Golden Practices Blog

Selling Profitable Work When the Fee-Squeeze is On

The chatter everywhere in the accounting world surrounds what a hostile selling environment we're in. It was bad 2-3 years ago and it isn't any better today. Hand-wringing CPAs are convinced there's nothing they can do.

But there is.

You really can break free of the low-price wars. But there are a few things you'll need to do. And they take practice. To get started, check out this article (shared with AAM's permission).

PDF: Selling Profitable Work When the Fee-Squeeze is On

It's the Oct feature article for Association for Accounting Marketing's Growth Strategies magazine, and it is a nod to the type of content in my next book: Pricing to Win. Landing the Right Work at the Right Price. 

Would really love your feedback and your questions. They'll help me know what to address within the pages of the book! Thanks!!

 

 

The Original Accounting and Law Marketing Professional, Bruce Marcus, Releases 16th Book

A few months ago, I had one of those career shock-and-honor moments. 

Bruce Marcus (of The Marcus Report and Marcus Letter fame) called to ask me if I would write the introduction for his sixteenth book Professional Services Marketing 3.0.

I've long been a reader of Bruce's musings and admirer of his no-holds-barred views about firms and their operations. I particularly appreciate that he never tried to separate marketing from ops; he agrees they are integral. 

Allow me to tell you a little about Bruce. He joined Peat Marwick Mitchell in 1951 (after serving the our country during a fairly major event) and his career includes law as well as public accounting.

With his keen eyes open—his majors were econ and philosophy—he experienced, first hand, the dramatic evolution of professional service firms from "we don't market" to post-Bates decision assertions of "we'll advertise over my dead body" to fairly sophisticated modern marketing including the social web (which Bruce, an octogenarian, uses daily).

He was, quite literally, the very first communications director at a then Big-Eight CPA firm. He's done much in his prestigious career: http://www.marcusletter.com/Background.htm

Because Bruce has an incredibly open mind and reflects in order to advance, there really is no one better to help us envision where the professions need to be. He's watched from the birth of professional firm marketing, through its toddlerhood, and into its rocky teens. Professional firm marketing is now entering adulthood and we need perspective. This book provides it.

Here are a few excerpts from the introduction that can be read in full here.

Bruce Marcus’ newest book documents an important evolution in professional firms and the way law and accounting firms interact with current and prospective buyers. These interactions include serving the client, but also—quite importantly—reflecting how people working in firms present themselves in terms of their ability to bring true value to those who hire them.

The future of marketing is enhanced by understanding the past and present. It’s extremely rare to meet and learn from someone with the vast experiences of Mr. Marcus. It’s rarer yet to come upon a person who also maintains an extraordinarily open mind to new perspectives on the art and science of which he is already a master many times over.

To study the lessons within this book is an investment well worth making; may your mind be as open as the author’s as you explore the pages that follow.

Professional Services Marketing 3.0 is the story no one but Bruce could be in a position to tell. Enjoy...

Should You Let People Pick Your Brain for Free?

Yesterday I read an article on Forbes by Adrienne Graham called "No You Can't Pick My Brain For Free." And it prickled me a little.

The author has some legit points.

Some people definitely do try to take advantage of those who have knowledge and are willing to share it freely. And others are just oblivious to the fact that they are asking advice for which the potential advisor is usually paid.

But I have to say this.... the most successful business developers I've observed are those who are willing to "give a little away" and not selfishly withhold every bit of value within their brains.

Generosity and the willingness to have conversations that go beyond selling "why" they should pay for your knowledge (as Ms Graham advises) have worked very well for me, too. 

Her advice is far too black and white. She writes:

If you’re having problem drawing the line in the sand, here are some rules of thumb you should follow:

...Whenever someone wants to pick your brain, make sure you have your fee schedule in front of you. Give them a quote for how much it will cost them. They’ll either pay it or move on. If they move on, good riddance. They weren’t interested in paying you anyway. Let them figure it out on their own.

...Decline lunch/coffee invitations unless they are strictly non-business. If the conversation swings around to business, quickly and politely tell them you’re off the clock. If they are interested in a consult they can book an appointment and let them know what the charge is for that.

...Keep it light. Some of you will probably cave and throw a few nuggets out there. If you do (I hope you don’t), keep it general. Give the why and what but never the how. Anything beyond the why and what comes with a charge. And don’t even point them in the direction to obtain the how. That’s short changing yourself.

If I had held this attitude, there are many wonderful, very profitable engagements I wouldn't have landed.

IMHO, the problems she writes about weren't in the sharing. They were in being able to sniff out the "takers" early enough, and quite possibly in developing good listening skills.

