As cloud technology, commoditisation of compliance and social change takes hold there will be an issue of client retention on the horizon. Most Accounting firms have very high client retention. I would argue that this is because of ‘financial intimacy’. You know things about your clients that very few do. Focusing on client retention is not just about retaining existing clients – it’s about getting new ones as well. Thrilled clients tend to refer more than those that are there ‘because the Accountant knows a few things about my past’ clients.
There are just 3 things to focus on when it comes to awesome client retention.
- Making a difference. Is your service(s) / product making a difference to the clients condition? So peace of mind, wealth, profit, cashflow, fuzzy feelings etc.
- Adding value. Are you and your team really adding value to the process? So explaining things, amazing service, doing something unique and inspiring etc.
- Usage of products / services. Is you client more than just 1 or 2 services from you? Making sure that EVERY client is buying every service they need that helps them achieve their goals.
Getting to the ‘right’ price is one of the major conundrums facing all Accountants and anyone who sells intellectual property and information products and services.
Certainly ‘time based billing’ does not even come close to valuing what you know and valuing the impact your IP has on your client. After years being involved in creating and selling information products and services (around $170M in sales so far) I think there are just 3 things to consider.
- Your value belief – how you value yourself and what you know
- Your value contribution – the difference you make to your client when they implement what you know
- Your clients value perception – the way you articulate your value to your client
If you have high value belief and high value contribution yet you do not explain to your client the impact you are making (area 1 in diagram) then you will not get to the right price. If you have high value contribution and you explain it well yet your self belief is low (area 2 in diagram) then you will not get to the right price. If you have explained your value to your client and you have high value belief yet what you do doesn’t really make a difference (area 3 in diagram) then you will not get to the right price.
The objective is to grow your self belief, make a difference to your client, explain eloquently the difference you are making and you’ll get somewhere close to the right price – area 4 in the diagram.
And the biggest thing in pricing IP based services/products to remember….the only right price is just before NO!
If your total number of days in lock-up, being your combined work-in-progress and receivables balances, is more than 40 days in total, your workflow process is not as effective as it should be. More than 1000 Accounting firms that we have worked with, have less than 40 days in lock-up, our top accounting firms have less than 10! How do they achieve this?
By implementing the ProClient Workflow System via the 90 Day Accountants Challenge.
What will the challenge enable me to do?
There are 3 key steps to helping any size Accounting firm to grow revenue and profits.
- Get better with what you’ve got — workflow, WIP, receivables etc
- Get capacity — people structure, equipment & policies.
- Get active with marketing & sales techniques — using value pricing with new services.
This challenge focuses on the first and second one. The objective is get maximum efficiencies in your firm over a 90 day period. By participating in the challenge you will Dramatically reduce WIP, turnaround time and reduce your accounts receivable balances.
What is the Outcome of the challenge?
If you implement what you have learned from the challenge you will drive time down on client jobs by becoming more efficient and still maintaining quality control and have happy clients.
You will receive also practical tips and insights on how to:
- Increase Revenue
- Offer Value Added Services
- Create Efficiency
- Streamline Workflow
- Reduce turnaround time to circa 10 days
- Reduce WIP balances to circa 10 days or less
- Reduce Receivables balances to circa 30 days or less
This is guided coaching program over 90 days. It starts on November 1 and ends on Jan 31. Every “challenger” starts together and ends together. Along the way you’ll have access to our online tools, online learning centre, success library and our coaching team. We’ll measure your results before, during and after – keeping you accountable along the way. We have 441 signed up already. More information and sign up process can be accessed from this website.
People carry so much unnecessary baggage. Accountants are no different. Often it’s a limiting self belief. Many times it is the wrong strategy. In the mens urinal at my business (Proactive Accountants Network) we have a bunch of strategies, attitudes and beliefs that needs to be flushed down the toilet – after they are urinated on!
We have around 2,500 Accountants attend our training facility in the office annually so there should be plenty of flushing going on.
What do you need to flush today?
The average profit of a partner in an Accounting firm in Australia is $293,080. Profits per partner declined by 8% last year. It’s OK but not great. A partner can carve out a reasonable lifestyle on $300k. Some are making more, some less.
I think for how smart partners of accounting firms are and how much risk they take I think they are underpaid. They should be making more than $1M per year. With the right decisions, a finely tuned business vehicle and correct implementation it is entirely doable. We’re helping firms every day to get to >$1M per partner. Below is simple model of what a million dollar profit per parnter firm might look like:
But you have to want it. There must be a desire to change and create wealth.
The reality is that it is far too comfortable in the Accounting profession. The government dictates a range of statutory services you must offer, clients are very loyal because of ‘financial intimacy’ and there is a never ending demand from clients for additional services. Good gig. And that’s the issue – it’s too easy to make money as an Accountant.
To create a different result you must first have a burning desire. You will only change because you want to fix something or achieve something. You have to be hungry.
You also need the right strategy. The strategy must be documented, well thought out and realistic.
This Thursday (July 25) at 12 noon I am running a free webinar on developing a winning strategy for accountants. If you are interested in getting a different result then I invite you to invest an hour of your time learning how to develop a winning strategy.