will send them there a hundred percent because this woman gets it. I would use them. Yeah, that's kind of my marker.

Would I use you? I feel like I have a pretty good read of people and that tends to be it. Hiding pricing always feels funny to me. Mm-hmm. We have minimums. We are very upfront that they can change and they can grow, and we do at the end of the day, have to go based on complexity of the business. But I'll have a discussion with you about where our pricing begins.

And if you can't kind of do the same to me, I really worry that I'm sending a client [00:12:00] and BLIND. Because how do I share? How do I know that you're within budget? Again, back to that good fit. Yeah. If you're a percentage of some sales, fine, like just let me know so I can have that conversation. But if you can't tell me, I kind of back off the ability because it's just more. If my client gets five conver two conversations in with you and then they find the pricing and they're like, oh, I can't afford that,

we've wasted so much time. Yeah. And we, as business owners don't have that time to waste. No. Like we have zero time to waste. Without a doubt. What happens when it goes sideways? Like, how have you managed when a client does come back and says like, Hey, that didn't go well, I don't like them. How do you keep the professional relationship while also like cutting off kind of that referral source?

Yeah, that's an interesting question. I think that's a like fine line you have to walk with people. For me it's like, well, I can always be pleasant to anybody just because they like maybe [00:13:00] didn't handle that one client well, doesn't make them a bad person or anything. Like, we're all learning, right?

We're learning how to be better referral partners every single day and I can give grace there. It doesn't mean that I'm ready to send clients back to them, and if they came to me and they were like, Hey, SEANNA, like, why haven't you sent any more clients my way? Like, I'll have an honest conversation about it. it's a hard thing of like, do I just reach out automatically and be like, Hey, that was a bad experience, and like, you need to change that. Mm-hmm. It's hard because that's personality-driven, like I would want to know that. Mm-hmm. I've asked some of those direct questions to referral partners of like.

Hey, if I like respond to it and ask them to fill out my website form, is that gonna like turn them off or should I just send them my Calendly link? Like trying to get some of that feedback. Yeah. But not everybody likes [00:14:00] direct conversation like that. And the reality is that... if a client drops off or if like that referral drops off and they like stop communicating, don't want pricing, like, don't respond to the proposal, well then that professional already knows if they're tracking their leads that it didn't go well.

So do I really need to mention it? I don't know. How do you feel about it? Well, I'm not an idiot Grammy like you are. So I like to avoid the conflict. And again, it's not bad conflict in my head. All conflict is bad conflict. So we'll put that out there. For me it is, I just kind of naturally let it go.

If the client does want me to step in and say something, I will probably tag you into it now. Like, SEANNA, can you please tell them as nicely as possible, but directly that this kind of went bad and the client's not interested anymore? I think when I'm not asked, I tend not to give that. So I have had clients switch, so they've come back and they've said the service isn't working.

I need a new referral. And I so appreciate that they trust me again to give them another one. Yes. [00:15:00] Usually I have also seen the writing on the wall, so sometimes I will bring it up to clients like, Hey, we're not getting the responses we used to, do you wanna consider a change? And if so, here are some new people we can consider.

And then if that old referral wants a discussion, we can talk. But most of the time I'm with you. I don't find that they do. They kind of just chalk it up to turnover in business. Yep. So before we wrap it up, I have a question. Fees, what do you think of referral fees? It's funny because this is something that's changed for me in the past year. and that's part of being part of ProvisorS because before really having this like solid network where we're all just trying to build each other up and build each other's businesses and serve our clients well, like when you have a good strategic partner, it's like, hey, my client needs help.

You're the one to help them. All I want is them to be served. Mm-hmm. I don't care about the money. Like I'm not planning my revenue stream around referral fees. And that is now the mentality that I take. [00:16:00] Before I was like, should there be incentives? I'm happy to like, give referral fees.

But the reality is no one's sitting back going... what client could I send to SEANNA so that I could get a referral fee from her? And if they are spending time on that, like, they should be growing their own business like... mm-hmm. To be honest. And so that shouldn't be this like big part of their revenue plan.

That is where I stand now. Whereas I used to be the one to like offer referral fees. Now I think a nice Thank you, and if they're a good strategic partner, send a client their way. Use them myself. Whatever. That's the best way to like really thank them for it. Yeah. Do you feel the same way? I do. I once had like, financial advisors and they're like, well, I can't give you referral fees unless you get licensed or something like that.

I was like, I don't want them, I want you to send them to me because you believe that I will do a good service, because I am a good fit. Right. And I also don't want the [00:17:00] strings that it feels like there is with a monetary transaction. Like am I allowed to say no if it's not a good fit? Like I just don't want that. And I wanna know that they're, again, just trying to make that good fit.

And same, like I don't want to necessarily pay referral fees 'cause I want the client to trust that like I... Believe it's a good fit. Yeah. That it's all going well. And I mean, I'll take the, like affiliate stuff from QuickBooks, but that's Oh, for sure. Right. Software. Software. Please. Give me the affiliate stuff.

You guys have enough money. But yeah, local businesses now like... Let's just make sure it's a good fit and it's a good relationship. And that's the thing. Most of the time as financial professionals, we work with their financial professionals. I just want that good working relationship. Mm-hmm. I wanna know that you and I are on the same page for the client, and you're not gonna call me an idiot in front of them and I won't do the same to you.

Like that kind of stuff. Yes. I'd rather close personal relationship serving clients well than anything else. Yep. Yeah. A hundred percent. Well, so with that, yeah, if you've ever [00:18:00] referred someone and you've had it blow up, you're not alone. We've got stories galore. But to protect the innocent, I will not share them all.

And if you've had great referral partners, then protect them, continue to support their business so they continue to grow because they're gold. If you've got questions or you want to continue to hear from us, please check the show notes for ways to reach out and connect with us and we will see you next time.