Category: General


Marketing is an investment in firm’s future

Marketing is like any well managed investment, as it can increase a firm’s revenue. However, because most firms’ accounting systems treat marketing costs as expenses, it is often difficult to make the shift to thinking of marketing as an investment rather than an expense. As a general rule, firm marketing efforts should be directed at four distinct market segments: existing clients, referral sources, targeted prospects and the general business community.

Existing clients
A firm’s immediate objectives for marketing to this group is to create satisfaction, continuity and gain additional work and referrals. Cross selling to an existing client has the greatest potential for short-term payback because the client relationship already exists and the cost of selling is much less than to a prospective client. Concentrate your marketing efforts on ensuring that the client knows that your firm has expertise in other areas. When a client is dealing with a difficult problem and the firm has the expertise to assist, introduce one of your specialists in a relaxed and non-goal oriented atmosphere to discuss the problem with the client. In these circumstances, the client is more likely to ask your firm’s specialist for details about the specific ways that he or she can help.

Referral sources
Your marketing objectives for this group are both short and long term and include improving your interactions with your existing referral contacts, and ultimately, gaining more referrals overall. Maintain a healthy relationship with your existing contacts. Keep in touch by phone, through lunches and other means to ensure that your firm continues to come to mind when an appropriate referral opportunity arises. Develop productive new referral contacts by establishing a visible presence in business, sporting and social groups where these potential referral sources gather. Be patient. No matter how successful you are in connecting with these groups, it could be several months before a new referral source is comfortable with you and understands enough about what you do to recommend your firm to a prospective client.

Targeted prospects
Turning targeted prospects into clients should be the most important long-term objective of a marketing program, since this is where the future growth of a firm lies. Firms need to define and prioritise target prospects and identify those where the firm has the highest likelihood of making an impact. Firms can then focus their marketing efforts on the activities that will provide the greatest potential payback.

General business community
Since a firm is unlikely to gain new business quickly from this group, the marketing goals should be more general and long-term. Engage in marketing to provide good local exposure, build a reputation as an active and committed member of the community, and create personal relations with key business officials.

A strategic investment
While the marketing tactics used to reach each group helps to build awareness, enhance your firm’s reputation and get face-to-face contact, it is still the personal involvement of the partners and professional staff with each of these groups that ultimately gets the business. By promoting the view that marketing dollars are a strategic investment rather than an expense, management can set the ground rules for investing those dollars where they can obtain the highest return. Like other internal investments such as training and technology, marketing is an investment in your firm’s future. Firms that maintain their marketing investment in the bad times and increase it in the good times will have a better payoff over the years than those with a more short-term view.


Developing your firm’s identity

As firms continue to develop their marketing abilities, the need for a unique identity becomes more crucial. Unfortunately, too many firms ignore this fact and fall into the trap of thinking that giving the best possible service will naturally grow the firm’s client base.

Firms need to focus time and energy on their identity for several reasons. Clients take it for granted that services will be quality-driven, on time, and completed in a professional manner. And every firm competing for business offers higher quality, quicker services and lower fees. If a firm maintains that providing quality work at competitive rates will create a positive identity, the firm will only succeed in turning its identity into a commodity. This image is insufficient because someone will always come along and offer better and lower cost services than the firm can.

If firms cultivate a brand identity and create added value, clients will pay more because they will be receiving specialised services. They will take pride in using firm services and recommend the firm to friends and business associates. Firms who want to develop their image but are unsure where to begin should start with the following:

  • Identify your top-tier clients. These are typically the ones who provide the most income for your firm. These clients should be regarded as representing your future and used as models when prospecting for new clients.
  • Research the industries of those clients; understand their challenges, regardless of whether those challenges involve your services or not. Look at the future through their eyes. Align your resources to the challenges facing those clients. Use your firm’s professional experience, along with the knowledge that you have gained from your research, to get your feet under their table.
  • Use your brand identity to become a centre of influence capable of giving valuable advice to your current and prospective clients. Employ your brand identity and knowledge in all of your marketing activities.

There are many useful tools that can help firms in their marketing endeavours, such as newsletters, email marketing and online channels. It is important to remember that however much you employ these valuable marketing tools to grow your firm, your efforts could be wasted if you have no identity that distinguishes you from your competitors.


The assertive accountant

There are accountants driven to secure good business and careful to keep it from slipping out the back door. There are accountants who are good technical people but who are tentative in marketing situations. And there are accountants who pay lip service to marketing, but who lack the time or inclination to become good marketers.

