Building a more Rewarding Practice Means Overcoming the Three Barriers to Specialization

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For years, decades even, accountants have talked about specialization. Building a niche practice has been the subject of articles, conference agendas, podcasts, and discussion among practitioners since what seems like forever. But the discussion is coming to a head as firms continue to struggle with capacity and staying on top of all the changes affecting the profession. A combined strategy of focusing on specific types of clients along with transitioning clients that don’t fit (we call it right-sizing your client base) is the key to solving some of the profession’s greatest current challenges ensuring its future health.

There are three common barriers practitioners and firms must overcome to embrace the opportunities specialization affords. In this post we identify and offer strategies to overcome them.

Barrier 1: perception of boredom

There’s a paradigm accountants must unlearn which is when you specialize it means you only do the same thing over and over. One of the most frequent objections I hear from practitioners at every stage their careers is “I like the variety of (or the idea of) working with lots of different types of clients.” Or put another way “I would get bored only working with one type of client.” The implication is that when you choose to serve only a certain types of clients that every engagement will be the same.

The first step in overcoming this barrier is to acknowledge a fallacy that two businesses, even competitors or those in the same industry, can be the same. The fact is every client is different because you serve people. And people have different views, experiences, personalities, stories, priorities, communication styles and thousands of other attributes that make us unique. The challenges and opportunities they face may be similar, but your approach to solving the issues and your relationships will be different.

The second step to overcoming this barrier is shifting your mindset. What if instead of doing the same thing for every client, becoming a deeply experienced professional means more creative flex? When you start to see a client’s operating environment from different angles because you spend a LOT of time in that space your experience lends itself to more inventive and innovative solutions. Focusing on fewer clients also creates time for deep thinking vs being so bogged down with work that you focus primarily on tasks and keeping you head above water. What if all this enables you to solve more issues and offer more proactive ideas to your clients?

Saying no to the clients and projects that don’t fit frees you to say yes to more challenging, interesting and inspiring work. It creates opportunities to provide solutions to challenges your clients may never have thought you could solve.

In summary: focus is the key to a more diverse practice.

Barrier 2: anticipated negative effect on revenue

It feels counterintuitive that fewer clients leads to more revenue, and that carving off and transitioning a chunk of our practice will ultimately increase top-line revenue and bottom line profits. First, as we already discussed, freeing time and space to do more for our existing clients enables us to bill our clients more. Second, specializing creates an opportunity to market yourself and your firms in a way that makes you more relevant to those prospects that need you than other firms. As you increase your relevance you decrease (or possibly eliminate) your competitors—which means winning a higher percentage of engagements.

Not only that, when prospects recognize the lack of alternatives to your firm the balance of power in the proposal process shifts to you. Pricing is non-negotiable, without scope modifications. You don’t feel pressured to give away pieces of your service or knowledge in order to win the business. You can become more steadfast in your terms of service and timing. You can stop wasting time responding to RFPs that don’t make sense. The entire process becomes more straightforward, with less gamesmanship.

Think about how refreshing that would be. Not only do you win a higher percentage of engagements, you will win with higher fees, fewer write-offs and greater realization.

Simply put: specialization increases revenue and profitability.

Barrier 3: failing to define the specialty

There are two options when it comes to specializing: reactive specializing in which you see what others are doing and seize whatever segment is left or proactive specializing to make your own space. Often firms think about specialization in terms of industry, which has lots of advantages, but there are lots of ways to define it. Region or location can be a specialization if you’re very well connected and articulate the value your local roots and connections bring to clients. You can specialize in a service model, like remote/tech enabled. You could be the firm that only meets at the client’s site or that works with family-owned businesses.

Most people start to define their niche on the basis of where they are today. They look to where they have concentrations of clients or their existing skills. This can be a good approach if you have passion for serving those kinds of clients, but you should be be wary of being held captive to the opportunities you have already had. You may find greater joy and satisfaction from diving in to something completely new, as long as you have the patience to recognize that diversification like this is a longer-term strategy than expanding an existing area. There’s no right or wrong way to start—as long as you start. A lot of folks “dabble” in one area or another. Dabbling is the enemy of specialization and gets you nowhere.

Regardless of where you start, follow these steps:

  1. Choose a focus
  2. Articulate the expertise frequently, consistently among your target clients (both current and prospective)
  3. Continue to work to add the missing skills, capabilities and processes to support your positioning

Often accountants make the mistake of switching steps 2 and 3—feeling that they can’t start talking about their specialization until they know everything. Let’s unlearn the definition that “specialize” means you have to know all the answers. Instead re-frame the definition to mean being dedicated to and connected enough to help find all the answers. It’s the epitome of what it means to be an advisor to clients.

