Session Moderator: Welcome and thanks for joining us. We have a lively workshop planned! Before we get started, let me assure you that we'll answer all your questions even if we have to look at them at the end of the session. Our workshop is interactive, so feel free to jump in at anytime!
Let's introduce our workshop leader first.
Sylvia Pate has a management consulting and development practice in Dallas. She is a former Director, Executive Education SMU Business School. In 1992 Sylvia began a market study of the effects of marketplace and organization change on employee morale and productivity.
As former practice head for a market leader in the area of change management, Sylvia's firm works on the basis that "individual contribution is the driving force behind business success, and that teaching people to think in terms of business strategy most effectively engages them in work."
Sylvia Pate: Thank you! I hope today's workshop provides compelling, useful information for all participating.
By the end of today's session, you'll have a number of ideas on how to justify fee increases using Value Pathing, one value-adding methodology.
As AccountingWEB subscribers, you demonstrated first-hand the importance of addressing the issue of "Value Added" by totaling over 700 hits on the "highlights" and transcript from the initial workshop, "Value Pathing: Adding Value to Client Services".
Today, let's focus on 2 critical issues: how to personally serve the customer better and cut costs.
Topics we'll address:
Value-added Results and Costs
Value Paths and Incremental Efforts
Your Questions About Value-added Actions
I. Value-added Results and Costs
Already, you make Value Added decisions. When? Minute-by-minute, deciding how to use your time? Performing daily routines? Spending money? Handling clients?
How do you know you've made EFFECTIVE Value Added decisions? You make greater impact with less effort. You get more involved in practice decisions. Customer loyalty grows. You get fewer fee-based questions and client churn goes down. Your resources/ Cash/ Time/ other people/accomplish more.
What elements go into Value Added decisions? RESULTS and COSTS and leveraging the DIFFERENCE between them. We could do a whole workshop on tools that leverage RESULTS and COSTS. Let's focus on a single tool that surfaces incremental high-value efforts: Value Pathing.
II. Value Pathing and Incremental Efforts
Executive, managers and individuals use Value Pathing to chunk down business practices into individual actions and assess the value of their actions. Breaking down business processes into precise actions allows you to make incremental adjustments to your actions to better meet client needs and more efficiently.
Value Pathing uses 4 types of analysis:
1. Action Scan- analyzes personal activity at ground zero
2. Value Rating- assesses client value for personal activities
3. Dependency Points- examines incremental activities that JEOPARDIZE client relationships
4. Critical Points- examines incremental activities that GROW client relationships
Let's use a real-life situation to bring Value Pathing to life: JUSTIFICATION FOR HIGHER FEES! Think about how you might use Value Pathing to communicate Value Added to justify a fee increase!!!
Let's focus on the Planning stage of an Audit. (Same example as that used in Value Added workshop, Part I with a new application!) Identify surface, ground-zero actions like: Audit scheduled, audit team assigned, inventory data provided by client, prior year reports reviewed, dollar value of client inventory established, audit reconfirmed, audit team deploys (to client's horror!)
To increase your value to the client, what small changes can you make to the way you do these ground-zero actions? Let's assume that working harder is not what you want. Rather than allocating more effort and working harder, how you can THINK differently? How can you increase your impact and not your workload?
Think about ground-zero actions that occur during an engagement and answer, "What incremental adjustments can I make to:
Save the time of my client's management team?
Reduce the involvement of my client's staff?
Take less of my client's physical space?
Reduce other overhead expenses for my client?"
Making a positive impact on any of these show that you increased RESULTS. And if you did it within the same billing fees as before you:
At the same COSTS?
Which Grew Your VALUE ADDED!
Whew!!! That was a lot of info!!! Any questions or comments????
OK. We'll move on!
Now, to JUSTIFY HIGHER FEES use Value Pathing to make incremental adjustments to your actions that increase the real and intrinsic value of the engagement to the client.
Think differently again about actions can you take that impact your client's:
Business growth: through actions like by providing clients ideas that are cross-pollinated from other industries (Herb Kelleher grew Southwest Airlines doing this).
Productivity: by actions like recommending measures and business practices you noticed in other companies that increase output.
Operating efficiency: by actions like compiling data that has multiple purposes?
When fees are increased your job is to neutralize the effect of increased COSTS by increasing the RESULTS of your work! It's the RATIO of YOUR Results to Costs that counts.
Let's stop for a moment and find out your thoughts. What are finding out there? Are you increasing fees??? If so, what's been the response of clients?
Session Moderator: Sylvia, I've heard that firms want to increase fees but have a hard time communicating what the client is getting for the increase.
Angela Babler: We've increased fees by adding/merging our accounting firm with information technology and human resource programs. The response has been positive ... we're one stop shopping now!
Sylvia Pate: Are you aware of fee increases that have been made yet are difficult for personnel to address with clients??? In many cases, firm personnel struggle...unlike the situation with you, Angela. What's the VALUE ADD your client's see in your changes? That maybe a hard answer to come up with. If so, you're not alone.