These days, it tends to be those who are assertive in securing business who receive the openings. Assertive firms and assertive partners are successful because people admire firms that openly cultivate new business. Clients assume they will receive better service from them, and be treated better than they would by firms who stand aloof. Not surprisingly, assertive firms usually have enough capacity to accept new clients and perform well for them.

Assertive firms also have excellent follow-up, pay attention to detail and ask for business. This sounds simple, but it is the key. Many accountants expect to receive business from a prospective client, but will not ask for it.

Assertive firms market additional services to their current clients. When clients make greater use of a firm they become more loyal because the relationship feels more substantial. The insurance and banking industries have recognised this for years, which is why they want you to cross sell their services.

Finally, assertive firms are more accessible to clients and always tell clients how much they appreciate their business.This makes for a strong bond of loyalty and appreciation and tends to be a much more proactive form of contact with clients.


Turning client complaints into compliments

Employees frequently concentrate on the positive side of their conversations with clients, and often fear management disapproval if a complaint comes to light. This can often hinder what otherwise might have been healthy and useful criticism. Complaints can show a firm what needs to be changed, so accountants should work hard at generating honest feedback from their clients, be it positive or negative.

One way to solicit feedback is by simply asking clients to provide it. An example would be sending a personal letter to clients that includes a questionnaire, or invites them to call if they have any complaints or problems.

Following up this initial contact with a telephone call to arrange a meeting with clients is another good way to discuss the services the firm is providing for the client. Although clients may typically begin meetings by saying that there is ‘nothing wrong,’ a little probing usually results in the client saying what they really think.

Once back in the office, accountants should write a report outlining their findings, striving to be as specific and candid as possible. If a client complaint concerns a specific employee, it is often best to speak directly to him or her about the problem, and try to determine what can be done to rectify it.

Generally, complaints are best handled by the people that can do the most about them, which is usually the person in charge of the particular area. A complaint about the firm’s telephone system should go to the firm administrator while the personnel manager would handle a complaint about a secretary’s rudeness. However, clients can complain to any member of staff, so handling them should be everyone’s responsibility.

If a firm decides upon this approach, adequate employee training is critical. Employees must be made to feel that they play an important part in customer service, and it is the responsibility of management to encourage this company ethos.

Firm should present customer service training to employees in a way that puts them at their ease. Let them know that it is healthy criticism, which should not be taken too seriously. Do not blame or praise, because this could lead to resentment or low morale. Feedback should always be presented in the context of, ‘How could we do this differently?’

Firms may start to see improvement in a very short time, but this process can take as long as a year. Training your staff to look at clients more closely is an easy and effective way to measure client satisfaction on a daily basis.


Client satisfaction surveys

Very few firms have ever formally survey their clients, and even fewer have a plan to solicit feedback on an independent firm-wide basis.

Some of the reasons given by accounting firms include:

  • “The feedback won’t tell us anything we don’t already know.”
  • “Now isn’t the right time.”
  • “We’re too busy serving clients.”
  • “We have no intention of changing.”
  • Not wishing to give clients the opportunity of saying something that partners don’t want to hear. Many firms feel that feedback would set an expectation of change, and they would rather not set that expectation.

Another key reason why firms don’t solicit feedback is that they lack the ability to develop an appropriate, effective survey and are not prepared to investigate options for outsourcing.

When firms do have client surveys, they are usually too lengthy and in some cases more complicated to complete than a tax return. Clients are given too many questions and within those questions too many options.

On the other hand, firms who have conducted client surveys report:

  • Being surprised at the response from clients – they recognised that they had never fully appreciated their clients’ views regarding their services.
  • Identifying service improvements that could be implemented almost immediately – often at little or no cost to the firm.
  • Referrals and requests for additional services
  • Client requests for change of personnel (otherwise they would find another service provider)
  • Improved profitability and cash flow. If a client keeps saying you’re doing great work, it is easier for them to pay your invoice quickly and in full.

Client surveys are undoubtedly a worthwhile investment. But here are a few words of caution, for when you conduct your client survey:

  • Make sure you thank every client who responds
  • Ensure you follow up any areas where a client expresses dissatisfaction
  • Broadcast the results firm-wide with your proposed follow up action plan
  • Consider carefully the format of the survey
  • Consider what is an acceptable standard of service before you start. Is “adequate” the level you are striving for, or is “excellent” the standard you are seeking?
Why do accountants hesitate at the thought of predatory prospecting? 0

Why do accountants hesitate at the thought of predatory prospecting?

Even though a predatory approach is common in other industries, it is still comparatively rare in the accounting profession, and many accountants balk at the idea of taking clients away from other firms.

