When the referrer leaves, the clients disappear

A lesson for professional service companies that place 80% of their revenue on a single personal relationship.

Sinh Vũ · Creative DirectorPortrait

Quick summary

Many professional service firms, such as accounting, law and IT, survive because one person is actively referring clients. When that person leaves or changes industry, clients follow the person, not the firm, because they were never attached to the brand. Building a brand that is independent of individuals means creating a reason for clients to remember and seek out the company's name, not a person's name.

In this article · 6 sections

One morning, the director of an accounting firm received a message: the chief accountant had just accepted a position elsewhere. By the end of that week, three major clients had called to ask where she had gone.

No one asks about the company.

Revenue looks stable but the foundation is very thin

Many professional service firms, such as accounting, law and IT consulting, have a fairly steady growth history. New clients arrive in enough numbers to replace those who leave. On paper, everything looks fine.

But if you trace the origin of each contract, a few names usually appear again and again: Mr. A made the introduction, Ms. B brought in the lead, Mr. C spoke to a partner.

This is not a channel, it is a person. And people move on.

80 / 20Many professional service firms admit that most of their revenue comes from a very small group of internal or external referrers. When that group changes, the entire client base wobbles with it.

The problem is not the referral channel. Personal referral is a good channel, low in cost, with a high close rate. The problem is that clients are attached to a person, not to the company name.

Clients call a person, not the company

Marty Neumeier, author of The Brand Gap, writes: a brand is not a logo, a brand is what customers feel.

A brand is not what you say about yourself. It's what others say about you when you're not in the room.

Marty Neumeier, The Brand Gap

When clients need an accountant, they remember Ms. Lan, who sat down and explained every line of the report to them. They don't remember the company name.

That isn't Lan's fault. It's a sign the company hasn't yet built anything that stands on its own beside its people.

38%According to Kantar BrandZ, brands that customers rate as “meaningful and different” command prices 38% higher than competitors in the same sector. Source: Kantar BrandZ, around 2020.

What stays when people go

Wally Olins, one of the people who laid the foundation for modern brand thinking, divided a brand into four components: product, environment, communication, and behavior.

Most service companies are strong only in the product. Their expertise is solid, but the other three components are faint.

The environment is: what the office looks like, what outgoing emails look like, how guidance documents are presented.

Communication is: how the company is mentioned online, on the website, in referrals. Behavior is: how staff explain things, how problems are handled, how a project is closed out.

When these three components are weak, nothing stays behind when a key person leaves.

  • Clients can't find any information about the company beyond the phone number of someone they know.
  • No one in the company explains the services in the same way.
  • The materials sent to clients look different every time, so they fail to create a consistent impression.
  • No company profile stands on its own without someone beside it to explain.

A brand is not a logo, it is an operating system

This is the most common misunderstanding: many business owners think building a brand means making a new logo, printing business cards, adjusting website colors.

The logo is the smallest and easiest part.

The harder part is creating a consistent system that any employee can run when the founder or a key team member is not there.

Byron Sharp, in his book How Brands Grow, shows that a brand builds up through two things: being present in the customer's mind at the moment they need to buy, and being easy to reach when they want to buy.

Neither can be built through a single person.

+32 points%Companies in the group that invested in design and brand had revenue growth 32 percentage points higher than the rest over the same 5 years, measured across 300 companies. Source: McKinsey & Company, The Business Value of Design, 2018.
The 32 percentage point figure from McKinsey measures correlation, not direct causation. Companies that invest heavily in design often invest in many other areas at the same time. Sinh Vũ cites this figure to raise a question, not to claim a guaranteed result.

Where to start when you want to stop depending on one person

You don't need to redo everything at once. You can start with three specific areas.

First: check how new clients find your company when no one they know has referred them. Try searching for your company name in a search engine.

Ask someone who doesn't know your company to read your website and tell you what they think you do. If they can't explain it within ten seconds, that is the first problem to solve.

Second: pick the two or three most important touchpoints (the moments when clients meet the brand), usually the welcome email, the contract, and the periodic report, then make those three look consistent and professional.

This is where a brand is truly felt, not on the website.

Third: document how your best employee explains your services to clients. Turn it into material that others can learn from and use.

Once an explanation is documented and shared, it becomes an asset of the company, no longer the private asset of one person.

A brand shows up through its products, environment, communication, and the behavior of the organization. These are the four things that need to be consistent with one another.

Wally Olins, On Brand

Signs you're in good shape when building an independent brand

You don't need to wait until an employee leaves to find out whether the brand holds up. You can test it much sooner.

  • New clients can find and understand the company without anyone guiding them.
  • Clients refer more people by sending the website link or mentioning the company name, not just by sharing a personal phone number.
  • After a few weeks, a new employee can explain the service properly without the boss sitting next to them.
  • When one person leaves, clients stay attached to the company name and ask about the replacement, rather than walking away with the former person.

This is not an ideal goal. It is the minimum foundation for a service company to grow beyond the people currently working in it.

References

Byron Sharp, How Brands Grow (Ehrenberg-Bass Institute). Marty Neumeier, The Brand Gap. Kantar BrandZ 2020. McKinsey & Company, The Business Value of Design, 2018.

Frequently asked questions

My company mostly gets clients through referrals. Do we still need to invest in a brand?

Personal referral is a very good channel, but it is tied to the referrer's reputation, not the company's. When that person leaves, new clients will not find their way to the company name on their own. Investing in the brand here is not about running ads. It is about creating an independent reason for clients to remember and trust the company.

How do you tell whether a company's brand is tied to a person or to the organization?

Try asking a past client: who do they call when they need something, a person or the company? If they look up that person's personal phone number instead of going to the website or calling the main line, the answer is clear. Another sign is that when a key employee leaves, clients ask after that person rather than asking about the progress of the work.

How is building a brand for a B2B service company different from a consumer product brand?

Very different. B2B clients buy with logic and need to trust you before signing a contract, so the brand has to convey capability and ways of working, not just imagery. Guidance documents, how a contract is laid out, how emails are written, how staff explain the service: all of it is the brand. The logo is only a very small part.