Small firm spotlight: How I get referral business

From Robert W. Morris III, CPA, president and CEO of Robert W. Morris & Co. in New Bloomfield, Pa. (as told to Cheryl Meyer)

CPAs in small firms face many of the same operational challenges when it comes to running their firms. This is the third in an occasional series highlighting how individual practitioners tackled common issues.

My dad started our firm in 1981 after moving back to his hometown here in central Pennsylvania. I always told my dad I never wanted to be an accountant because of the crazy hours he worked. But I've been working in the practice since my freshman year of college, and now I own the firm. Our focus is in helping small businesses.

About 95% of our new clients come through referrals, and we get new referrals every month. Our primary driver is word of mouth. Central Pennsylvania is a "small town" community where everybody knows everybody. If you do a good job, it works to your advantage. About two in 10 existing clients give referrals, and we also get referrals from local bankers, attorneys, and other professionals, and we refer clients to them as well. We're growing at a good pace. If we grew any faster, we wouldn't be able to handle the new or existing business properly.

Our rule of thumb is if a referral comes from a good client, we'll generally accept it. And if a good client refers someone needing a basic individual tax return to us, we'll take care of it because we want to maintain a positive relationship with our existing client.  We do our best to acknowledge the referral with at least a simple thank-you, but I often feel that I should do more to express my appreciation.

We've realized the importance of having a strong web presence, including mobile optimization and social media. Referral prospects look at our website, Facebook, and LinkedIn pages. About half of our referrals use our website contact form. If it is a really good prospect, I email or call them directly. Most of the time, especially if it is tax season, one of my administrators will reach out to them. The speed of business is increasing, and it's important to get back to people right away.

Referrals fill out a new client questionnaire on our website or via phone. It's not overly complicated, but we ask certain questions, including who referred them and what services they are looking for, such as tax, consulting, or accounting services. We ask them how they want to be contacted. Many people, if they don't know you, prefer an email.

We typically set up an appointment, in person or through the Zoom virtual meeting platform. Then we determine exactly what they need. If we agree we want to work together, I'll get back to them with a quote. We look at their returns, and the number of transactions each month, and then we know how long it will take an accounting clerk to do their monthly work. We see how many employees they have and give them our expected fees.

I give referral prospects three price options, much like a menu. We have full-service, middle-of-the-road, and limited-service packages. Full service includes accounting services, paying their bills, payroll, tax returns, possibly filing their sales tax, and unlimited consultations, within reason. With the middle-of-the-road package, clients pay their own bills, and we make sure everything is accounted for properly, giving them monthly financial statements. With the limited service, we often just do tax returns and payroll. Sometimes, we negotiate by taking away some of the extra services they don't need. This system helps us be flexible with the prices. We also look at what they were charged before, and we're careful not to price ourselves out of the market. It is rare when a client is referred and doesn't come on board. Much of what we do is educate people, and that pays us back in dividends.

We've had a few challenges with referrals, though. One prospect, who was referred by a good tax client, came in and wanted the Cadillac package, but the business income didn't support it. Every so often we'll encounter a prospective client who is not nice, who I know will be hard on my staff, and I don't want that to happen. And on the rare occasion, we're not a good match. One time a potential client sat down and said, "Last year I paid too much tax; this year I'm going to pay $10,000, and you need to make these numbers work." I felt that the client was not above board and would create a compliance problem for us. In all of these situations, we just politely smile and part ways.

Still, referrals are the best way to gain new clients. They already trust us, and that trust factor is built in by the influencer who gave us that referral. Certainly, we've got to hit deadlines and be competent. But there's also a likability factor, developing of rapport, and having empathy for clients. If we can explain things in a way that they can understand, and solve their problems, then clients feel better. And that's how you gain trust and gain referrals.

Cheryl Meyer is a California-based freelance writer. To comment on this article or suggest an idea for another article, contact Chris Baysden, JofA associate director, at

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