Set boundaries relationship by relationship. But not in aggregate.

No way would I advise a lawyer, accountant or consultant to "decline lunch/coffee invitations unless they are strictly non-business." Guess you should decline golf and ballgames, too? How many relationships have been built on these age-old knowledge-sharing activities?

The interactions that Ms. Graham tells you to avoid allow for you to LISTEN as much as talk. Listening sells. Talking less so.

So, if you are a crummy listener and don't want the opportunity to learn more about a person's situation and needs so that you can eventually discuss ways you might be able to help them, then, yeah, pass on the opportunity to have a turkey sandwich or cuppa. 

Just don't be cynical thinking that everyone's out for your freebies.

If you're new to business development, it's a fact that you've gotta do a bunch of these things to learn how to sniff out the takers...the people who will never buy from you.

You'll get good at it. Trust me. 

Tired of Competing on Price? Be Different.

Firms have a problem and it's a marketing problem. Marketing 101 taught us that Price was one of the 4 "Ps" of Marketing. Funny that most firms don't "let" marketing stick their noses in the pricing strategy and process.

Firms seem to think marketing and pricing aren't related. But they are. 

Yesterday, Seth Godin picked on accountants in his post "We're the Same. We're the Same. We're the Same." He refers to their websites and says:

Sometimes, we try so hard to fit in we give consumers no choice but to seek out the cheapest. After all, if everything is the same, why not buy what's cheap and close?

Did you "hear" that? Seth explains that we CAUSE buyers to compare us on price, alone. And he is exactly right.

When marketers are tasked with building websites, or anything that has to do with positioning, partners are prone to killing innovative ideas that would lead to true differentiation. Instead, they want the assurance their peers would say or do "that"—they want PRECEDENT. They want to know what their competitors are doing. They want "best practices." 

Guess what??? If someone, ANYone, is doing it, it's not different. 

On May 17, Rick Telberg posted 12 Hot Growth Tips for CPA Firms that mentions some of what I'll be talking about June 9 at the AICPA Practitioners Symposium. Here's a snip from Rick's post:

“Without other distinguishing factors that buyers can readily see and know, clients resort to looking mostly at price for making their decisions,” she says. “This, in turn, drives down the firm’s revenues, which impacts the attitudes of those performing the work.”

Furthermore, “Without high enthusiasm for the engagement, customer service is not at its highest and this, in turn, reduces the quality of the customer’s experience, which makes them less likely to rehire the firm, and certainly less apt to refer the firm to others.”

“It’s a vicious circle,” she says. “Ironically, while the opportunity for firms to articulate and convey their distinctions via the Internet is more ripe than ever and costs almost nothing, especially relative to advertising, it is unfortunate that most firms are reluctant to embrace the advantages that the social media and an improved Web presence afford them.” 

 Pricing too low has deleterious effects on morale of everyone involved.

Here's a diagram I developed to illustrate the cycle.

What do you think? Does this convince firms to let marketing into the pricing conversation?

Does it compel firms to look at better, more visible ways to show their distinguishing characteristics (i.e. their PEOPLE)? 

Will firms be more to exploring what social media can help them achieve if they really understand how much it can help them in these other ways? 

Blog Post Fodder

Had a blast doing a webinar today for Moore Stephens North America about blogging for lead generation purposes. My presentation is on Slideshare.

Blogging for Lead Generation

And I promised attendees I'd follow up with this post about where to get posting ideas. 

It is geared for marketers who are supporting their firm's blogging efforts, but bloggers can do these things, directly, too!

• Search Twitter and search Google regularly for articles/news in your topic areas using keywords and phrases (experiment and adjust them to refine your results for greatest relevance)
• Subscribe to above searches in Google Reader so you can just check your Google Reader daily for new blog fodder!
• Subscribe to ALL related industry blogs (in Google Reader) and e-newsletters
• Comb through "sent items" in your email to find past emails you can sanitize (or have someone help you sanitize) as great "one Q at a time" postings. Add a sentence or two of context at the front and voila! Instant blog post.
• Feature clients, referral sources and PROSPECTS (like Scott Heintzelman of Exuberant Accountant does) by posting about neat stuff they are doing
• Seek out guest blog authors - people who are experts in your blog's industry focus area are best. Most willing might be experts who don't have their own blog or who are new to blogging and are seeking to build an audience.
• If you're a firm marketer, interview practitioners and draft some posts for them (but if they sit on them too long, stop doing this…don’t let them take more than 24-48 hours to turn a post around...this represents it's too low of a priority for them) 
• Suggest an editorial calendar, but allow for flexibility as spontaneous posts (as inspired) work best

Most importantly, if you're targeting business clientele, aim content at a very HIGH level for your intended audience. 