The takeaway: if you don’t decide, you won’t specialize.

If your professional goal is to do more for fewer clients, explore some level of specialization. Like most things, specialization is a continuous learning journey. Be ready to not have all the answers. However if you’re committed to finding them, limitless possibilities await.

It’s Time to Embrace Virtual Learning

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If you’re one of the thousands of people who has recently transitioned to a remote work environment in the past month or so, hopefully you’re beginning to find your rhythm. The current pandemic has forced some professionals to adopt work from home (WFH) protocols, and some firms to support it perhaps before being “ready”. There is no doubt that the accounting profession has been transformed. It remains to be seen how much of this transformation will remain after the pandemic, but it’s likely that some of the remote tools and processes adopted are here to stay.

Clients too have been disrupted, limiting your access to them. And with most deadlines now pushed into summer you may discover your engagement timelines have shifted to later in the year leaving you in need of new ways to stay engaged, connected and on track with your educational requirements.

We are all operating differently from the norm – both personally and professionally. But as we start to normalize remote work and become comfortable with the associated technologies a new opportunity emerges. Now is the perfect time to explore remote learning options. Not only can learning be a great way to stay engaged professionally, but it also benefits mental well-being in times of stress or anxiousness.

With all that said, there has never been a better time to embrace virtual learning.

Four advantages of virtual learning

1. It’s convenient. Virtual learning opportunities are really convenient. There are many on-demand options that are there when you are ready. Look for offerings from recognized professional training organizations that offer their content digitally. Not only can you work around your schedule, you can also work around your needs—being specific and intentional about which topics/courses are most important to you.

At some point, when we have greater flexibility in leaving our homes, virtual learning can happen in whatever place is convenient, inspiring or comfortable for you. That may be your home office, your back deck, your local coffee house, your library – or any other location you choose.

2. It’s economical. In addition to saving the out-of-pocket expenses associated with traveling to conferences or classes, you can save that road time. This means more time home with friends, family, pets, or whatever communities are important to you. Learning without having to be away for days at a time may help you keep your work-life balance in check.

The convenience and cost effectiveness of virtual learning means you may not have to be so concerned with leveraging your investment to ensure you’re getting necessary CPE credits. For a lower investment of time and money you can explore all kinds of soft-skills without worrying about diverting resources away from technical learning. It can open an entirely new world of content!

3. It’s adaptable to your pace. There are lots of terrific remote learning options that allow you to go at your own pace. These self-study courses can offer opportunities to earn continuing professional education credits not only on a schedule that works for you, but gives you control over how quickly or slowly you engage with the material. Struggling to understand a concept? You can take extra time to review, practice and research it. Ready to move on? You can do that too.

4. It’s JIT. Virtual learning can be done in small, highly relevant bits. If you’re struggling with a specific skill, you can find a 50-60 minute course with a few tips or ideas to practice and immediately apply those to your situation. You may even start with a 10-15 minute podcast to get a fresh perspective. This opportunity for just-in-time (JIT) learning is not only practical but encourages greater retention of the material. As soon as your course is finished, ask yourself what you can apply immediately and what you need to stow away for later.

Making the most of your virtual learning

  1. Make a plan. Like many things, your learning journey will be more effective if you have a plan. Take time to map out what skills you want to develop. Consider where you are now, who you are, and where you are headed and develop a curriculum that meets your needs. If your firm has a formalized career path use that as a guide. In particular, think about what skills you need to become a business advisor to your clients: critical thinking, questioning skills, industry knowledge, etc. You can also work with a coach, mentor or other career advisor to help map this. Then begin to research opportunities to support your learning plan.
  2. Be holistic in your approach. A benefit of virtual learning is the ease and cost effectiveness with which you can explore ideas and skills. Don’t ignore the soft skills in your plan. Consider those skills that will make you well rounded and what you need to move to the next level of your career (i.e. business development, delegation, relationship development, communication, etc.).
  3. Build a “learning community”. One of the perceived downsides of virtual learning is not being able to interact with other participants. Be creative and deliberate about building your own learning community. Use tools like Zoom or Teams to connect with others in your firm who may be on a similar learning path. Also, look to your peers outside your firm. Build a small network of folks you can interact with regularly to discuss what you’re learning. Many “soft skills” are applicable to other professionals, so learning along with those individuals and discussing how to practice what you’ve learned with folks outside your firm can be valuable. Use social media tools like LinkedIn or Twitter to connect with a community of other professionals. Just because you are engaged in more independent learning doesn’t mean you can’t reap the benefits of collaboration.
  4. Utilize a variety of learning resources in your portfolio. Webinars and self-study courses are good options for virtual learning, but there are a many other formats that cater to different styles of learning. Consider podcast subscriptions (you can usually download podcasts and listen to them while you are exercising, cooking, riding public transportation (when we’re back to that), or in any other number of situations. Blogs and other online publications are another alternative. Mix and match your sources to not only keep it interesting but offer the greatest amount flexibility. Even social media platforms like LinkedIn and Twitter offer content originated by sources like accounting publications, the AICPA and your state societies.
  5. Start small – pick a few. The sheer number of options can seem overwhelming, so start small. If you’re new to virtual learning, select a 50-60 minute course and try it. Subscribe to one blog and see if it delivers value. Explore a podcast or two and see how the content fits with your need. Evaluate. Ditch anything that doesn’t seem to work. Hint: like adapting to remote work, you may have to give yourself a bit of time to adapt to the format. Don’t give up after one or two tries.

