Rita Keller, an award-winning and widely respected voice to CPA firm management, is uniquely positioned to help CPAs and their teams face rapid and significant change.
“You get to choose your customers, not the other way around.” – Seth Godin
Yesterday I wrote about providing too much information and spending too much time with a potential client before you know they are a suitable fit for your firm.
This is a tough issue inside many CPA firms.
Firms are competing heavily for new clients. You need them. So, you add new clients without subjecting them to a rigorous client acceptance process.
Has your firm grown by accepting every client that comes along and keeping them even when they are a collection headache? Is there pressure on your partners to bring in new business so that they can claim their share of the profits during the year-end compensation dance? If these type of actions are in your past, think hard about your future.
Ask your team members about the quality of your client base. They will tell you immediately which ones they would nominate for out-placement.
Even though you really know you should serve clients that fit your mission, clients you like and admire and get rid of those that are poor business people, most of you will continue to work with clients that you really don’t like very much, who treat your people disrespectfully and then don’t pay you.
Seth Godin had a good post on his blog about Choosing Your Customers. Seth says, “Yes, you get to choose them, not the other way around. You choose them with your pricing, your content, your promotion, your outreach and your product line.”
The essence of strategy is choosing what not to do.
“Absorb what is useful, discard what is not, add what is uniquely your own.” – Bruce Lee
I enjoyed attending the CPAFMA Ohio Chapter meeting last week in Columbus. Katie Tolin of CPA Growth Guides enlightened the attendees about the importance of product development, something missing from most CPA firms.
Here are some bullet points from Tolin’s remarks. I hope you find them very thought-provoking!
For a CPA firm to grow, they need 3 things: marketing, business development, and product management.
In most firms, product management is missing – you need all three.
Accounting is a mature profession and compliance work has hit its peak.
We are in a sea of sameness. Starbucks elevated the cup of coffee. How have we changed the tax return? About the only thing is e-filing, now everyone does it.
Technology is speeding things up and that kills billing by the hour.
We have mature products and a mature industry, how do we innovate? It can’t only be about new products (services), we need to innovate things we already do.
You must always challenge the status quo. Make it part of your culture.
Employees need to be empowered to please clients. You need two things, happy clients and happy employees.
“If you look at history, innovation doesn’t come just from giving people incentives; it comes from creating environments where their ideas can connect.” – Steven Johnson
Many firms, in recent years, have adopted an incentive plan for bringing new business to the firm. It is usually a percentage of fees billed to the new client for the first year of service. Some firms pay a percentage for the first two or three years of service.
The most common ones that I am aware of are 10% of first-year fees or 5% of fees for the first one, two and/or three years.
Some firms require that a certain amount of fees must be billed and even that certain realization levels are accomplished. They also pay the incentive on a delayed schedule – after services are rendered and fees are billed (and collected, in some cases).
Why not be more generous? How motivational is it to make the effort to bring in new business when the reward comes way down the road with lots of stipulations.
At my firm, we paid 10% of first-year fees at the time the initial engagement letter was signed, based on the amount quoted in the engagement letter. We did not pay for individual income tax clients unless they were quoted a fee over $2,000.
The incentive was intended for business clients. If we quoted a range of fees, like many firms do, such as $3,000 – $4,000, we paid the team member 10% of the higher amount. If first-year fees ended up being more than the amount quoted in the engagement letter, we paid the make-up amount after the year-end. This policy did not apply to partners. All that was required is that the team member made the introduction and involved a partner.
Whatever your firm offers, keep it simple and provide more timely gratification to the team member.
Just FYI, we did not pay-out this incentive very often. It didn’t seem to motivate staff and admin very much.
You've got to change incentives for good behavior as opposed to just disincentivizing bad behavior.
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” – Jeff Bezos
As I mentioned in yesterday’s blog post, here is an example of a Mutual Commitment Statement that I often share. Simply customize it to fit your firm.
Our Mutual Commitment Statement
I, Sally Partner, and the entire team at (name of firm) want your experience with us to be the best it can be. We offer the following commitments to you:
You will be respected and never taken for granted.
We will act with integrity, honesty and openness in everything we do for you and with you.
We will absolutely respect the confidentiality of our working relationship with you.
We will return phone calls and answer email within 24 hours.
We will meet the deadlines we set. In the case of circumstances beyond our control, we will notify you and discuss with you immediately.
Our services will rarely, if ever, be the least expensive. They will, though, always be of exceptional quality and designed to help you obtain significant value.
You have the right to know our fee structure in advance of any engagement.
You are the sole judge of our performance. If anything we do falls short of your expectations, we – without question – will respect your right to simply pay for whatever you feel the service was worth.
To facilitate our efforts in providing the highest level of service, we ask the following of you.
You will be open, frank and honest with us at all times. You will let us know immediately of any concerns you have about our work together.
You will give us all the information we need to complete our assignments.
You will meet mutually agreed upon deadlines. In the case of circumstances beyond your control, you will notify us immediately of the situation.
You will pay our fees per our engagement letter. If you cannot pay, you will call and talk to us immediately.