Though there might be ethical considerations pertaining to particular cases, in general there is nothing unethical about offering a prospect a better service than he or she is presently receiving. If the client is genuinely dissatisfied he or she will respond to the overtures of others, in which case the client is doing what he or she wants and there is no question of impropriety. Conversely, if, despite being dissatisfied, the client resists the overtures of others and sticks with his or her existing accountant come what may, again the client is doing what he or she wants and there is no question of impropriety.

The truth is that many partners are reluctant to prey on others’ clients out of fear that the same might happen to them. This is a different matter. In a truly competitive environment, the forces of competition work both ways, and there is no way you can hope to win business from others without running the risk of others taking business from you.

The fact is, of course, that this kind of competition has already entered the accounting profession, and no one is going to turn the clock back. The only question is how you are going to respond to this development. Are you going to see it as a threat and mutter disapprovingly while your competitors steal your best clients, or are you going to see it as an opportunity and begin actively prospecting yourself?

Sometimes the need to change accountants is brought on by problems or changes of routine within a business’ accounts department. Often the telltale sign that an opportunity exists is when a business advertises in the newspapers for accounting or bookkeeping staff. This is a particularly lucrative breakpoint, because a business is more likely to consider changing accountants when their own accounts department is under review. To pick up on these opportunities you regularly need to:

Check newspaper classified advertisements for accounting positions
Where you see advertisements, write to the company and suggest a meeting. Where possible, be specific i.e. if the advertisement is for a staff member in the credit control department, mention how you can help solve their credit control problems.

Listen to industry grapevines
Talk to your friends and clients in the industry and listen to what they say about their competition. If there are rumours of a company experiencing accounting or financing problems, contact the company and suggest ways you can help.

Talk to employees
Whenever you talk with a bookkeeper or credit controller take the opportunity to ask a few probing questions about their internal accounting system. If it is appropriate, offer them a free hour of your time to help with any problems they might be experiencing.

Financial state of a business
It is important to keep tabs on the financial state of target prospects. Though few business owners will consider changing accountants when things are just ticking along smoothly, some might be tempted to look for a better deal when things are going well, and most will seek fresh ideas and help when things are going badly.


Firm rainmakers

Most successful professional services firms have a few stellar individuals who are talented at uncovering potential business opportunities and turning them into new sources of revenue. These are the rainmakers; the professionals relied on to develop new contacts, build the firm’s reputation, and create positive relationships to develop the existing business and gain new business.

Developing rainmaking skills is not complicated. It is a simple process that you can modify and master to fit your personal style and temperament. If you are willing to invest the time needed to develop these skills, you will greatly enhance your ability to sell yourself and your firm to potential and existing clients. Below are some of the essential skills that are common to all rainmakers, skills that every professional in your firm can develop.

Rainmakers are highly accessible.They don’t stay in their offices; they get out and meet people. They give prospects and clients their direct phone number, email address and fax number to make sure their contacts can reach them. They are willing to take extra steps, whether it is in the evening, on a weekend, or during a vacation, to pursue opportunities to talk with genuine prospects and clients.

Rainmakers make client development and marketing an ongoing priority. They are prepared at all times to talk about what they do and welcome contact with others during their daily work routine. When a client or prospect calls, rainmakers set aside the task at hand to focus their attention on what the caller has to say, conveying clearly that the caller is an important person.

Successful rainmakers understand that strong business relationships are the result of many points of contact. They keep in regular touch with potential and existing clients because they understand that successful professional marketing is all about maintaining informal, relaxed and non goal-oriented encounters. They set out regular contact schedules and mark the day in their planners to make the call to chat or book a lunch. Rainmakers know that prospects and clients appreciate a call just to find out how they are doing, and know that these calls can generate more business than those that are made explicitly to solicit new work.

Rainmakers often form personal bonds with prospects and clients that extend beyond typical business relationships. They recognise that their clients are individuals who may want to confide in someone outside of their own business environment, and that the most important thing they can do is to listen, even when the topic does not relate to their services. Their caring attitude gives prospects and clients a powerful emotional reason to choose the rainmaker’s firm over others.

Successful rainmakers exude professionalism, credibility and confidence. Their refinement, deportment and manner of expression reflect the well-educated and polished professionals they are. They pay close attention to detail and appearance. They go to great lengths to ensure that prospects or clients never see or hear anything that might reflect poorly on, or damage, their or their firm’s reputation. They consistently project genuine respect and a warm and friendly attitude at meetings and during informal contacts. They know their chances of winning new business increases dramatically when the prospect or client is comfortable in their presence.