Virtual learning resources

If you need resources to get you started, check out this list of ideas:

• Journal of Accountancy, offers a free podcast created to talk about key issues the accounting profession faces
• Big Ideas Podcast, is a free podcast series by the CPA Consultants’ Alliance about important issues that the accounting profession is currently facing.
• CPA Academy, is national provider of high-quality, online and self-study CPE.
• The Whetstone Growth Academy, a web-based, over-your-career professional development training series for accounting professionals.
• #TaxTwitter, if you’re on Twitter follow this hashtag. You’ll learn a wealth of information and build a community of tax experts who are collaborative, generous, smart and funny. It’s also one of the best examples of a virtual learning community. So even if tax isn’t your thing use it as a model for building your own community.

Finding what works for you may take some trial and error. Don’t put off learning until it’s convenient or when, if ever, we’re back to “business as usual”. Embrace this opportunity. Harness the power of virtual learning as a tool to continue personal growth both now and in the future.

Your Future Firm Starts Now: Success Strategies for Launching New Services – Part 3

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We are taking a closer look at a process firms can use to evaluate and develop new services to meet clients’ needs and create new sources of revenue by building a more consulting-based practice. On Sept. 21st we introduced steps 1 and 2 – Research Market Needs and Evaluate and Prioritize.  Oct. 3rd we examined steps 3 and 4 – Define the Scope and Go to Market with Your Service. This week we conclude with step 5 – Tracking Results and Measuring Success (including a downloadable guide for the whole process).

Step 5: Measure your results

What gets measured (and reported)…gets done.  When you analyzed the costs of building this service capability in step 2, you likely got a feel for the level of revenue you need to reach profitability.  Set a specific sales goal for the new service, allowing for ramp-up time to go to market appropriately. Services with high levels of opportunity within your existing client base will become profitable more quickly than those for which you must go outside of the existing client base to find opportunities. Develop a pipeline report to track opportunities associated with the new service – including the stage of the sales cycle, value of the opportunity and probability of closing.

It’s helpful to assign responsibility to an individual or team to be held accountable for reaching the goal, and measure their results regularly throughout the year.  Hold regular meetings to evaluate results and discuss what, if anything, is getting in the way of success.  As these success barriers are identified, discuss how to resolve or work around the issue and provide support to the service champion/team.

Establish accountability for sales results for your new service by incorporating the goal and results into the individual/team’s annual goal setting, evaluation and compensation discussions.

Conclusion

This series has discussed a 5-step process for successfully introducing new services:

  1. Research market needs
  2. Evaluate and prioritize new service ideas
  3. Define scope and communicate
  4. Go to market
  5. Measure results

Addressing each of these steps with the discussed approach will improve your ability to continue meeting your clients’ evolving needs, attract new clients, and sustain profitable growth for your firm.

We’ve summarized the approach described the past few weeks in our New Service Evaluation Checklist. To download the checklist click here.

If you are interested in learning more about how to implement these steps, or how new services fit into your firm’s overall approach to topline growth contact us at info@thewhetstonegroup.com or 319.447.6400 for a no-cost, no-obligation meeting.

Your Future Firm Starts Now: Success Strategies for Launching New Services – Part 2

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We’re continuing our look at a process firms can use to evaluate and develop new services to meet clients’ needs and create new sources of revenue by building a more consulting-based practice. September 21st we introduced steps 1 and 2 – Research Market Needs and Evaluate and Prioritize.  In this post we introduce steps 3 and 4 – Define the Scope and Go to Market with Your Service. Check back October 19th as we conclude with step 5 – Tracking Results and Measuring Success (including a downloadable guide for the whole process).

Step 3: Define the scope and “package” your service

Now that you’ve selected the service(s) you want to launch, help ensure your success by defining the scope of the service very specifically and communicating it to the appropriate people in your firm.  “Scope” includes the step-by-step process and tools your service providers will use to deliver the service, what participation is required from the client, the time it will require from both your service providers and the client, and the frequency of delivery of the service.

