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Why Professional Services businesses need to build a successful referral-based business

Professional Services cr

Referral-based businesses face some challenges different to other businesses.

Have you ever made these embarrassing business-damaging mistakes?


  • A second partner invites someone who is already linked to your organisation to an event for prospects?
  • Inviting people to events in the wrong location or in which they have no interest?
  • Omitting key people from an invitation list because their information was not with the rest of the information?
  • Seating people with ex-colleagues rather than current colleagues?
  • Losing key prospect or client information when a staff member leaves?
  • One partner or employee feeling that another employee has ‘stolen’ their client?;
  • Losing touch with a valuable referrer?
  • Bombarding valuable contacts with irrelevant information?

These mistakes can happen in any business, but they are far worse for referral-based businesses.

When a prospect comes to you based on a recommendation by someone they trust, the probability of them deciding to do business with you rather than one of your competitors is much stronger.  So having a process which makes garnering and maintaining these referrals easier is common sense.  And, it is easy to achieve – with the right tools.

Professional Service organisations often feel that CRM (Customer Relationship Management) solutions are not relevant to them. They do not have a sales team or an active sales pipeline or a formal sales process – most of their clients come from referrals, so do not see the relevance of CRM.  As a referral-based business they typically acquire their clients through personal networking efforts of their partners or senior people, rather than through typical marketing, prospecting and selling.

These networking efforts often focus on events such as golfing days golf days are important networking functions for Professional services.  CRM can help organise themand barbecues organised by the organisation themselves, or by membership groups of which they are a member.  Attendance at, and organising of, these events often takes up the lion’s share of their marketing budget and it is often not clear which of the events are worthwhile, and which are just a cost, albeit perhaps a cost which is enjoyed by the participants.bbq

Many of them also rely heavily on channel referrals.  For example, forensic accountants get the majority of their end clients through other accountants or solicitors – centres of influence – who realise that their client is in financial difficulty empty pockets 300x261and recommend that they seek the services of a forensic account, either to avoid liquidation or bankruptcy or, if that is not possible, to assist with the unpleasant process of selling the businessfor sale, or liquidation, or bankruptcy.  

These centres of influence are often felt to be easily swayed, as competitors are also seeking to win them over. Thus effort is put into maintaining their loyalty and finding new ones.

Accountants are not the only business that can benefit from this approach.  Architects and architectsBuilding Management companies or building and Interior Design companies can frequently build strong relationships with each other which lead to cross referring. This reduces the cost of business acquisition.  Specialist coaches can work with other specialist consulting experts or management consultants and acquire business more easily and cost effectively.  Financial Planners can work with Accountants, Lawyers, Mortgage Brokers and Banks to build each other’s businesses.  And there are many more examples from both business to business (B2B) world and the Business to Consumer (B2C) world.

While the reliance on centres of influence as referrers may not be as strong in many other types of business, a referral is often highly sought by other businesses. This includes many business-to-consumer (B2C) businesses such as plumbers and hairdressers.  So, if possible, all businesses should look to build a network of other businesses between which business can be referred.  It is well known that the cost of finding a new client is about 7 times that of keeping an existing client happy.  Finding clients through trusted referrers is considered to be comparable to the cost of retaining an existing client.

Implementing a CRM strategy can overcome these challenges.

The key benefit that these organisations will get from implementing a CRM strategy is the view of referrers and clients across the entire organisations.  In other words, they can have a simple view of:

  • Who are the current active referrers?
  • Which staff member is looking after which client / referrer?
  • Tracking referrers as they move from one organisation to another.
  • Who has referred which client, or which referrer is referring the most business, or the better quality business.rsvp to events
  • Who has attended which event, by company or by individual, or even type of company?
  • Which prospect organisations have not been spoken to for a particular period of time?
  • Which event generates the most referrals?
  • Easy continuation of relationship building or maintaining activities while a staff member is absent or after they leave your organisation?
  • The costs and the effectiveness of each event held or attended.

By knowing who is actively referring, and managing those referrals, including organising the events, so that enough appropriate events are organised and attended, significant cost savings can be achieved.

CRM is so much more than a contact database or a sales tool.

A CRM strategy embraces the entire interface between clients and the organisation.  The database of clients, or referrers or prospects is part of this, but it is only part of this.  A good CRM strategy will include how the entire relationship with the client or prospect is conducted. The CRM technology will provide tools for

  • automating the repetitive communication with clients.
  • analysing the history of the relationship of a particular client.

So they will usually reduce the data entry required and so save time and money.

As well as sales, a good CRM technology will include campaigns and other marketing functionality and case or issue management.  Modern CRM technologies will also have a large number of add-ons which have been developed to solve particular industry problems.  Often these can be used as the starting point for solving your problems.  This means that you do not have to have CRM developers working for you in your office for months on end.


Common fallacies about CRM

One of the concerns that I hear when talking to some prospects, is they are worried that the CRM software they select will not capture the information that they require. Or it will straitjacket them into a process from an alien industry, or give them reports that offer little benefit.  When you select a modern CRM technology, these fears are groundless because it can be configured easily to meet your requirements.

Another worry is that the implementation will be a long drawn out and expensive project. And will it maintain the data that has been collected in various files and spreadsheets over the years.  Again this should not happen because the modern CRM technologies are designed around industry best practice.  This means that much of the functionality that you require will be in the standard product and your specific configuration will be tweaks to this, not major programming projects.

Often a well implemented CRM solution will pay for itself in the time saved alone.  This happens by reducing data entry, enabling automation, and finding information and generating reports becomes easier.  And to this can be added the ability to reduce the money spent on events as more return can be gained from fewer events because events are more targeted and therefore effective.

One professional services firm to which I consulted, spent half of their Office Manager’s time keeping their various customer lists and marketing tools synchronised.  Even with this effort they struggled to organise their events effectively.

If you’re still not sure about the effectiveness of CRM in a referral-based professional services environment, here are 7 more ways it can add value and revenue

  • Easy understanding of who has or has not attended particular events or types of events, which may, as an added benefit, make generation of future invitation lists simpler.
  • Simple automated (if required) follow up of people who have not yet replied, or replied but not  attended particular events.
  • Ability to stay in touch and with people who pass on referrals and know their history as they move from one referring organisation to another.
  • Opportunity for invited prospects to reply or purchase tickets for events via a self-service web portal.
  • Simple personalised correspondence options from within CRM.
  • Understanding the interests, preferences and concerns of respected clients.
  • Lots of real-time reporting options across all aspects of the customer management.

For more information about the benefits of CRM in your professional services business or to discuss a Guide Me Guru free trial of Microsoft Dynamics CRM – the free trial with extra help – for your business please contact us on 02 8212 3480.

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Opsis is an expert Microsoft Dynamics 365 consulting company. Our focus is your Microsoft Dynamics 365 success - not licence sales or billable hours. As Principal Consultant, Gill oversees all business operations and strategic planning and execution, yet she still believes in offering personal attention to each and every client, so as to understand their needs and offer tailored solutions.  We are based in Sydney, with clients in Sydney, Canberra, Melbourne, Brisbane and across Australia.  We offer Microsoft Dynamics 365 strategy, Microsoft Dynamics 365 scoping, Microsoft Dynamics 365 implementation, Microsoft Dynamics 365 technical support, Microsoft Dynamics 365 advice and guidance, Microsoft Dynamics 365 training and mentoring.