Your Future Firm Starts Now: Success Strategies for Launching New Services – Part 1
September 21, 2016 | The Whetstone Group
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
- What are the biggest challenges facing your company over the next 2-3 years?
- How do you see these challenges impacting your company?
- What obstacles do you believe are or will hinder your ability to address these challenges?
- What outside assistance do you believe would help you address these challenges?
- 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):
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.
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.
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.
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
July 19, 2016 | The Whetstone Group
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.
May 6, 2016 | The Whetstone Group
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
September 8, 2015 | The Whetstone Group
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:
- 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.
- 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?
- 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)?
- 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?
- 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.
- 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 email@example.com to learn how our professionals can help.
The Hard Truth about Soft Skills
August 28, 2015 | The Whetstone Group
“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:
- 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.
- 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?
- 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.
- 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.
- 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.