This step is important for a couple of reasons.  First, it ensures consistency in the quality of your service delivery, which protects your client relationships and helps maintain your brand.  Secondly, this specific scope definition goes a long way to familiarizing your staff with the service so they are comfortable having conversations about it with their clients.

Once that scope is defined, your last step before taking the service to the marketplace is packaging. Packaging includes:

  • The name of the service: Ideally, it’s a good idea to identify a name for the service that will communicate benefit(s) and at the same time be attention-getting and memorable. This isn’t always easy – or even possible – but is worth putting in the time brainstorming and even testing with a client or two.  Many times your opportunity to catch someone’s attention and hold it is fleeting – a good name could really help when you’re trying to generate interest in your new service.
  • The deliverables and benefits: Make sure all your people know what the key deliverables of the service are – what tangible take-aways the client receives.  Clients will want to know this; but even more importantly, define the key benefits of the service – the tangible and intangible improvements for the client.  Communicate these benefits internally so your people can effectively promote the service, and make sure they are incorporated into your web site and marketing materials for the service.  Clients and prospective clients will not take action until they understand “what’s in it for them” – the potential benefits of engaging you for this service.
  • Pricing: Hopefully you have a feel for what clients will be willing to pay for the service from your earlier research.  People prefer to pay a flat fee for a service rather than being quoted an hourly rate and paying for time, so be sure to estimate the time investment and identify a recommended flat fee that  pays you profitably but reasonably given the benefits and value proposition to the client.  It’s not necessary or even recommended that everyone in the firm understand the fee for the service; it’s always a better idea to quote each client individually based on the scope of their needs; the service experts will have the best understanding to do that.

Step 4: Go to market

Patience will be important for your go-to-market strategy as there are important steps to follow to ensure success:

  1. Beta test
  2. Define target market
  3. Develop messages
  4. Communicate messages to target market
  5. Proactively follow up to generate new business leads

Beta test

If possible, beta test the service with one or two clients to work out delivery issues, identify and resolve problems, make sure the deliverables are on point, and discover if the service works in reality the way it works in theory.  Be candid with your client(s) up front and explain they will be doing you a favor but also receiving service benefits for no or greatly reduced fees.  During the project, check in with the client(s) to find out what questions and concerns they have and incorporate these into the way you deliver the service going forward.  Make sure your clients understand the benefit they received and when it’s over, ask them if they are willing to go on record with a testimonial you can use in future marketing and/or serve as a reference for future clients.

Target market

Based on what you learned in your initial research and your beta test(s), think about who the best targets are for the service.  It’s actually better to focus on a narrow, very specific target market:

  • you can tailor your messages more directly to them;
  • it’s easier to determine the right channels through which to communicate with them;
  • you can communicate to a smaller number of targets more frequently with a given budget.

Think about what type of companies have most need for the service based on industry and even sub-group within industry (e.g. sub-contractors within the construction industry), size (annual revenue, number of employees), ownership (private vs. public, closely-held/family-owned, etc), geographic location (where you can profitably serve them and they will recognize you as a viable provider), situation/circumstances (own vs. lease building, profitability, stage in growth cycle, etc).

For almost every target market, there are sources available to acquire a list of companies that matches your criteria.  If there are variables for which you can’t filter when you purchase it, consider having someone call the companies to ask the appropriate questions to further segment your list.  This can be a good task for an intern or new staff who aren’t yet busy, or you may choose to outsource to companies who provide this service.

Messages and communication

Now that you have a clear picture of who you’re talking to, develop the messages that will get their attention about your new service.  Focus on the benefits of the service as it relates directly to their business, and the potential value proposition of engaging you to provide it.  Make sure you address what differentiates your from competitors providing the same or a similar solution. Answer the question: why are you the best alternative to resolve this issue and/or deliver these benefits?

Below is a list of ways you can get your message to your targets, in the recommended chronological order of implementation:

  • Have face-to-face conversations, starting with your current clients in the target market
  • Incorporate on your web site, in blogs, social media profiles/groups
  • Send direct mail/email
  • Hold seminars and/or webinars
  • Promote the topic to industry groups via speaking engagements and articles

This will require you to develop a variety of materials.  Whenever possible, incorporate the testimonial from your beta test client(s) and continue to add testimonials as you grow the practice and have more satisfied clients.  It is always more powerful to have your clients state the benefits and value proposition.  Tie the materials together with similar content and graphic elements so you build a “brand” for the service that fits with the overall brand for your firm.

