Your Future Firm Starts Now: Success Strategies for Launching New Services – Part 3
October 19, 2016 | The Whetstone Group
We are taking a closer look at a 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. On Sept. 21st we introduced steps 1 and 2 – Research Market Needs and Evaluate and Prioritize. Oct. 3rd we examined steps 3 and 4 – Define the Scope and Go to Market with Your Service. This week we conclude with step 5 – Tracking Results and Measuring Success (including a downloadable guide for the whole process).
Step 5: Measure your results
What gets measured (and reported)…gets done. When you analyzed the costs of building this service capability in step 2, you likely got a feel for the level of revenue you need to reach profitability. Set a specific sales goal for the new service, allowing for ramp-up time to go to market appropriately. Services with high levels of opportunity within your existing client base will become profitable more quickly than those for which you must go outside of the existing client base to find opportunities. Develop a pipeline report to track opportunities associated with the new service – including the stage of the sales cycle, value of the opportunity and probability of closing.
It’s helpful to assign responsibility to an individual or team to be held accountable for reaching the goal, and measure their results regularly throughout the year. Hold regular meetings to evaluate results and discuss what, if anything, is getting in the way of success. As these success barriers are identified, discuss how to resolve or work around the issue and provide support to the service champion/team.
Establish accountability for sales results for your new service by incorporating the goal and results into the individual/team’s annual goal setting, evaluation and compensation discussions.
This series has discussed a 5-step process for successfully introducing new services:
- Research market needs
- Evaluate and prioritize new service ideas
- Define scope and communicate
- Go to market
- Measure results
Addressing each of these steps with the discussed approach will improve your ability to continue meeting your clients’ evolving needs, attract new clients, and sustain profitable growth for your firm.
We’ve summarized the approach described the past few weeks in our New Service Evaluation Checklist. To download the checklist click here.
If you are interested in learning more about how to implement these steps, or how new services fit into your firm’s overall approach to topline growth contact us at firstname.lastname@example.org or 319.447.6400 for a no-cost, no-obligation meeting.
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!