If you blog on business topics, don't be tempted to write "down" to a basic level or your posts are likely to seem too "101" to the executive level people you are targeting. Even if (especially if!!) it's a little over their heads, it will showcase your knowledge. Writing down or posting content that's too simplistic (e.g. new tax mileage rates when you are trying to showcase your consulting brilliance) makes you seem out of touch with your audience's real needs, and perhaps even condescending. 

Keep it high-level and this will differentiate your firm!

Negativity and Social Media - Are You Turning People Off?

Are you a turn-off?

There's a risk of this if you hang out on Facebook, Twitter, and LinkedIn—especially if you use the "status updates" features within these tools.

If you are a negatively-oriented person, it won't take long for people to see that you view the glass half empty.

If you are using any of the these tools for relationship development, especially business relationships, you may be doing yourself more harm than good. While you might elicit sympathy—some will surely rally-round and empathize, thereby encouraging more of this posting behavior—humans are, overall, more attracted to optimists than pessimists. 

People definitely don't want to hire or refer folks to Negative Nellys and Donny Downers.

If you limit your Facebook to family and friends, it may not be such a big deal to air your daily woes. Though I'd suggest even family and friends get annoyed by Eeyore! But if you have business contacts as "friends," you really need to think twice about what you share.

If you're on Linked In or Twitter, you probably ARE there for business reasons, and being negative undermines your efforts, big time.

3 ways to discern if you're turning people off

Everyone has the occasional bad day. Crummy traffic, bad service somewhere, kids out of control, or the occasional cold or flu. A random post now and again about such human things is no big deal if you more than balance it out with a more positive outlook on life.

But when downers are the trend, it's something you'll want to recognize and improve. Here's what to look for:

1 - Consider your present situation and demeanor. 

Most of us can be divided into one of two categories: those who believe "stuff" happens to us and those who believe we make stuff happen. If you're a member of the former group, you probably have to work a little harder than the other group to NOT sound like a victim of circumstance.

Another factor could be that you're just feeling too stressed out or overwhelmed. If this is the case, consider taking a break from social media. It's also possible that the cause is stress from feeling obliged to be using social media! Maybe social media isn't something you enjoy in the first place. You aren't obligated to be there—you can take a pass. 

More serious signs of negativity, and even depression, are feelings of unworthiness, putting yourself or others down, expecting the worst to happen to yourself and others and dwelling on past failures and disappointments.

2 - Review your status updates. 

In Twitter, simply look through your Profile to see what you've been posting. In LinkedIn, from your home page, click on the words "Network Updates" over the status input field. Then choose the "My Updates" tab.

In Facebook, a quick and easy way to get a big picture recap is to use an app like "My Year In Status" which will auto-generate a random selection of your status updates. Go thru Steps 1 & 2. On Step 3, you'll see an option that says "Choose different Statuses" - this opens a chronological list of every status update you've posted over the last year. (To find the app, type the "My Year in Status" in Facebook's search box)

Pretend you don't know yourself, and read them as objectively as possible. Are you a complainer? What proportion are rants or whines versus neutral observations or upbeat messages. 

Look also at feedback trends. Do fewer people comment on your postings than on postings by other friends in your circle? Has your post feedback decreased as negativity increased?

3 - Ask a sampling of trusted people.

Preface the favor with "I'm trying to be more aware of how I come across to others. It's important and I really need frank feedback. I trust that you'll be honest with me." Then ask: "Would you mind looking at my postings and tell me if you think I'm coming across more negative than positive?"

Be open-minded to their feedback and thank them for their frankness. It's really hard to tell people you care about that they don't come across well. Most will avoid it like the plague.

If you find more than 25% your postings are downers, maybe it isn't a deep problem, just that "dilemmas" are an easy source of things to write about—and they are! So it's a temptation to avoid. Hopefully the tips below can help. 

If more than 50% are downers, perhaps you are significantly unhappy with your job or the way things are going in life. This happens to all of us at times! 

It might wise to take a break from social media posts and redirect your energy in working through the sources of your unhappiness. By all means, don't be tempted post a play-by-play of your personal therapy (can you say "AWKWARD"!).

What to do to improve your image

If you do discover you've been less than pleasant to listen to, and you aren't a glass half-full person by nature, I'm not suggesting you have to go through life feigning insincere joy. Pollyannas are annoying, too.

