Do You offer money for referrals?

I saw that Liberty Tax is offering a $50 refer a friend program. Any one has success with this type of promotion?

As This is my first year, I was thinking of offering my friends $25 for anyone they refer me.

In CA I believe CPAs can't offer cash for referrals. So, no.

I would not recommend paying "cash" for referrals. A better option may be to offer a referral discount which I do.

But the $50 from JH does grab your attention!

Long time back I gave a client $10 as a referral fee. Word got around and some of my clients were calling me for money for their previous referrals particularly family members. Stopped that in a hurry.

But I suppose if you are an unenrolled tax preparer there is no law against paying for referrals! Pls. correct me if I am wrong.

I was thing of printing up business cards and having the referrer put their name and phone number on the back for tracking. I was also thinking of making the business card a coupon for $25 off tax preparation services so the person would make sure to present the coupon.

I could also leave these cards at businesses around my area.

ATSMAN Since I am starting from scratch I would not be running into the same issue you had.

My tax prep software let's me print coupons!

If you are starting from scratch you could use the USPS to do directed marketing for you. I received a brochure from them last year but I misplaced it. But essentially you could target a given street or zipcode with a flyer that has the discount.

A small ad in my local newspaper cost $120 min. and I seem to recall the USPS price if I just did my zipcode was less!

Of course you risk people tossing it away as junk mail!

Doesn't NAEA prohibit its members from paying referral fees?

In Oregon CPAs are not allowed to pay referrals unless you disclose it appropriately to the parties. At least this used to be the rule. HOWEVER, why pay for referrals? I ask my clients for the referrals verbally and in the Organizer. Most clients I ask say, "Really, I didn't realize you were accepting new clients. I'd be happy to refer people I know that need the service." I also have my Office Manager mail a Thank You card and sometimes with a Starbucks gift card.

You are talking about Every Door Direct Mailing (EDDM) It is very inexpensive and the sizes of the mailer are such that they stand out. It is a verry good program by the USPS

https://www.usps.com/business/every-doo ... t-mail.htm

Mail piece sizes are below:

http://gotprint.net/ray/eddm-home-banner.jpg

My tax prep software let's me print coupons!

If you are starting from scratch you could use the USPS to do directed marketing for you. I received a brochure from them last year but I misplaced it. But essentially you could target a given street or zipcode with a flyer that has the discount.

A small ad in my local newspaper cost $120 min. and I seem to recall the USPS price if I just did my zipcode was less!

Of course you risk people tossing it away as junk mail!

Yes that's it.

Anyone tried them? What was your success rate?

the average response rate for direct mail is 2%

1000 6"x9" EDDM postcards $150
Postage for 1000 EDDM flats ($0.175 ea) $175
Total cost $325

1% response rate =10 leads
2% response rate = 20 leads
3% response rate = 30 leads

The response rate depends upon the offer in the mailing. The better the offer the better the response rate.

The key to direct mail is testing. Send out a thousand and see your response rate if it was poor change the offer and try again. Once you get a high enough response rate from your mailings then you can scale it at large as you want.

10,000 post card at 5% response rate = 500 leads

people who tell you that direct mail does not work are not doing it right. they send out one mailing with a crappy offer and get less than 1/2% response and blame it on direct mailing. If you can not afford to test different offers until you fins one that works, don't try it, but if you are willing to test you can find an offer that converts. Then it is like printing money,

I don't think people actually want referral fees. They use us as accountants because they like us and we save them time and money. To really show appreciation is to give someone a gift, not just money. I give clients who refer new business a Starbucks gift card, or something else if I know them a little better or I know they don't drink coffee. I don't advertise this and when people get these gifts it really makes them appreciate our relationship. You want clients to refer others because of what you do for them, not just to get money. Imagine all of the bad clients you will have to deal with because everyone is telling their friends, neighbors, cab drivers, cashiers, "Hey, go to this guy for your taxes because I want $25."

I think people appreciate a discount for their efforts to refer a new client to you. Some people may not appreciate a few dollars in cash as much as a gift card or discount or dinner etc. But the bottom line is human nature expects some thing nice in return!

I think people appreciate a discount for their efforts to refer a new client to you.

I agree that people appreciate a discount when given, but people refer others to professionals because they like them and think they do a great job. I bet referral programs that offer cash don't get as many new clients as you think. But I would love to see research on this to know for sure.