Rainmakers understand that winning new clients is a never-ending numbers game; to win a new client, you need to have an adequate supply of prospective clients in the pipeline at all times. They know that if they are not actively developing contacts today, there will be no new business tomorrow.


How to secure an appointment

Ideally, at some point after speaking with a prospect they will suggest a meeting, but it is more likely that you will take the initiative. Don’t rush, and don’t push!

You should take the attitude that the benefit will flow from yourself to the prospect, not from the prospect to you. You are offering to help the prospect; not asking for a favour. If he or she does not accept your help, don’t worry. You should be very low key. There will always be another time.

Remember, the degree of credibility you have is proportionate to the extent to which the prospect perceives any hard sell from you. If you have just met the prospect, he or she is not yet in a position to trust you because they have not had the time to develop confidence in you – so don’t sell in a social context.

Moving for an appointment too soon reduces your chances of success. Until the prospect is sold on you or your firm, he or she will probably say no. The confused mind always says no.

How do you know the right time to suggest an appointment? It is when you have buyer interest. The prospect could be ready to agree to an appointment at any time during your relationship. To know when that moment has come, watch for appointment signals. A signal will not often be as obvious as your prospect saying, ‘Could you help me? I’d really like to talk to you.’ The signal may be subtle or even disguised.

Up to now, the flow of information has been principally from the prospect to you. You have listened, probed, and learned about the prospect’s business. At the same time, the prospect has also been learning about you, although you have been fairly low key up to this point.

The appointment signal indicates that the prospect wants to reverse that flow. He or she wants more information to flow from you to him or her. More specifically, you now have the prospect recognising a possible need, or developing a mild curiosity about the possibility of there being some value to him or her.

Once you have made an appointment, it is wise to bring the conversation tactfully to a close to avoid the interview starting there and then. It is unwise to delve too deeply into the prospect’s situation at the first meeting for the following reasons:

  • the atmosphere is frequently not conducive to serious business discussion
  • the prospect may not feel that the relationship is sufficiently ‘seasoned’
  • you give the prospect the chance to change his or her mind and cancel the appointment

Once you have made the appointment it is usually best to end the conversation and move away from the prospect. Continued conversation could give them an opportunity to change their mind. If you cannot disengage tactfully, then at least change the subject to one that is unrelated to business. Where possible, meet in the prospect’s office. There are several reasons why this is preferable:

  • you will probably be discussing confidential information, and you cannot do this in public
  • the prospect will be more comfortable
  • you can control the length of the meeting
  • information to which the prospect may need to refer will be available
  • you may gain access to the accounting records if the sale is successful
  • you can pick up clues about the family from items on display
  • you can get a feeling for the business
  • you can meet those who influence his or her decisions

Preparing for client interviews

Before embarking on an interview program, here are some preparation tips that help ensure success:

  1. Select the clients that warrant a personal interview. Ideally, these should be your largest clients or the ones that have the highest future growth potential.
  2. Develop a profile for each client you plan to interview including details such as their type of business, management profile, any past problems or issues, and questions to be asked or avoided.
  3. If you have conducted any mail or telephone surveys with these or other clients in the past, review the results to determine which areas and issues are seen as particularly important.

Scheduling the interview
Once you have this information, clients should be contacted to review the objectives of the interview and to assure them of the confidentiality of results. The initial contact should be done by telephone or in person, and you may wish to give the clients a preview of the questions you will ask and the issues you will address to help them consider their responses before you meet with them.

It is not ideal to have the professional responsible for managing the client relationship do the interviewing. Clients tend to be less than candid with an individual they work with on a daily basis. Candor and objectivity are essential elements of a successful interview. So is the ability to note the nuances and non-verbal signals such as body language and facial expressions that are often true indicators about how a client really feels about a service issue. Also important is the interviewer’s credibility with the client, knowledge of the firm and its services, experience in interviewing, and ability to report honestly on findings and make meaningful recommendations.

Therefore, one or more members of the firm’s senior management, such as the managing partner or a practice group leader are usually the best qualified to conduct interviews. Unfortunately, many of these individuals are often constrained by other firm responsibilities. Some firms have overcome this difficulty by using retired partners for the interview work. Retired partners with the time to devote to the project can help ensure an effective client interview program.

Conducting the interview
Whether the interviews will be conducted by one of the firm’s senior staff, a retired partner or an outside consultant, the interviewer needs to do the following to ensure consistency and meaningful results:

  • Review the client’s profile and the services you have provided to the client.
  • Use an interview guide to ensure all areas of importance are covered.
  • Ask the questions as worded and in sequence to maintain consistency and reliability of results.
  • Maintain your objectivity when asking questions and avoid offering opinions.
  • Take copious notes and record the information as accurately as possible.
  • Complete your report on the interview as soon as possible while everything is fresh in your mind.