Frequency of communication is vital.  We’ve all heard the concept that people need to hear a message multiple times before it resonates.  The number required keeps going up because of the increasing number of competing messages to which people are exposed, through traditional media, social media, email, etc.  Don’t be afraid to make at least quarterly “touches” with your target market regarding your service and the benefits it delivers.  If you’re varying the method of communication (direct mail, invitation to seminar, promotion at industry conference, newsletter article, etc.) it won’t feel like too much to your clients and prospects.

Follow-up

It isn’t enough to simply put your messages out there; we’d all love to believe if we build it they will come, but that’s movie fantasy.  Proactive follow-up is a necessary component of any successful go-to-market effort.  The goal with your follow-up is to get face-to-face with each client or prospect so you can have a needs-based conversation, present the benefits of your service, and move the sales cycle forward. The table below gives you some tips on how to follow-up to each of your communication tactics:

tactic_follow-up_approach

Unlock Professionals’ Potential by Redefining Your Firm’s Training Approach

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For so long, firms have searched far and wide for solutions to their business development challenges. Young, and not-so-young professionals have participated in what I would, by no scientific means, guess is millions of hours of business development training programs. These programs are touted as creating superstar rainmakers in order to solve the firm’s new business needs and fill the sales pipeline with opportunities. Participants learn tools and techniques to generate leads and close the big sale.

The challenge most professionals have implementing the skills from business development training is twofold: First there is a natural aversion to “sales” the way many professionals think about it—which is going out into the market, telling everyone you meet about all your firm’s services and asking them to hire you. Second, in this context business development becomes an “add-on” skill set, or worse, an added set of responsibilities and tasks on top of what professionals see as their primary job.

When professionals view growth as a secondary responsibility and they have a natural aversion to what they think is required of course the result will be less than ideal. Current partners may perceive this as apathy or a sense of entitlement among the next generation. Young professionals may perceive this as an unrealistic expectation and outdated way of doing business.

The result is often a lack of engagement in activities that lead to organic growth as well as a lack of success in attracting high quality clients. It may cause young professionals to leave the firm, or the profession altogether. It puts pressure on the firm’s ability to fund partner retirements. It may cause a firm’s culture to become production oriented vs value driven.

So rather than as something “extra” let’s look at business development training curriculums for professionals in a new way. Train young professionals to practice their profession in a way that leads to new opportunities—namely the behaviors of becoming a trusted advisor with clients. Start early when young professionals (millennials) are energized, ready to make a contribution and eager to take on responsibility for adding value to clients. Give partners a system for looking at client relationships, expanding opportunities and getting younger folks involved in conversations about clients to share a new perspective based on what they’ve learned in working with the client.

Think about some of the skills that are important to being good at developing new business: relationship development, understanding needs, communication, questioning, problem solving, and trust building. All of these skills apply directly to the process of client service. Teaching these soft skills in the context of working with clients enables young professionals to practice and gain confidence with the skills that will make them great at cultivating new business. At the same time, they are deepening client relationships and creating a more satisfying practice for themselves.

If the firm’s goal is to increase young professional engagement and grow the firm, developing the behaviors of client service that lead to opportunities should be a central component of the firm’s training curriculum.

Firms wrestling with the issue of employee engagement will find that teaching young professionals skills which can be integrated into their core function will reinforce the behaviors sooner—becoming a natural part of the way they practice. The result is professionals who have deeper, more trusted relationships with their clients, create more fulfilling relationships, add more value and derive more satisfaction from their careers. Often this leads to improved retention of rising stars.

Client Loyalty

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CPA firms of all shapes and sizes are taking a long look at their client service process. And it’s no wonder, considering that client service is THE differentiator among CPA firms and is the linchpin in client loyalty.

CPA firms often rely on revenue numbers, realization and chargeable hours to determine how business is going. But by giving your clients a voice, you’ll learn what you can be doing better, how to sustain high performance, and how you can more effectively grow your firm’s top line.

Consider this: a study to quantify the impact of client loyalty on revenue by InfoQuest found that a “totally satisfied” customer contributes 2.6 time more revenue than a “somewhat satisfied” customer, and 14 times more revenue than a “somewhat dissatisfied” customer. If we assume that customers who rate themselves as “totally satisfied” are loyal, it’s clear that loyalty plays a significant role in how much revenue a client generates for your business. Not only that, improving the lifetime value of your client base by increasing client retention levels significantly impacts your firm’s ability to grow its top-line because you aren’t constantly replacing revenue from clients who are leaving the firm.

Not only that, totally satisfied clients will refer business to you and serve as a reference if you ask…making it easier to attract new relationships as well.

Beyond the revenue impact, though, is the fact that working with loyal clients who recognize the value of the relationship with your firm, seek your counsel, are fun to serve and take your advice create for a very fulfilling practice. They create interesting professional opportunities and an enjoyable atmosphere. Who wouldn’t want to practice public accounting in an environment like that?