What you're looking for is balance. And a greater awareness of how you are coming across to people. This is actually a very big part of Marketing 101. 

It might be that the attitudes you've been conveying through social media represent impressions you've created in "real life" social situations. Yikes! Be glad you've become aware of it, and change it, now.

Going forward, think twice before hitting that post button. 

• Is your post a complaint or a wish that something was different? If so, what's your purpose behind posting this? Looking for a shoulder? Hoping people will ask you to elaborate on the problem to show they care? If so, skip it. Social media is not the place for this. Pick up the phone and call a good friend or loved one.
• If it's victim-oriented (stuff happens), can you turn it to a positive projection (I'm gonna make stuff happen)? (e.g. "Tomorrow is going to be a great day" instead of "Today was the worst day ever" or "I sure hope tomorrow is better than today was")
• Have you been posting positive stuff lately? The occasional crabbing is human nature. If your last post was negative, though, fix it or skip it.
• Post about things other than your feelings or life's events. Share news, links, songs, anecdotes, tips, etc. Broadcast about other people and their merits—be a promoter of others.

Greater self-awareness usually corrects most of the problem. We simply don't think about how we come across until someone brings it to our attention. You'll probably become more aware of others' posts now, too.

Hopefully, if you're guilty of the Negative Nelly/Donny Downer thing, this lets you self-assess and correct before too many people notice.

IRC Section 7216: Impact on CPA Firm Marketing

There has been a lot of chatter about compliance with this new code released in July 2008, and put into effect January 1, 2009, and what it means for firms.

Directly reading the code, you'll find a lot of scary verbiage about restrictions to cross-marketing or cross-selling of services to tax clients.

This is to be "managed" via annually-required, signed, consent forms, from EACH client BEFORE their tax returns are delivered in order to be allowed to send said client information about ANYthing else your firm does. And you may only ask the client for their consent ONE time.

First thought, it's sounding a lot like crazy lawyer state bar restrictions on marketing and advertising. However, the intent is to protect taxpayer information including addresses.

Second thought, in keeping with tradition of most accounting regulatory language, this code is challenging, at best, to interpret. I've asked several tax professionals to give me their thoughts, and each professional has seen its implications differently.

(This explains my silence, to date, on this issue).

The accounting marketing community has been abuzz for the last few months about what the new regulations under Internal Revenue Code Section 7216 (26 CFR Part 301 Section 7216) will mean as they continue existing communication efforts with their clients such as print newsletter mailings, e-mail newsletters, and even seminar invitations for events that cover non-tax topics.

Fortunately, some vendor friends of the accounting industry like BizActions (a customizable e-mail news provider with awesome back-end click-through reporting) and PDI Global (long known for their high-quality print newsletters and planning guides, now offering some e-delivery too) have been sharing some insights on applicability of the code, especially as it pertains to the use of products like theirs.

Definitely look at this because, if you think you will use a mail house or a third‐party to distribute things like print or e‐mail newsletters, you may need to get the client’s consent first. Again, "first" means BEFORE you deliver their tax return to them. So you don't have much time.

LOOKING FOR INFORMATION AND RESOURCES?

I'm proud of my long-time trade association, Association for Accounting Marketing, for compiling this list of resources that partners and marketers can use as they embark on interpreting the code and deciding what approaches are best, for THEIR firms.

See AAM's IRC Section 7216 Information and Resource Page (marked Members Only, but access does not seem to be limited) and be sure to check out the AAM/PDI whitepaper found on that page as well as fellow blogger Rick Telberg's post on CPA Trendlines sharing sample consent forms released by the AICPA.

Happy implementing (ugh).

Appended: Also try the IRS Frequently Asked Questions about Section 7216

New Year's Marketing Resolutions

Lyne Noella is a wise lady whom I've long admired and known through the accounting marketing circles. Lucky for us, she has a blog called Relationship Marketing Program.

She posted yesterday her Top 5 New Year's Resolutions (all about marketing).

How Do I Form a Working Marketing Plan?

A relatively inexperienced marketer, new to the firm, wrote recently with the following situation.

Q. I recently interviewed my partners with a few key questions to begin developing a marketing plan for 2009. However, I'm not sure how to utilize this information and form a working plan. Can you point me in the right direction?

[marketer's questions in bold, partners' answers follow, only some of the questions are listed below]

1. What do you think are the firm's strengths? experienced tax department, consulting services, capable and friendly staff

2. Weaknesses? auditing, not enough work for the qualifications our staff has

3. Where do you believe the challenges and opportunities lie? getting quality clients, developing a niche market

4. What are the firm's short-term goals? more QuickBooks clients, more payroll clients long-term? have work that provides year-round recurring revenue, loyal client base

5. How do you believe that marketing can facilitate a process that helps us reach these goals? obtain leads, offer bundled services, advertise for more work.

