My Low-Key Referral Request That Can Work for You, Too

I’ve talked a lot over the last month about asking for tax-planning referrals. Today I want to talk about what that conversation might look like.

Here at TaxCoach, every day is casual Friday. And by casual, I mean jeans and polo shirts. (At least we wear collars to work; we’re not savages!) But this morning I threw on a pair of khakis, a nicer-than-usual button-down shirt, and my favorite pair of shoes to see a longtime friend and colleague who practices estate-planning law here in Cincinnati. 

I’m a big believer in setting goals, so I came to him with three of them. First, I wanted to trade updates on what’s happening with his business and mine. Second, I wanted to present an idea to demonstrate my value as a tax planner. And third, I had an idea (the monetized installment sale) for him to introduce to his own network of prospects and clients.

That first goal may not sound especially important. But it really is, even though it doesn’t generally lead to specific business. People want to do business with people they know, they like, and they trust. This is just as true for the referrals they make – they prefer to refer friends, family, and colleagues to people they expect to reflect well on them. (Remember what we said a couple of weeks ago – people refer you to make them look good.) Don’t be toomercenary!

My next step was to take advantage of something I already knew about his business – that he practices as a C-corp – and give him an idea to save him money. 

We’ve talked before about quantifying your value to give clients a reason to refer you. Now, if my attorney friend had been an actual client, I would have quantified the value I had already delivered – listing the ideas I had given him, counting how much each had saved him, and adding them all up for a nice impressive total. But I didn’t have that option. 

If I had been looking to turn him into a client, I would have followed the process I outline in the TCU 103 class: finding the mistakes and missed opportunities that were costing him taxes he didn’t have to pay; quantifying the cost of those mistakes and missed opportunities; confronting him with the cost of those mistakes and missed opportunities; and finally presenting my tax-planning service as the solution to the pain I had just uncovered.

But I made the strategic decision not to sell a tax plan. That left me with a real challenge when it comes to asking for referrals. Specifically, how can I quantify my value? So, knowing he operates as a C-corp, I took a look at his corporate tax return, and after a couple of minutes of analysis and questioning, I walked him through how to dramatically lower the employment tax he pays. (It’s not actually the strategy you’re thinking, but that’s a story for a different day.) Then I quantified exactly how much that strategy could save him – over $15,000 per year. The look on his face told me I made an impact!

At that point, I reminded him that I was looking for more prospective clients for this sort of planning. I told him, “When people ask me what I do for a living, I tell them I help rich guys pay less tax,” and held his gaze while he absorbed that. He asked me how I’m finding prospects for that sort of work, and I told him, “By doing exactly what I’m doing with you now – sharing ideas and demonstrating my value.” 

Finally, I moved on to my final goal – presenting the monetized installment sale concept. He seemed suitably impressed at the planning opportunity and the business opportunity.

At that point, his next appointment was waiting in the lobby. (I had already known I had a short window when I scheduled our time, so I resolved to keep it low-key.) He told me he would be out of town for the next week and we agreed to follow up when he got back. I reminded him again that I would be looking for more people to talk to.

I was direct without being blunt or demanding. I offered something of real value to him (the tax-saving idea) in exchange for the request for something of value for me (referrals). Yes, I chose to give away a valuable tax-planning diagnosis. I wouldn’t ordinarily do that. But in the context of the existing relationship, which goes back literally to my childhood, it was the right move to make.

That’s all it took. A single phone call, 30 minutes in the car, and 45 minutes of meeting. That, in search of referrals that can lead to thousands in new revenue. It’s really not as hard as you might think.