Acting on the information
Many firms will go through the motions of surveying clients and compiling the results but then fail to implement the changes needed to improve the service delivery issues raised by a client. The firm that is unwilling to learn from and act on client feedback should not be surprised when a long-standing client selects another firm as their professional services provider. A client satisfaction program is an opportunity for your firm to find out how it is performing in the eyes of your clients.

In addition, such a program shows that you are a true professional and care deeply about the quality of work you provide. And best of all, when your firm acts on the information received from a client satisfaction survey, you will be using one of the most effective tools available in the client retention process.

When does a client consider changing firms? 0

When does a client consider changing firms?

The period of time during which a client is open to the idea of changing accountants is a window of opportunity for your firm. Generally, this window has two stages:

  • The passive window of opportunity, when a client is not actively seeking a new accounting firm, but is open to approaches from other firms
  • The active window of opportunity, usually a much briefer and more intense period, when the client is actively seeking a new firm

Judging these windows of opportunity is crucial, because timing is everything when it comes to signing prospects. If a prospect shows any interest at all, you should stay on their case and try to secure them while the opportunity lasts. If the prospect does not yet want to meet with you and asks you to call back, attempt to set up at least a tentative appointment to speak to him or her at a later date.

If you miss the window of opportunity, it is almost impossible to convince the prospect to consider your firm. Clients feel most positive about their accounting firm when they have just passed a window of opportunity. For one thing, they have just been through the whole decision making process and are extremely unlikely to want to start all over again; and for another, having just chosen a new firm, they are going to give them some leeway before starting to make judgements about their service standards.

Being in at the beginning of a window of opportunity is therefore crucial. This is helped by the fact that the decision to change accountants is rarely taken hastily and generally occurs at certain natural breakpoints. These breakpoints are often signalled in advance, sometimes as much as a year or more before the client starts to give serious consideration to the matter. The secret, therefore, is to learn to read these breakpoints and to time your approaches accordingly.

Breakpoints related to the lifecycle of a business:

  • Startup: the first year

Few businesses will consider changing accountants in the startup phase unless they are under external pressure to do so. They are still feeling their way, trying to establish themselves, and will be loath to change with so much at stake.

  • Growth: the second to fifth years

The second phase, which is usually one of steady or rapid growth, is a different matter. If the business started off using a sole practitioner, which is very common, they will probably by now be looking for a firm of greater substance to take on their expanding servicing requirements. This is the time when their present accounting firm is more likely to relax its accountant-client marketing and start to take the client for granted. Clearly this is a period during which possible breakpoints are likely to occur.

  • Consolidation: the sixth to tenth years

In the third phase, the consolidation phase, the business is fairly stable and there is little appetite to rock the boat. Generally, only drastic developments would persuade a business owner to consider changing accountants at this stage.

  • Maturity: the eleventh year onwards

Finally, very few businesses change accountants once they have reached the stage of maturity.

Breakpoints determined by business succession:
One of the best opportunities occurs when a business passes to a younger generation. The new incumbent is more likely to consider changing accounting firms for three reasons:

  • They are less likely to be emotionally involved with the history of the business
  • They probably have little loyalty to the existing accounting firm
  • They are usually keen to assert their authority by making changes to their inherited regime

Generally, the younger the business owner, the better are your odds of winning the client. Get to know the son or daughter who will be taking over the family business, or any lower level decision maker who will eventually rise to a position of authority. Many accounting firms get to know the managing director and the accountant, or whoever is currently in power, but ignore those who will be inheriting the business from them. This can cause resentment in those climbing the ladder, so when they do come to power they often make a change simply to be free of ‘Dad’s accountant.’

Breakpoints determined by change of ownership
Although the sale of a business to a new owner presents an opportunity to change accountants, there are some factors that might make this difficult:

  • The existing accounting firm of the new owners might have solidified the relationship by performing important work during the acquisition
  • Both the buyer and the seller of the business might be primarily interested in consummating the transaction, not in considering who should be the accountants

Nevertheless, it is worth persevering and checking with the new owners from time to time because once the initial flurry of activity has died down they might be open to considering a change.

Breakpoints determined by dissatisfaction with the current accountant
Remember that most clients are satisfied with their new accountant during the honeymoon period, just after they have retained them, but very often this satisfaction wanes as minor irritations begin to mount up and the initial gloss wears off. Make a note to give these prospects a follow-up call after the other accounting firm has had a chance.