6. What are the top three services we want to focus on this year? Payroll, QuickBooks, tax

7. What are the top three services we sell? taxes, QuickBooks, audits

A. There's more info to be gleaned before assuring your plan will have the "right" initiatives and but here are two things to delve into as a starting point:

ONE - regarding number 6, above, ask a LOT of questions about the stated desires to sell lots more “Payroll, Quickbooks and Tax services.” Particularly tax.

Payroll and Quickbooks aren’t usually big fee generators so they are lots of work to market for lower ROI. The only investment I’d make in marketing those services would be to significantly court referral sources so they can do the selling for you. Couple dozen good solid relationships can generate a LOT more new biz than a calling directly on three times that many prospects.

For tax, my concern is that I don’t know too many firms that actually have capacity in the tax department between Feb and April. Most firms are already wearing people down pretty well in these months and adding work in this time-frame is not a good strategy for keeping the team members you value. Maybe your firm is different and you have capacity….

So, in looking at their answer to number 2, it would seem you have the qualifications for more audit work but not enough of this work to justify maintaining those qualifications. What about increasing audit work (maybe there is another concern precluding your partners from suggesting this??) or collaborating with another local firm to let your folks supplement their audit teams or let you audit some of their clients if they don't provide these services.

Just some thoughts to consider. I'd have to know more to give a deeper suggestion about what products would be most profitable and practical to build on.

TWO - Your question number 3, above, "Where do you believe the challenges and opportunities lie?" is great and their answer "getting quality clients, developing a niche market" is a good and a rich place for you to start. But the answers provided need two critical follow-on questions:

A) What is your firm’s definition of “quality clients”? Does everyone agree to the same definition? (probably not) – find out whom your firm would clone (as clients) and then, go deep, and find out why!?

B) What niche, specifically? In your interviews, only services were surfaced. A niche should not be inwardly (product) focused, it should be externally (market segment) focused.

You don’t have to only serve “one” but for the sake of marketing effectively and efficiently, you should target one at a time and make your messaging EXTREMELY focused to that segment. The segment might be a demographic group or it might be an industry.

Some exploratory work should help you and your partners determine what groups make sense, in total, and then to prioritize them, starting with the top one or two in 2009. Add the subsequent ones later as your resources allow. 

Some other posts that may help you as you proceed are:

What's In a Plan? Marketing Plan & Budget Development

Choosing an Industry Niche

Excellent Meeting Tips (Especially Sales Meetings)

Came across this fantastic post on the blog of Alexander Kjerulf, aka Chief Happiness Officer.

We've all heard that the more someone else talks, the more brilliant they'll think you are! (or something like that.)

There are truly many different sorts of people in our world. But in general, we fall to two extremes, those who don't talk much and those who don't shut up. By nature, I'm pretty well immersed into the second group, but it is something I really do try to work on a lot. It's even part of why I became a facilitator...because we're not ALLOWED to talk much. Yet we still get to maintain some illusion of control. :-)

So, I'm always up for learning new methods of piping-down. Read the post for some great methods on biting one's tongue and, ultimately, becoming more self-aware.

As Alexander concludes:

Remember: good meetings are not characterized by the amount of talking but by the amount of listening going on.

If you’re a habitual talker like me, I’m sure that you will find that learning to say less and listen more will be a huge boon. People will find you more sympathetic, they will respect you more and even though you may end up saying less, what you do say will be received more appreciatively and have much more of an impact.

Are You a Better Listener Than Tom?

Just read a great story on Craig Weeks' Accounting Practice Business Development blog. The post is called "The Meeting Went Very, Very Wrong." 

I've seen very similar situations. It's like we're looking for that perfect opportunity during a prospect meeting to strut our stuff. And we'll jump at the first chance we get.

But what happens when it's premature? Or worse, when it's irrelevant (or at least the relevance isn't crystal clear)? We tank. Bad.

Read this little tale and see if you've ever "gone there" in a prospect meeting. I'm pretty sure I have.

Also, Craig's blog is only a month old, but I'm enjoying it. If you sell professional services, I think you might find some nuggets in it, too.

The Trick to Proposals is Knowing if You Should Even Do One

Just got back from teaching our Marketing Courses in Texas. Last Tuesday's class was on Proposal Systems and Processes.