Satisfaction vs Loyalty

Satisfaction and loyalty are related, but not the same. Satisfaction is often tied to a project or engagement. Loyalty is tied to the relationship. Both are important – you can’t have loyalty without satisfaction first. But loyalty helps to insulate the relationship from brief periods of dissatisfaction. If I’m a loyal client, I’ll allow you the opportunity to fix a satisfaction issue. I may even become more loyal if the issue is resolved quickly and to my liking. However, if I’m merely satisfied, and then become dissatisfied I’m more likely to look for an alternative service provider because there is nothing else tethering me to the firm.

So ask yourself, “what are the proactive measures we are taking as a firm to measure and improve client loyalty?” If the answer is “not much” or “I’m not sure” you may want to consider starting at the beginning by understanding what your clients value in a relationship, and how you’re doing delivering in those key areas.

How do You Know What Clients Value? Ask!

Coordinated efforts to improve client service can yield some of the greatest returns on investment of any growth activity. To be most effective, any effort related to improving client service should germinate from feedback from your best clients. Often when firms measure satisfaction, they focus on engagement satisfaction. How satisfied were they with the outcome? How did they enjoy the experience of working with your team? What could you do differently? How would they rate the deliverables? While important, these surveys don’t adequately measure the satisfaction with the relationship—which is what drives loyalty.

Consider a formalized program to learn the following from your clients:

  • What attributes of service do they associate with your firm?
  • What attributes of service are most important to them in hiring a CPA?
  • How satisfied are they with your firm’s delivery of the attributes that are most important?

Understanding your clients’ perspective enables you to define the behaviors of client service that will enhance loyalty. You can then train everyone in the firm on the behaviors for consistent delivery. Clients will begin to see and feel the difference between your firm and others in the market.

To learn more about how The Whetstone Group can help you learn what attributes of service will lead to client loyalty for your firm, contact us today!

A Physical Therapist’s Guide to filling your CPA Firm’s Pipeline

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If I created a list of Frequently Asked Questions from among my clients at the top of the list would be this: “What’s the most effective way to fill my pipeline with opportunities?” Everyone wants to know the secret.

The secret is—there is no secret. There is no one best-practice, one-size-fits-all, guaranteed to work solution. Be leery of anyone who tells you otherwise.

It’s probably not the answer you were hoping for.

My husband is a physical therapist. In his practice patients often come to him looking for a quick fix to their aches, pains and injuries. Most of these issues have developed over time—through repetitive use or as a result of bad habits or poor judgment in overexerting during exercise in order to make up for a lack of activity in the prior months. Sometimes the pain is systemic – meaning it’s derived from an entire system that isn’t functioning the way it should.

Regardless of the issue 80% of the patients he treats are looking for the shortest path back to wellness. In most cases, their expectation of treatment isn’t realistic. Rather than a pill or a cure to their problem, the prescribed treatment often involves guidance from a physical therapy professional, diligent adherence to a set of exercises and likely some instruction to be patient and lay off some of the activities they may have put them in his care in the first place.

It may also involve a little discomfort.

I know that look of disappointment he receives when he delivers the news, “Stick with this program for the next 12 weeks and you’ll start to see results”. Oh the incredulity. I’ve GIVEN him that look when he’s talked me through the process of rehabbing my knee due to a running related injury.

It’s the same look I receive when I talk with CPA firm clients about the process involved with filling their pipeline. They expect to be able to turn the hose on full force and create a flood of opportunities after little to no activity up to that point. The fact is the pipeline isn’t filled overnight. And a lack of opportunities in the pipeline isn’t created overnight. It’s a long-term issue that has developed over time. It may be systemic. It probably requires some patience and diligence (and maybe some discomfort) to fix it.

Here are a few ideas to get you started:

  1. Evaluate what’s already working. Think through your firm’s last five good proposal opportunities. How did they originate? How can you replicate the situation from which they originated? Do more of what’s already working.
  2. Analyze your firm’s top 20% of existing clients. What do they have in common (size, industry, ownership structure, business stage)? Are there similar issues/challenges among them you have helped solve? Do you have other clients you can help with the same issue? Can you ask them for referrals to their peers to help solve the issue?
  3. Examine your firm’s communication strategy to the market. Have you defined your key target market opportunities? Is there a plan in place and communicated internally so everyone in the firm knows what kind of opportunities you’re looking for? Are you communicating with a message to the market frequently (monthly) and consistently (using the same branding messages)?
  4. If the answer to #3 is yes, the time may be right to proactively reach out to the market. Make phone calls (or hire someone to make them on your behalf) or engage in networking events to schedule some face-to-face meetings to do needs assessments. Do you know the right questions to ask to help figure out how you can help your prospects?
  5. Cultivate referral sources. Do you have relationships with referral sources you can cultivate? If not, you need a plan to develop those trusted relationships. When was the last time you met with key referral sources? Make sure you’ve articulated the types of opportunities you’re looking for. Do you have a list of your top 10 prospects? Share that list with your best referral sources to see if they can help with an introduction.
  6. Deal with systemic issues in your business development process. Do you need additional training to be better at business development? Does your staff know what’s expected of them in their contribution to the firm’s growth? Think about your firm’s approach to client service—do you have a consistent client service process that fosters client loyalty? Develop in internal communication strategy to make the business case for filling the pipeline and growing the top-line to everyone in the firm. Determine if any culling is needed to make room for better, more profitable clients.

