Following on from part 1 here are the first 2 A’s in detail: Aspirations If you do not aspire to anything more than you currently are then you are going be remain exactly where you currently are. Apathy (another A word and not a good one) is the killer of business performance and success.…
Every Accountant has a different idea of what business achievement is. Some think they are achieving if they can get the compliance work done in a timely manner. Some think they are achieving if the team are engaged and work in a cohesive and efficient way. Some think they are achieving if their marketing is…
This morning I had the pleasure of addressing 65 Accountants in Auckland. The team at Xero had invited their awesome ‘silver’ partners to a special forum with me. Very humbling. The content I covered was a snippet of content that we deliver through our coachingclub program. Here are the highlights of what I presented: You only…
I have left my MYOB vs Xero blog post alone for 2 weeks. I wanted to see how many people viewed, shared, tweeted etc. So far around 500 shares, forwards and a thousands upon thousand of ‘views’. Cloud accounting is clearly a hot topic right now. I have got some other interviews coming…
Most firms have high retention rate per client. That means their clients stay clients of the firm for a long period of time. Somehow the Accounting profession has got most of their clients bluffed that it is hard to change Accountants. It’s actually not.
Partners will argue that clients remain with the firm because of the great relationship they have with their clients. I beg to differ. How can you have a great relationship with someone when you see them once or twice per year?
Imagine what your relationship would be like at home if you only saw your life partner once or twice per year? For some of you reading this it would be better!
I do not think retention rate is high because of great service, relationships, value for money or services offered.
I think retention rate is high because the Accountant knows about the clients financial affairs.
The reason Accountants have high retention rate is because of financial intimacy.
Most people do not speak openly about their financial affairs – it’s a very private matter. And if they only speak to a couple of people about a very private matter a lot of trust is built up. Not relationship – trust.
Your clients trust you to not tell others. So they don’t leave.
However, the real measure is how happy they are to be a client of your firm. I think that metric is based on the number of referrals you receive each year per client. If you divided the number of referrals (enquiries) you get annually into your total client base this will give you a startling reality of how happy your clients actually are.
Now the flip side to that is they want you all for themselves and they do not want to refer! Possibly.
Focussing on building relationships (retention rate strategies) is not about increasing the retention rate number (it’s already high), it’s about making memorable experiences with existing clients so they buy more from you and refer more to you.
You should be aiming for a retention rate of 95% and at least 1 referral per client per year.
I have written an extensive report on Accounting firm performance. You can download the full report here.
Enjoy video # 10.
In today’s Australian Financial Review, Accounting journalist Agnes King puts forth an argument that (first line) “Accounting firms have no business being on social media”.
She continues “Honestly, what do social media campaigns actually offer the clients of accounting firms? They might be a cheap way to distribute monthly newsletters but that’s hardly revolutionary.”
C’mon Agnes – get with the times!
That is like saying that in the 80’s Accountants should not have a fax machine, in the 90’s they should have not had a computer on every desk and in the naughties every person in an Accounting firm need not have a website or individual email address!
We’re in the social & community re-building age – every firm needs a social media strategy and every firm needs to embrace it.
The esteemed (and very one sided in this matter) journalist continues:
“Most accounting firms profess an increased investment in social media. When pressed, however, they’re just as likely to admit they don’t understand it. But they also know they can’t ignore it. Admitting this seems to be a horrifying sign of weakness. The sooner they get over this notion, the better for all concerned as they can start focusing on the value again. Don’t ignore social media but consider it a research and development exercise until it proves itself to be something more”.
Research and Development – is that it? It will be something more if firms want to make it something more.
I thought journalists were not supposed to have an opinion. Weren’t they supposed to give a balanced view of the subject at hand?
Her argument is fundamentally flawed because she does not understand how these new communication tools can enhance the relationship between Accountant and business client.
If the Accountants of this world are supposed to be the ‘trusted adviser’ and their clients look up to them for leading business advice then surely this medium is a way to distribute information and enhance the experience of dealing with the firm.
Surely a sign of ‘being modern’ and ‘keeping up with the times’ is that leading firms MUST have a social media presence & active and ever evolving presence.
The social presence must add value to clients otherwise it will be like the first ‘static’ websites of old where it was an online brochure with 10 year old pictures of the partners!
The beauty of a social presence is it is alive, interactive and very easy to use.
Here’s an example (and a cracking idea if I do say so myself):
Just imagine if a Proactive firm (one of my members perhaps!) started a ‘closed’ or ‘private’ group on LinkedIn or Facebook. They invited all of their clients to participate. Their employees participated as well and the Accounting firm lead discussions about topics. They started a ‘forum’ just for their firm where they brought their clients together. They stimulated clients thinking by offering case studies, testimonials, wins, content, discussion and tools. They updated everything through the closed group. The firm’s clients could do business with each other and interact with the people in the firm more. They could even offer ‘concierge’ service – connecting people to other people.
