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.

Does Flexibility Undermine the Work/Life Balance?

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When I was in my late 20s and early 30s I was fortunate enough to work in a company that offered flexibility. What that meant at the time was flexible office hours and a laptop to take home with me if I needed to be there for the repairman to work on our dishwasher. There was still an unwritten expectation that you worked in the office (mostly) unless there was an extenuating circumstance.

Fast forward 15 years, and flexibility now means mobile technology enabling us to adopt an anytime, anywhere approach to work. I’m a big fan of these tools and practices in our workplaces. There is an increase in demand among young professionals to be able to work anywhere they can be productive. As long as the work is getting done, does it matter where the person doing it sits or during what time of day she completes it? Certainly not.

However, I wonder sometimes if this flexibility has started to undermine the idea of work/life balance. On the surface, the two seem complementary in that not having to be in the office from 9-5 creates opportunities to spend time with kids while they are awake, for example. Or to blow off some steam at the gym during those hours when it is a better fit for my day. Or have a phone conversation with a colleague while I’m on a walk. Or even to sit in a coffeehouse collaborating with clients in other locations. I’ll admit to having done all these things. Flexibility is good. And as long as the work is getting done there shouldn’t be an issue, right?

But what happens when this ability to work anytime and anywhere begins to seep into areas of our lives previously unencumbered with professional obligation? Burnout. Burnout happens.

How easy is it to quickly check email on a mobile device on a Saturday morning and get sucked into an hour’s worth of correspondence? How tempting is it to check on a project using your mobile device while sitting at your son’s basketball game and then look up only to discover that you’ve missed half the action? How about sitting in the living room with your son and being so distracted by your laptop that you miss out on the important details of his day?

What started as a great perk and a leading edge way of doing business becomes one more challenge for businesses to overcome. Where does the responsibility fall? It is shared between the individual and the firm.

Boundaries are important in maintaining a balance. We all need certain times of day or activities in our personal lives to be off-limits to work distractions. So, use clear communication to set expectations with co-workers and clients about when you will (and will not) be available or respond. Practice self-discipline for those times when you are committed to personal pursuits. Stay organized and plan ahead to continue to meet deadlines and keep work flowing in a timely way. Apply productivity tools like project management software, calendars, and time management systems to stay on track. Avoid time sucks which are low value, high effort activities – and learn to delegate what you can.

Firms need to accept the boundaries. They also need to have a realistic idea of the expected productivity for employees based on a reasonable number of working hours per week. An open dialog among leaders, managers and professionals is paramount.

Anytime, anywhere work is the future of the profession. Let’s reclaim flexibility as a value driver as opposed to a burnout stimulator with better planning and communication on both sides.

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

Your Future Firm Starts Now: Success Strategies for Launching New Services – Part 1

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In the next few weeks we are taking a closer look at a five step 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. In this post we introduce steps 1 and 2:  – Research Market Needs and Evaluate and Prioritize. Check back Oct. 3rd for steps 3 and 4 – Define the Scope and Go to Market with Your Service.

Step 1: Research Market Needs

There are a variety of sources you can tap to learn more about the current and future needs of your target market.  You have a great source of information to help you get started:  your clients.  Arrange time to meet face-to-face with several of your clients and ask them a series of questions designed to uncover unmet needs, what kind of assistance they need, and even what they would potentially pay to get this help.

Client Questions to Discover Needs

  1. What are the biggest challenges facing your company over the next 2-3 years?
  2. How do you see these challenges impacting your company?
  3. What obstacles do you believe are or will hinder your ability to address these challenges?
  4. What outside assistance do you believe would help you address these challenges?
  5. What would you be willing to pay for this assistance?

In addition to speaking with your clients, you should do some secondary research to back up and add to what you learn.  There are a variety of sources to use:

  • Competitors: look at what services the Big 4 CPA firms and other large competitors are developing by looking at their web sites and reading about them in accounting industry publications.  With their clients and their positions on boards and industry groups, they typically are the first to know what trends, issues and challenges companies are facing.
  • Social Media: Review Linked in pages and groups and read industry and business blogs to get a feel for conversation topics, what questions are being asked, and ideas people are discussing.
  • Web sites: There are a variety of Web site resources that will contain information helpful to your research, for example First Research (firstresearch.com), IBISWorld.com and AICPA/PCPS (http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/Pages/PCPS.aspx) .  Take some time to browse these sites, again looking for what is being discussed.
  • Industry Resources: If you have industry practices, and/or participate in industry organizations, these are great sources for information.  Many publish newsletters, hold conferences, and have discussion groups on their web sites that will provide clues as to current trends and issues that drive demand for new services.