You will give consideration to referring us to at least one other business that might benefit from our services.
If you take care of your people, your people will take care of your customers and your business will take care of itself.
“Have something to say. Say it. Stop talking.” – George Lorimer
You probably do it all the time. I often do it, too. Send an quick, easy email to communicate with someone about a project or because you haven’t heard back from someone about some thing, in a while. Your subject line simply says “Just Checking In” or “Touching base” or “Checking on Status,” or something similar.
CPAs send these kind of emails to prospective clients. You have made your pitch and they are in the decision-making mode. You haven’t heard anything for over a week, so you need to touch base or check-in.
The reason people like to send these short emails is because they are very quick – it takes less than 30 seconds. Often, you still don’t hear back. It’s probably because your “quick” communication does not provide any value.
“If you’re trying to be successful, networking is the difference between mediocre and big.” – Jeffrey Gitomer
Sure, accounting firms are getting a lot of new business via social media. Many new clients now come directly from your website. I love to see CPAs using Twitter and Instagram. There are some great blogs out there authored by CPAs.
Here comes the but. But, personal networking is still an extremely important part of career-building for CPAs working in public accounting. If you are just beginning our CPA career – begin networking now. If you have many years of experience and really haven’t been expected to bring in business up to now – begin networking now. If you are a partner who rarely brings in business – begin networking now.
I am a fan of Jeffrey Gitomer and all his writings about sales and other things. He says, “Networking is life skills and social skills combined with sales skills. It is business leisure conducted before and after work – as proposed to business frantic, which is conducted from 9 to 5 (the exception being lunch)
Here’s Gitomer’s principles of networking:
to get known by those who count
to get more prospects
to make more contacts
to make more sales
to build relationships
to make a career advancement (or just get a job)
to build your reputation (and be seen and known as consistent)What do you need to be a successful networker?
A GREAT 30-second commercial that engages and asks questions that qualify the prospect, and gets to the next step in the sales cycle if there’s an interest.
Your willingness to dedicate the time it takes to do it and be excellent at it.
A plan of where and when.To maximize your networking effectiveness, you must follow one simple rule: Go where your customers and prospects go, or are likely to be.
“It is nice to have valid competition; it pushes you to do better.” – Gianni Versace
As I have interacted with many firms over the years, I have observed that some partners are not worried at all about their competition and some partners are almost obsessed with beating their competition.
No matter your degree of concern, it is a good practice to be aware of your competition, their strengths and their weaknesses. In reality, they are strongly targeting your best clients (just like you are targeting theirs).
As Jeffrey Gitomer (sales guru) says, it is a sales war and winner take all. He also suggests some Competition Success Strategies:
Speak kindly of your competition, or say nothing.
Respect competition, and others will respect you.
If others speak negatively about anything or anyone, DO NOT join in.
Know your competition’s weaknesses, but focus on your strength and value.
Know why they won, when you should have.
Know how they speak about you, and build response into your presentation.
Know how to beat them until they hate you (hating them is a waste of energy).
I visit CPA firm websites all the time. I want to see what YOU are doing and how you are doing it. I want to see the firms that “get it” and the firms that have no clue. It helps me with ideas for this blog and ways I can assist my clients.
Recently I visited a site and the firm did have a blog link at the top of the page. However, the page was blank. Frequently, I visit CPA firm blog sites and the last blog post was six months ago or longer. If you do blog, do it on a regular schedule – weekly or monthly – be consistent.
Don’t shy away from blogging. You have some great business minds within your firm and CPAs have so much to write about and to share. The writing itself is a great way to reflect upon your work and your professional purpose.
Try blogging, you will like it! It’s only two or three paragraphs. If no one follows, it is still a good mental exercise. The more you blog the better you get. Then people will follow and you’ll attract new clients to your firm.
Watch this short video from Seth Godin, one of the most famous bloggers and Tom Peters.
I do not over-intellectualize the production process. I try to keep it simple: Tell the damned story.
“If YOU don’t believe in YOU enough to invest in YOU then don’t be surprised when others don’t invest in YOU.” – Grant Cardone
I am often disappointed in some less experienced people working in public accounting when I learn that they always EXPECT the firm to pay for ALL of their learning and continuing education.
Some even expect the firm to pay for a book that might help them with self-improvement.
The investment in yourself is the best investment you can ever make. The “firm,” for one reason or another, won’t pay for you to attend a specific conference, seminar or meeting. Maybe you should pay for it yourself if you really believe it will enhance your career advancement. Maybe you should buy some self-improvement books, tapes, podcasts or apps and actually read them and listen to them.
Commuting time could turn into a motivational session.
“The best business advice I’ve ever been given was from my mother, who was never actually in business,” the self-made millionaire tells CNBC. “She said, ‘The best investment you will ever make is in yourself.It’s a no lose deal. It will always give you a return. Nobody can take it from you. It’s yours.'”
I’m not your mother but my advice to you – no matter what your age: Invest in yourself!
Success will not come knock on your front door. You must go find it.
I like this quote from 