Attendees are usually surprised when my class starts off with all the reasons for not doing proposals.

Personally, I hate RFPs, but responding to them is an essential part of doing business for many professional service knowledge firms. If you've got to do proposals, you might as well do them effectively, right?

About RFPs, Ron Baker posted at VeraSage the other day saying:

RFPs have become more commonplace as competitive bidding has replaced negotiation for price buyers.  It is as if dysfunctional buying practices have arisen to counter dysfunctional selling practices. 

Honestly, I didn't know Baker and I agreed quite so much on the topic of proposals. His post "RFPs and the Dreaded Winner's Curse" is a great read. He encapsulates my own philosophy really well (I swear we didn't even talk about this!):

Another strategy with RFPs is:  No surprises. Your potential customer should know everything in your proposal before you submit it. Gaining an understanding of your customer’s expectations, business model—how they make money—and how your company can add value is imperative to increase your odds of a successful proposal, one that will not suffer from the winner’s curse. 

Search for the differences that will ultimately be weighed in selecting a new supplier. If customers are worth bidding on, they are worth spending some resources on in order to improve your chances. 

Baker adds a list of eight hidden costs of bidding, with comments, from the book Co-opetition, by Adam Brandenburger and Barry Nalebuff. The first two really hit home. Some of the others don't trouble me so much...

1. There are better uses of your time. Keeping current customers happy may be a better strategic advantage as opposed to chasing after other company’s customers. Attracting a new customer can cost three to six times more than holding on to an existing one, and the existing one is most likely less price sensitive.
2. When you win the business, you lose money. A customer won on price alone is signaling they have no loyalty, and will leave you once they find a lower price. Do not fall into the trap of thinking you can start with a low price and raise it later; the evidence is overwhelming this will not work, as once you set a low price you are rewarding the customer for beating you up in price.
3. The incumbent can retaliate. 
4. Your existing customers will want a better deal. 
5. New customers will use the low price as a benchmark. 
6. Competitors will also use the low price as a benchmark. 
7. It does not help to give your customer’s competitors a better cost position.   
8. Do not destroy your competitor’s glass houses.

If you want to save a LOT of time and grief, get some good processes in place INCLUDING a process to decide if you even want to propose at all. If you're a firm that doesn't want to recreate the wheel, you should check out my class! ;-)

Contribute to a Study? (just takes a minute) - Part 1

My friend Suzanne Lowe of Expertise Marketing is gathering data for her upcoming book, "The Integration Imperative" and is asking professional service firms to contribute to four VERY brief (3 questions) surveys.

The first is live now (closes next week) and the others will follow (I'll post them, too) over the next couple months.

She writes:

Many professional service firms (PSFs) still haven't figured out how to get fee-earners and revenue-generating practitioners to truly embrace marketing and selling their services. Sure, more PSFs are employing carrot-and-stick programs to encourage fee-earners to market and sell.

But how many firms have intentionally re-tooled hiring guidelines to hire professionals who want to market and sell?

This first survey [take it here] is on deliberately hiring people who want to market and sell. If you take her one-minute survey, she will share the results with you.

The next three surveys will be on:

• evolving the scope of sales and marketing functions at PSFs
• how sales and marketing work with other departments, and
• how integrating sales and marketing benefits clients

Proposal Success Rate

Q. How do we know if our firm's success (win) rate with proposals is at, above, or below average? For that matter, what is the industry average for CPA firms?

A. My answer will apply philosophically to law as much as to accounting. As to a CPA industry average proposal success rate, a number like this isn't meaningful as it never compares apples to apples. There are just too many variables!

Consider different vertical markets. NFPs or governments almost always require formal proposals with most going out to bid at regular intervals. But businesses, especially the highly-desirable closely-held business market, will often close a deal over lunch or golf game and the "proposal," if it exists at all, might be a formality that accompanies the engagement letter.

If a comparison were made, I might suggest comparing a vertical market (construction, NFP, etc) to other firm's success ratios in those markets. But, I still don't think it will be very meaningful without knowing things for the compared proposals such as:

• Was the firm the incumbent?
• Was a personal relationship in existence?
• Did personal contact take place before answering an RFP?
• If so, how much contact? And what was the quality of that contact (i.e. was it private, one-on-one? In person? By telephone? At a widely attended pre-bid conference? etc)?
• How focused was the proposal on the prospect (customer-centric) versus the firm?
• Did the proposing firm demonstrate they really understood the prospect's situation and needs?
• Did the proposing firm meet the requirements of the RFP and have the experience to truly qualify for the work?
• Was the firm already widely known as dominate service provider to that industry?
• Was it a newly entered vertical market?
• Was the proposal professional-looking, user friendly and free from typos and other signs of negligence in preparation?
• Did the person presenting the proposal do a great job of demonstrating competence and trustworthiness? (or leave some seeds of doubt...?)