Step 2: Evaluate and prioritize

If more than one new service idea bubbles up from your research, you need a systematic process to narrow the list and decide which to pursue.  Consider the following factors (explanation of each consideration is discussed below):

evaluate_prioritize_graphic-copy

 

Demand

The quickest, easiest, least expensive way to grow a new business is to drive sales through your existing client base.  It doesn’t cost anything to get in front of your clients – just a phone call – and because of your ongoing working relationships, your clients trust you and will listen when you discuss a new service idea with them.  If a new service idea you are considering is targeted to a market different than those you currently serve, this means you will need to earn the right – through branding, marketing and sales efforts – to pitch the service idea to people who don’t necessarily know you or trust you.

Revenue

One you’ve determined the demand is there, evaluate the revenue stream.  Will it be a special project that clients only need once, is it something that will need to be updated occasionally, or is it annual work that will serve as annuity revenue for your firm?  When comparing investment costs to potential payback, you’ll want to estimate the lifetime value of the service with each client, taking into account the entire revenue stream and average expected useful lifespan of your clients.

Service Capability

A huge factor in comparing new service ideas is your ability to provide the service.  The alternatives range from you having existing personnel who are trained and ready to go (least expensive/easiest) to having to acquire the expertise from an outside source such as a merger or an alliance with a strategic partner (most difficult/potentially expensive).  If you want to staff the service internally and need to hire, consider how easy or difficult it will be to find the right person in your market.

Business Development

There are three basic elements to consider regarding your ability to sell the new service:  How effective the marketing message will be, how the market will accept the message, and what kind of sales force you have available.  For a marketing message to be effective, it needs to differentiate you from competitors offering similar solutions and include clearly defined and easy-to-understand benefits so the target audience can perceive the value proposition of the service.

This will be tougher to achieve if the service is not something typically associated with your industry brand.  For example, a business owner typically will not expect to get human resources consulting from a CPA firm; the CPA brand is more often associated with financial-oriented solutions like accounting and tax.  So, a CPA firm pitching an HR-oriented solution will have a harder time differentiating its service from that of a human resources specialty consulting firm and the target audience will likely have a harder time understanding the value proposition of going to a CPA firm for this type of work.

Finally, you’ll need to have professionals who can help sell the service once you develop it.  If you rely only on the service provider/service champion for sales, you’ll find growth slows/stops once that person makes a few sales and is busy serving clients.  All those who serve clients in your firm and/or speak with prospective clients about your firm’s services should be willing and able to present the new service.  Ask yourself how feasible this is given your firm’s culture, the sales skills of your people, and the time you have available to train and manage the sales force.


 

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.

A Friendly Reminder about Marketing Budgets

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If you’re one of those firms that has been getting by without a marketing budget you may ask yourself why you need one. Let’s say that last year you sponsored golf holes at a number of different outings. You have people out networking in the community and serving on boards. You took your clients to lunch regularly. Your firm offered a couple of seminars and sent out a few letters. And maybe you even are investing in an email newsletter. So if you have all this activity going on, why do you need a marketing budget?

Here are five reasons:

1. Control spending. The fundamental purpose of a marketing budget is to give firms control over their marketing spending. A budget enables firms to put aside a set amount of money that they would like to invest in growth and manage the way that money is spent each year. It precludes the open checkbook policy that causes firms to end up spending too much (or in many cases, too little) on marketing and sales activities.

2. Avoid random and ad-hoc marketing activities. Creating an effective budget requires some marketing planning to take advantage of the best opportunities for growth. This ensures marketing dollars are being spent in a manner that supports your firm’s growth strategy. Without a budget and this forethought, firms often struggle to reign in their spending. These same firms almost always find themselves engaging in one-off marketing activities that may or may not support a firm’s vision for growth.

3. Leverage investments. A by-product of developing a marketing budget is the ability to leverage marketing investments by creating activities that support each other. For example, investing in an advertisement in an industry journal can also support an investment in telephone lead generation that is also focused on that industry segment.

4. Measure results. Without a marketing budget it is impossible to measure the return your firm is generating from its marketing investments. Measuring results is critical in determining which activities you should continue to implement, and on which activities your firm should not waste your people’s time or firm’s money.

5. Ensure the proper balance between marketing and sales. Firms need to implement the right mix of marketing and sales activities to be successful in meeting their growth goals. By evaluating your firm’s marketing budget you can get a feel for how your firm’s business development efforts are divided among marketing, transition and sales activities to make sure the mix is appropriate based on your firm’s goals.

Yes, five reasons you need a marketing budget. What are you waiting for? Don’t know where to start? Call us today at 319.447.6400. To learn more about developing the right marketing budget for your firm, download our free whitepaper:  Developing the Right Marketing Budget for Your Practice