Referrals are the single best source of new tax resolution clients

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I don’t think I need to try convincing you that referrals are the best way to grow your practice.

It’s the way that many tax firms do grow, and that way we want them to grow.

But, I also know that you’re smart enough to recognize the fact that if you want referrals, you must be proactive about it. If you’re passive about this, it’s just not going to happen.

Furthermore, as a professional in the financial services industry, you also recognize the fact that for some services, getting referrals can be difficult.

Such as IRS Collections representation.

People generally don’t tell their friends and colleagues about their financial problems. Thus, it can be incredibly difficult to obtain client referrals from existing tax resolution clients. Not impossible — it does happen — but they are rare compared to tax prep, tax planning, financial planning, and other client referrals.

But referrals from other tax pros? That’s much more common.

Over the weekend, I was reminded that I’ve already presented some pretty good training (if I do say so myself) on the subject. If you haven’t watched my webinar on the top 3 marketing strategies working in 2019 for tax resolution, then you really should.

Watch it here.

After that, I’m sure you’ll want to get more referrals from other tax professionals. To help you with that, I’ve assembled a toolkit to help you do just that. This toolkit contains:

  • Audio recordings from two Diamond member calls — nearly 4 hours of training — covering the step-by-step details for getting referrals from other tax professionals, from how to contact them, what to say during those meetings, and what NOT to do.
  • A sample referral arrangement proposal letter.
  • A sample endorsed mailing proposal letter.
  • Complete second course on networking with other tax pros by teaching CE/CPE, including materials for producing your own continuing education events and a 3-hour tax resolution PowerPoint that you can utilize in your own presentations (you can cut this down to 50-minutes by just doing the first block – perfect for local tax org lunch ‘n’ learns).

To get access to this toolkit, pick it up here.




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Determining How Much to Pay in Tax Resolution Referral Fees

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Today, we’re going to address the next most common question that I get whenever I start talking about this process of obtaining tax resolution referrals from other tax professionals.

I am fully aware that the issue of referral fees can be a contentious one. I anticipate no less than two dozen replies to this email slamming me for suggesting that we pay referral fees.

But I’ll say it loud and proud: If you’re able, I encourage you to pay referral fees.

While I would like to say that we live in a world where we could all do each other professional favors, and they will boomerang back in kind, the reality is that it’s very difficult to do. Many times, referrals are not returned in kind, nor are all they all able to be.

Think about it this way. One tax resolution referral to you is worth thousands of dollars. If you are a resolution-only practitioner, it’s impractical for you to try referring back to every one of your tax professional referral partners an equal revenue volume of tax prep work — you’re simply not going to have the volume.

So instead of quid pro quo (hmm, maybe I should avoid that phrase these days)…. So instead of trading favors, it’s easier to simply trade dollars. Money is, after all, a medium of exchange and a method of keeping score. Thus, we might as well use it.

To paraphrase a popular saying, “Money talks, favors walk.”

With that said, the next obvious question is: What is a reasonable referral fee to pay?

As a marketing person, I view this from a very practical standpoint. Let me explain.

If I engage in a direct mail campaign, telemarketing follow up, a pay per click ad campaign online, buy advertising in a niche trade journal, etc., my objective is to get back 3x what I invested in the marketing campaign. That’s gross receipts, and please note this applies to IRS Collections cases only, not tax prep, bookkeeping or other services.

In other words, I’m willing to invest $1,000 in order to get back $3,000. That math works for me, and it should work for you, too. If that math doesn’t work for you, then you need to reevaluate your expectations about ROI on marketing expenditure through traditional media (this is part of the beauty of referrals, public speaking, etc. — much lower cost of client … Continue reading

Tax Resolution Referrals: Overcoming the obstacle of poaching clients

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In yesterday’s article, I gave you the raw numbers that drive the marketing tactic of generating referrals from other tax professionals.

Today, I will answer the most frequently asked question about this particular marketing method: Why would other tax professionals be willing to refer me their clients? Won’t they feel threatened by my presence?

These are perfectly valid questions. However, from experience, I firmly believe that it’s an overblown concern, especially if you specifically position your relationship to be constructive rather than competitive.

First, the big picture. Any tax professional worth their salt should understand and embrace two core ethics principles that directly relate to this conversation:

  1. As long as the client is paying you and playing ball, we need to do what’s best for them.
  2. No tax pro should practice beyond the scope of their own competence.

I think these are two basic things we can all agree on. So with that said, any professional colleague in the broader financial services industry should be expected to refer out their own clients to other competent service providers for services they cannot provide if the client genuinely needs those services. Honestly, it almost feels like I shouldn’t have to spell this out, but there it is.

So for this reason, and this reason alone, the vast majority of those 670,000 tax preparers I mentioned yesterday are willing to refer work to YOU that is beyond their expertise (including willingness to acquire expertise).

Second thing: Since the concern over poaching clients can and does come up, you can and should proactively position your relationship with your new referral partner to address this concern up front.

For example, if you are working tax resolution referrals from an attorney, simply Kovel yourself under the law firm and work the case.

Another example: If you are a tax resolution-only practice, and you don’t even do tax prep or bookkeeping (which is how I operated, and many of our members do likewise), then overtly state this to your future referral partner during the initial conversation. Tell them that they get to do all the tax prep and bookkeeping — they’re still engaged with the client, and you’re kinda working together on the case.

Final example: Let them collect the resolution fee, and pay you your cut. Now I do have to say that this isn’t something I would ever do, because I’m too much of a control freak … Continue reading