All this can be done for free right now.
It’s about building a community. Standard communities are deteriorating around the world due to media hyping up the next killing/abduction/robbery or car crash. The media has driven fear into the local community of old with their sensationalism, insinuation (it’s not safe to go outside kids) and negative driven news service. Just watch the news at 6pm tonight, or read tomorrows paper and count the negative to positive ratio of stories!
Social media used properly can re-build communities. They’re just different communities – a place where people feel like they belong.
On a final note. No one deals with a business, we all deal with people. It’s not business to business – it’s people to people. I do not deal with the Accounting firm because of their offices, pretty logo or brochure. I deal with the people in the Accounting firm – just as they deal with the people in my business.
Social media platforms are about bringing people together. To share, debate, exchange, inspire & communicate. Period.
Below is the June 2012 and financial year to date results of a very high performing Accounting firm. Through our network of 300+ firms we monitor their performance every single month through our cloud based monitoring system. I have circled the keys to this firms success. It is a 3 partner firm in the suburbs serving small businesses.
As you can see their ‘lock up’ needs some attention but other than than they are doing exceptionally well. Our strategies work for small firms and large firms. This firm is a shining example of implementing our strategies. Make an enquiry if you are looking to revolutionise your financial performance!
I have been asked by an editor of a publication to answer 2 questions on the accounting profession. In case my words are twisted, deleted or otherwise changed – here are the 2 questions and my direct answer.
What kind of a year was it for the CPA profession in 2011?
The accounting profession hardly moved in performance due to the fact that (in general) it did not start being proactive with marketing and servicing their existing clients with value added services. If the only strategy is to reduce costs then, yes, profits will increase, however new clients and much needed services to existing clients will not eventuate. The profession could be wiped out by internet based accounting systems. It needs to step up and take it’s rightful place as the trusted advisor
What kind of a year are we expecting in 2012, given that the year is half over already?
The proactive firms are doing well. They always will. The reactive firms will always turn in a mediocre result. This year will be a ‘same same’ year as last year. The profession makes too much money too easily and as such apathy creeps in. I think most partners of firms are lazy – especially when it comes to servicing clients properly by offering value added services. A tsunami of change is on the way with internet based accounting systems. Firms need to get ready for a reduction in annual tax work over the next few years. I am a big believer that this needs to happen. To remain relevant innovation and new services must be introduced – otherwise many firms will go the way of the dinosaur.
This morning I delivered a short speech (25 minutes) to 150+ Accountants. At the start of the speech I asked the question “On a scale of 1 to 10 how relevant is the Accounting profession today”. The resounding response was 7 out of 10.
When I finished my speech 25 minutes later I asked the same question in a different way. My question the 2nd time was “If the profession does not change in the next 7 years how relevant will it be”?
I started at 10 and my first taker was at 6 as I went down one each time. The overwhelming response was about a 1 in terms of relevance. I was blown away – a 1 out of 10 in terms of relevance if no change occurs in the way the profession operates.
So obviously in 25 minutes I caused a stir. What was I talking about? I made 3 key points:
1. The commoditisation of compliance. With the ‘cloud accounting’ revolution well upon the profession this will drive efficiencies, margin squeeze and the rise of “the internet accountant”. The photo below depicts what it may look like. Not a good look!
2. The way accountants explain compliance (the history) to their clients. Just sending out the year end accounts with the inane ‘sign here’ stickers and not explaining what it all means is just not good enough. Clients do not understand and therefore the value of the history paper is useless. It’s also out of date – by at least 12 months! But the history paper does have value – if it is properly explained. Using technology and a process (we call the process PANalytics) to demonstrate the history makes more sense. Our new internet product (Proactive Success System) explains in laymen’s terms where the money went and what it all means. An example screen shot is below.
3. Adding value. To remain relevant an Accountant must add value to the history document and then help their clients make history. The making of history bit involves real time numbers (available in the pocket or brief case at all times) and the offering constructive suggestions on improving the numbers. Our new “Client Alerts” product tells the Accountant real time what is happening in their client business every day. Being proactive takes on a whole new level with this product & process. When something that you pick up in your client business is not going so well then make the call and explain what you have picked up and what the client needs to do about it. What great client service and what a great tool to sell additional services. See below.
I think the sweat shop above will exist in the future. But that is not the answer. To remain relevant the profession must add more value – plain and simple. It’s time for change. My audience this morning knows it. They are up for it. Are you?
- You are the trusted advisor
- You are the natural business leader
- You can add serious value
- You should be the hub of business success
- You can make a massive difference to your community
- You need to be proactive rather than reactive
- You have a business to run – not a practice
- You need to stop focussing on writing up history and start making history
Go on! I know you can do it and live it.