It takes a combination of activities, implemented over time to improve your firm’s pipeline wellness. How much time? Stick with this program for the next 12 weeks and you’ll start to see results. Better yet, seek help from a professional to guide you.

Contact The Whetstone Group at 319.447.6400 or info@thewhetstonegroup.com to learn how our professionals can help.

The Hard Truth about Soft Skills

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“We’re in a relationship business.”

I’ve heard this more times than I can count during the 20+ years I’ve worked with CPAs firms. It’s the one constant in the CPA profession.

But, I wonder…have we devalued relationship building? We have access to limitless technology tools as a means of communicating and finding the information and answers we need. We rely on online tools to connect with clients, prospects and referral sources. We automate communication. Does that become a substitute for real, in-person interaction?

In addition, I think many professionals in public accounting convince themselves that high quality work will speak for itself and that relationships are ancillary. They discount the value of soft skills such as communication and relationship building.

They believe that their excellent technical skill and production will lead to all the opportunities they want—both within the firm as well as opportunities with clients. To some extent, when young professionals are early in their careers with their firms this is true. A 1-3 year professional on the staff of an accounting firm has a primary responsibility to contribute to the firm’s growth by providing excellent client service, being technically proficient, and meeting deadlines.

But the hard truth about the soft skills of relationship building is this: technical expertise will only take a person so far. Professionals who are interested in taking their careers to the next level will soon realize that in addition to strong technical skills the ability to develop real and trusted relationships unlocks greater opportunities.

In addition, most of us experience the greatest satisfaction with our chosen careers when we practice with a sense of purpose—meaning we understand and can articulate how what we’re doing professionally is making a positive difference for clients. How can we discern this without having built a relationship with the client and understanding those issues that are most important to them? Will they share their greatest struggles and challenges if they don’t trust us? Can they trust us if there isn’t a relationship?

Internally, existing leaders are looking for professionals who can influence, motivate, strategize and organize. Building relationships offers the perfect context in which to develop these critical skills.

So, if this is the hard truth, how do we develop these soft skills? Here are a few practical ideas to get started:

  1. If you tend toward being an introvert, it may not be natural for you to extend regular invitations to meet for lunch or coffee. You may need to create some kind of system to help you. Create a planned set of activities for getting to know people and put those activities in your calendar. Stick to the plan.
  2. Be strategic about the relationships you build. Think through the purpose of connecting with someone. How can they help you? And equally, if not more important, how can you help them?
  3. Don’t shy away from a conversation because someone is rude. Sometimes other people are just as nervous as you are. Forge ahead. Every time you try will make the next time easier. If the person you’re trying to engage doesn’t respond after a few attempts you can either ask them outright why you’re having a hard time connecting or move on to the next person.
  4. Recognize that it’s your responsibility to reach out and build these relationships. Don’t expect others to come to you. When you take the opportunity to reach out, you’ll find that 99.9% of the people you contact are accommodating. Once you reach a more senior-level position remember to be receptive to those younger professionals who are reaching out to you. Be a good steward of your position.
  5. Take time and make the effort to build relationships with people over personal as well as business topics. You may be able to get by keeping people at arm’s length for a little while, but true relationships eventually must go deeper in order to create trust.

Building relationships is critical. Practice the skills necessary to develop and maintain mutually beneficial relationships—both internally and externally. Accepting this hard truth and shoring up these soft skills will unlock unlimited possibilities.