Any or all of these things will weigh significantly in the outcome and that is why I don't think a CPA (or law) industry comparison is worthwhile.

The best benchmark is to measure the firm against itself now and later. In the meantime, study existing processes to determine where your firm could use some improvement in the above areas!

Prospect Meeting Strategies

My friend Wendy Nemitz (her avatar at right) and her very cool team at Ingenuity Marketing have a fabulous new (since Jan) blog called PUB: Power Up Blog! that is geared for young professionals (35 and under), but provides sage advice for persons of any age.

The post I'm bringing to your attention today shares one of Wendy's take-aways from this month's Association for Accounting Marketing (AAM) conference. She discusses the presentation of a long time friend of mine, Russ Molinar, director at E&Y who talks about sales strategies: Pre-call Planning: Ensuring Effective Sales Calls.

Russ worked in sales with E&Y for years and spent some time in a smaller firm and then as a consultant. A brilliant strategist, I'm not surprised E&Y enticed him back. He knows his stuff.

Russ introduced five approaches to consider, as appropriate, in your competitive situation:

1. Pre-emptive
2. Frontal
3. Flanking
4. Fractional
5. Timing

Check out Wendy's post (and the rest of the PUB blog!) Your Prospect Meeting Strategy.

Confidence Worthy?

Ran across this interesting Harris Poll outcome over at Small Business Trends (Anita's blog is great!)

The poll shows that consumers have more confidence in small business leaders than any other leader they were asked about. Dreadfully, lawyers came out only slightly better than Congress and the press. Major companies didn't fare so well, either.

Here's the Harris Interactive site with full survey details.

(Why are accountants not on the list?)

Bodes well for the growing small business sector, though, doesn't it?

About That "Trusted Advisor" Goal...

I'm thrilled with Charlie Green's post, "Bad Marketing 101: Trust Me!" in which he writes:

...“trusted advisor” is something you want others to say about you, not say it yourself.  You can talk about it amongst yourselves, hope for it—but not proclaim it.

Saying you are, or want to be, someone’s trusted advisor, is like saying you are, or want to be, really humble.

His post is SO right on. "We are qualified to be your trusted advisor" (or similar) is one of the most annoying promises that I see on professional firm websites and in collateral materials. Besides being quite presumptuous (who says you know what I want in an advisor, and what I deem worthy of trust?) it is so commonly stated that it's now cliche.

Charlie, by the way, co-authored with David Maister, THE book on the subject, The Trusted Advisor, agrees it is an inappropriate claim in one's marketing materials. Thank you Charlie!

In his post, he says he googled "to be your trusted advisor" and it generated over 31,000 results. He opines:

Trust is personal—an outcome, not a come-on. On a first date, asking for either sex or for a very long-term relationship is likely to get you neither. “Trust me” is the business version—socially inappropriate, especially on the “first date” equivalent of the internet.

It's very similar to what I wrote in "Please Don't Put This on Your Website" when I recommended against staking a claim to be a future client's "partner" in their business. I wrote not to say:

"We partner with you…"

...This is a status you earn with a long-term client or it may be a role you are invited to act within for a new client. Either way, It's not something you promise to the general public.

The same with the trusted advisor thing. (My original post lists more things to avoid...)

I couldn't agree more with Charlie's post. Be sure to read his blog post comments, too.

Visit Your Clients

Surprisingly, when we urge professionals to spend more time thinking intentially and proactively about their clients (instead of just working on bringing in new biz), we are often met with looks--or even heavy sighs--that suggest, "you've got to be kidding."

As we coach professionals of all levels on their individual marketing efforts, it seems like we constantly need to emphasize the importance and benefits of spending a greater percentage of energy or effort on nurturing existing clients (versus new biz development). Existing clients should receive this heavier focus for many reasons:

1. increasing the level of service to increase the level of satisfaction/delight;
2. affect longevity in customer relationships;
3. inspire referrals from current customers; and, oh yeah,
4. increase the number of project opportunities relative to meeting customer needs--needs you won't know about or be able to help them with if you aren't TALKING with them.

I write today because I just saw Tom Collins' post over at More Partner Income discussing the results of a survey by The Remsen Group. I tend to take surveys with a grain of salt but look at these percentages reported in answer to the question:

Which of the Following Marketing Tactics Has Your Law Firm Found to be Most Effective at Generating New Revenue?

