- Branding / Leads. The function of marketing is to generate high quality leads – either from new or existing clients. Branding is very important as well. However when you get involved with marketing and hire marketing people make sure the money you are spending gets a return. Your brand probably needs a makeover and you also need to do activities that actually generate enquiry. Your marketing activity should make you money not cost you money.
- Services productised. Every day you generate IP in your firm. What happens to it? it more than likely gets locked in a client file somewhere never to be seen again and then started again from scratch the next time that type of work needs to be done. I am being facetious! I know you have templates and processes for compliance and tax work. What about everything else? The more you productise your services the more efficient you can be, the better service you will deliver and the more money you will make.
- Sales process / skills. Accountants are lousy at marketing but good at sales. Once we teach you. Think of sales as servicing. Making sure each client has what they need from you to achieve their goals and objectives. You do need skills in interviewing, language & questioning techniques. You also need a predictable sales process. Think of sales like workflow management – step by step process.
- Value Pricing. To price a job upfront is not value pricing. Value pricing is setting a price based on your contribution to the clients outcome. If you can save the client $250K in tax paid (and you know that in advance) then what’s wrong with charging $25k to do that? A 10:1 return is a great return in anyone’s language. Charging by the day or the hour will keep you in the poor house.
- Retention rate. There is no point in getting loads of new clients if you cannot look after the ones you already have. You must work out ways to retain your clients for the long haul. If you have a client that pays you $10k per year and refers 1 client per year that is worth a similar amount then that direct client is worth $200K over a 10 year period – plus inflation! You need to look at the lifetime value of each client – not just this months transaction.
- Average project value. Each time your client buys a project from you is an opportunity to add value, up-sell, and make sure the client is paying an appropriate price based on the value you provide. Pricing remains a hidden gold mine in an Accounting firm. 99.9% of firms undercharge for what they do. The right price is just before “NO, I do not want to pay that amount of money for that”. What your client is really saying is they do not see value in what you are proposing. It’s not until you get a lot of push back do you know if you have hit the threshold. Do not assume what the right price is – test it and listen.
- No. of projects / client. Accountants can offer huge amounts of value to their clients. If you have done your job right then your clients will be buying a large range of services from you each year. Most clients buy around 2 projects per year from their Accountant. Based on what clients need and what Accountants can provide that number should be an average of 4 or more.