Shore up Your Relationship Skills and Step up Your Results

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I was reading an accounting industry publication on the airplane a couple weeks ago. The statistic was that 75% of all accountants now practicing will be retiring within the next 12 years. While there may be some debate as to whether this statistic is being overstated even if the true number is 50% there is serious challenge. For many firms this group of retiring CPAs contains many of the profession’s current rainmakers.
Without a plan to bring along the next generation of business developers it might not be a comfortable ride into the sunset for current partners over age 50. One key area that has changed for CPA professionals in the past 20 years is relationship development.
If you started in the profession during the 70’s and are good at business development you are used to building relationships face-to-face with both prospects and referrals sources. Without electronic communications, cell phones and other mobile technology—most business was conducted via phone and in-person meetings. Those who started in the profession after 1999 are used to responding to email with an email; a tweet with a tweet and a text message with a text message. It may work for some as a way to successfully develop opportunities, but public accounting is still a relationship business. Loyalty is created by building strong relationships.
So how can professionals shore up their relationship building skills? Here are five ideas to start:
1 Go ahead and email clients but plan a face-to-face encounter with “A” clients at least monthly. This will go a long way toward building trust, making them feel important, and giving you opportunities to assess their needs and figure out ways you can help.
2 Similarly, to build a strong referral relationship make sure your communications includes a face-to-face meeting at least quarterly with each referral source. Like your clients, a strong relationship with referral sources is based on trust—which is built between individuals over time. Also make sure you can articulate the benefits to the referral source of referring clients to you. Obviously the benefits of what you do for their clients is important, but what’s in it for that referral source to work with you?
3 Pick up the phone and have a conversation vs. replying by email every third time you communicate with a client or prospect. You’ll be amazed at what you can learn during the course of at 15 minute give-and-take conversation vs a 2 minute reply to email.
4 Have a “we care” meeting with “A” clients (and maybe high-level “Bs”) at least once per year. No agenda or objective other than to take the opportunity to thank them for their business and ask how are we doing meeting your client service expectations. Take notes and address any issues you uncover.
5 Put a hand written note on paper newsletters or an invitation to a firm event or a firm announcement for 3-5 clients each time one of them gets distributed to clients. Even if the client can’t make the event he/she will likely remember that you took the time to invite them personally and may also remember the topic of the article/event/announcement at a key moment when they need help in that area.

Business development doesn’t have to be hard.

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Let’s face it – you most likely didn’t work hard to develop your professional service skills and expertise because you wanted to be a sales person.  That said, you probably also realize the importance of developing new business so that you can continue to practice your professional skills — it’s a conundrum.

What if I told you the most effective business development tactic you can employ is also the easiest AND least expensive? I’m guessing you’d want to hear more — so here goes. I’m talking about mining your existing client data to identify business development opportunities.

The Tried (and True!) 80/20 Rule

Start by listing your clients in order of the fees they pay you annually — highest to lowest. Then look at the top 20% on the list and calculate what percentage of your total revenue they represent. I’m pretty sure you’ll find that top 20% of your clients represent close to 80% of your revenue. It never seems to fail!

So take a look at those top clients – what makes them your “A” clients — what industry are they in, what size companies are they, is there anything different about the way you serve them? Have you asked these “A” clients for a referral and/or testimonial? They obviously trust you and depend on you for a significant level of service — they will be your best introduction to meet prospective clients.

Based on the profile of your best clients, what types of business development activities should you be doing to bring more of those into the firm? What professional organizations, publications, web sites, etc will put you in front of companies who match the profile of your “A” clients?

Now take a look at the next tier of clients — many times they represent significant growth opportunity. What can you do to move them up to the “A” list? The first step is easy – call them to schedule a lunch or meeting and catch up on their business.

Now take a look at that bottom 80% or so that are only accounting for 20% of your revenues. How many of them are there? What is the average annual fee/client? How profitable is it for you to continue to serve all of these clients? Is it worth referring some of these clients to smaller firms to free up your time to develop and serve more profitable clients?

Develop an Opportunity Matrix

Once you’ve identified your “A” clients and the next tier below the “A”s we’ll call them the “B”s — develop a simple matrix to identify where you have cross-sell opportunities. List these clients down the side of the matrix and list all of your firm’s services across the top. Fill in the cells with one of four statuses:

  • Providing/provided — you are already doing this service for the client (or have already done it if it’s a one-time project)
  • Proposing — you are already in discussions with the client about providing them with the service
  • Not applicable — you can’t provide the service for the client because you are conflicted out our because there is no need for the service based on the nature of their business
  • Opportunity — everything else!

Don’t make decisions for your clients, assuming they don’t want a particular service. Anything that isn’t in the first three categories — the Not applicable should only be used for truly non applicable services — should be considered an opportunity.

The opportunity matrix will help you prioritize which clients to meet with (those with the most opportunities) and what to prepare to discuss with them (the services you haven’t yet provided them).

Remember, cross-selling to clients is the quickest, easiest, least expensive way to develop new business. Use your client data to identify the right clients and right services to target for growth.  And even though you can’t rely solely on client cross-selling for growth, the data you have about your existing clients can help you identify the right prospects to target and help you meet them through referrals and testimonials.

See? It doesn’t have to be hard — you have what you need right at your fingertips. Good luck!