Meeting with customers AND specialization (reflected in organizational involvement) reign.

Well, now, isn't that what we've been telling you all along? :-)

Lost Clients? "Reasons" are Symptoms, Not Cause

Ever have a BFO? A Blinding Flash of the Obvious?  It's my sincerest hope that this becomes one for many readers. It was for me a couple years ago.

What are the reasons professionals think they lose or upset clients?

• price/fees
• not "proactive" enough
• poor service
• relationship changed/deteriorated (chemistry)
• etc

Sure, those are all valid complaints. And the REAL, underlying problem, for every single one of these, is that the customer expected to get something different from what they got.

I'll bottom-line it: Clients name these factors when conversations that should have occurred, did not. 

You could call it lack of proactivity or lack of service. It's lack of setting and meeting expectations(adjusting when needed). Think of it as "scope" for the soft-stuff.

There is a pretty easy solution. It involves 3 steps:

1. Listen/ask/listen more
2. Mutually establish expectations (written is good)
3. Meet them

If something usurps #3, conduct a conversation as early as possible to alter #2. If you cannot catch it in time, apologize profusely and fix it (without assigning blame, please).

To improve profitability, increase prices, retain clients, have happier team members (who know what expectations to meet), and solve most "service" related problems, apply the magic 3-step system above. It will change your firm forever. I promise.

If you want to see what inspired this advice, read Rick Telberg's post Finance Execs See Service Lagging at CPA Firms (excerpt below) and think about it relative to what I've written above.

What might cause the client to switch auditors?

Bay Street Group's recent studies of accountant-client relationships...got a surprising dichotomy of answers. CPAs tended to say one thing, while CFOs said another. Surprised?

Public practicing accountants (47%) seem to be under the impression that they lose clients due to "price, fees, costs, budgets and affordability."

But finance managers and CFOs have a different take. A solid majority (79%) point to "poor client service and lack of attentiveness." Fees and costs ran a significant second, at 66 percent.

Back on the CPA-firm side of the question, service was the third most commonly perceived reason for expected loss of clientele....

There's something wrong when twice as many CFOs as CPAs see service as the determining factor in client longevity. That might mean that a lot of CPAs are failing to offer what corporate accountants want....

The other reasons CPAs fear they might lose a client were distantly less common. Twenty percent thought "bad personal chemistry" might be the problem; 19 percent recognized that they might not be proactive enough; 17 percent figured they'll beat the client to the punch by firing them for business reasons; and 11 percent worried that the client might take the function in-house.

The third most common gripe among financial officers was "not getting enough time with CPA firm's best people" (again, a matter of service and attention) at a significant 38 percent. Bad chemistry followed next, at 34 percent. Lack of proactive advice came close, at 33 percent. Twenty-two percent said they might need new or different services.

Every time I see these "reasons" hashed out, again and again in study after study, I just want to shout the expectation mantra. It really works.

No matter how small the job or client, the "scope" of these issues is every bit as important to the customer (as demonstrated by defection and complaints) as the scope for the technical aspect of services.

Clarify your buyers' price expectations and parameters and use change orders as needed (better to identify fee sensitivity on the front end!). Ask about their preferences for communication frequency, delivery, staffing, level of "extra" advice/consulting expected, and so forth.

You will be shocked at how much less they expect than what you think they will "require." Either way, it gets everything on the table. Document it in the client's file and in your contact management system, if you use one.

Wouldn't you appreciate the same when you buy professional services?

So, was this a BFO?

Research Calls More Effective Than Asking for Referrals

Still at the Assoc. for Accounting Administration conference in Indy, today. Ran into Gale Crosley who just gave a well-received session on Turbo-Charging Lead Generation. In her session, she introduces the "research call" concept which, compares favorably to more commonly-used referral source techniques involving "asking for" referrals.

Her research call method is very different from the sometimes uncomfortable referral request. "Instead of asking for business," Gale says, "business is revealing itself." She says that it helps people "ramp up their book of business faster, in about one-third the time, as the old way."

This method sounds ideal for mid-level people who are perhaps on the partner path and need a solid book to be well-positioned for partnership. It also works for established practices, though changing ways of doing things is more difficult for people the longer they've done something another way. Either way, these are really good concepts to go back and teach your team!

Gale is giving this presentation again at the upcoming Virginia Society of CPAs 2006 National Practice Management Summit in beautiful Hot Springs, Virginia in August. Dates are Aug 23-25 at the Homestead Resort & Spa. Details at the VA Society site.