Growing a practice: reputation vs. relationships

A young accountant recently asked how she should prioritize her limited marketing time: should she meet more potential clients at lunches, cocktail parties and golf tournaments, or should she build a reputation among existing clients for her niche services and expertise?

I advised her to do the latter. Here’s why:

Clients expect you to be courteous, likeable and conversant. But they hire you for results.

Prospects will ask about the results you produce immediately after they learn about you. While the quality of your relationships and whom you are associated with speak to your influence and character, the results you produce are what people pay for.

1. A good reputation commands higher fees. Whether you’re known for effective negotiation skills or completing a financial statement for a client to review before she goes on vacation, the outcome is valuable. And worth paying for.

When clients are skeptical about your work – either because you haven’t clarified the implications of what you’ve done or how you’ve done it, they have difficulty rationalizing your invoice.

2. A good reputation is respected. “Oh, you should talk to her. She recently helped my boss through a situation just like this. And she knows what she’s doing.” We will never stop needing to be liked and to have trusting relationships, but the esteem that comes from being recognized for quality work begets respect.

When people respect your work, they will refer others who are apt to respect you as well.  And those referrals will be interested in results rather than discounts based on a personal relationship.

Full rates + respect = higher realization. Professionals with good reputations spend less time worrying about price negotiations. A quote from accomplished horse trainer and novelist Jenny Pitman sums up the theory: “I’d rather be respected than liked, because I have to earn respect.”

3. A good reputation reflects your entire firm. This is especially important for junior practitioners who may not be able to speak for the results of their individual work, or who work as part of a team. Your reputation permeates throughout the firm; clients rely on it to be consistent, associating it with the organization, not just the individuals whom the clients talk to.

In a recent survey of 800 clients, a reputation for results was rated three time more influential than relationships when deciding which firm or individual to assign a file or matter to.

 Source: Hinge Market Research, 2013, Reston, VA 

4. A good reputation offers accountability. Applying for a business loan to fund expansion of your practice? A solid reputation enables easier access to capital at lower rates. Banks and investors need to know that your clients pay the fees you command and that in turn, you operate your practice with good judgment to secure its longevity. If you default on a payment, your bank won’t care how many times you’ve taken the loans officer out for lunch.

The sooner you develop a reputation for specialized skills or a consistent service style, the sooner you’ll be able to command higher fees. Your practice will become more valuable. You’ll also have more satisfying client relationships, because your reputation will partially establish expectations before people make an initial inquiry. Some of the most reputable practices and professionals I know have done this with determination – and reaped measurable benefits along the way.