Frequently, organizations speak to be "value added" but have a difficult time differentiating themselves in that statement!
Angela Babler: We have built a sense of trust with our clients. Rather than searching out someone to help with technology we have the resources and the "built-in" trust.
Sylvia Pate: Great!
Are you ever faced with having to assess more hard, tangible, dollar-results that your' services bring?
Bret: Somehow the value add has to be turned in to a tangible that the client can identify with ... and sometimes that is simply better formal communication.
Sylvia Pate: Great feedback Bret!
Can you put a dollar value on communication? It's hard in most cases! One way to quantify things like communication and follow up is to think in terms of the labor time it saves the client...or perhaps the costs of errors.
Angela Babler: Follow up is priceless!
Bret: It depends on the value that communication represents to the client's business. Sometimes we may think we are getting credit for the results we bring, and in some instances we aren't simply because they are not formally acknowledged.
Sylvia Pate: Once you are able to assign a dollar figure then your fees make increased sense! To get acknowledged for your results, what small incremental adjustments can you make in client communications? Is there a way to structure your communications so that clients DO SEE and ACKNOWLEDGE their value? Since communications is so critical to effective client management, lets to back to the value equation we used earlier and see if we can come up with a VALUE-ADDED ANSWER!
For all of you...can you identify some precise steps or actions that you take when you communicate with a client? Don't make this too hard...the answers should be somewhat obvious or instinctive!
Angela Babler: 3 goals, 3 concerns, 3 initiatives.
Sylvia Pate: What if in a communication you mentioned that data can be gathered simultaneously for use in an Audit...and later (though in a different format) as part of their Tax Return! Could that save the client time?
Is there anything you could suggest in a communication that could save time for their staff?
Try to focus on precise actions you take when you communicate...like what points you communicate about and what media you communicate with.
Bret: There are always opportunities to be consultative and make observations or suggestions that may improve their business. The trick is to keep the eyes open and look for things.
Sylvia Pate: Great thought! There are opportunities. The degree to which you can find them...and not add hours, stress, and effort to your day is the real challenge to address!
Bret, what do you do to keep your eyes open? Can you think of specific examples that show clients you are taking an action that is different than they expected and they have great value for?
Bret: One way is to develop a list of things to look for that may either be a service you can offer, or maybe refer to a trusted referral source and then refer to the list during engagements.
Sylvia Pate: Super! So have on hand a list of resources that you can recommend!
Liz LaRose: Bret, what types of things do you look for? Do you have a cheat sheet?
Bret: Yes. We do some technology consulting and keep a list of common areas that clients may be neglecting ... like security or data backups.
Sylvia Pate: Bret, when you introduce your client to your network, how does that help them?
I'm working to get you to talk in terms of RESULTS AND COSTS. When you show a client a list does that save them time? To the degree that time is saved you have a QUANTIFIABLE RESULT. And with a RESULT you are positioned to consider the COST of providing that RESULT... with the difference between the 2 being your VALUE ADDED!
So Bret, to your great example...If you are able to save the client 10 hours of time in finding a resource and it took you 5 minutes to show him the list....you've brought tremendous VALUE ADDED!
And as you think differently about incremental adjustments you make keep foremost in your mind the perception of value is in the eye of the beholder.
Any other ideas on actions that increase RESULTS for your clients?
Value Pathing is just one means to identify specific actions that increase your VALUE ADDED. The key to identifying those opportunities, regardless of your situation, is to think in terms of precise actions you take...as with Bret and the reference list...and think of the impact you can make with very slight adjustments to what YOU ALREADY DO! By adding effort you increase your COST...the cost of your labor, overhead, etc. By focusing on incremental adjustments to existing actions you find it easier to increase VALUE ADDED without increasing your workload!
Any thoughts or comments about making incremental adjustments to increase your value?
We hope you'll continue to think of ways to make incremental adjustments and focus on high-return activities.
Lara Niles: I have found that it is easier to make adjustments when new clients come in. Quote a bit higher than you have in the past. We are also have talked about sending clients a questionnaire about what services they would like to see us offer - that would add value to what they already receive. Maybe after 4/17 this year.
Sylvia Pate: Great idea! Has anyone else done that? In those cases, are they pretty easy to please?
Lara Niles: Yes, easy to please, but hard to keep. It's competitive. Most come as a referral from another client, so they have some preconceived notions about the service they will be getting.
Liz LaRose: Yes, we hired Jay Nisberg to do a client survey and we got lots of great data.
Vicky Lanier: We haven't done a questionnaire, but we have done Client Advisory Boards.
Sylvia Pate: Liz and Vicky, what data was new information to you?
Liz LaRose: Our survey uncovered our strengths, weaknesses and many new services we can begin offering to our clients that we didn't realize they needed.
Sylvia Pate: Liz, are you planning to add some of those services?
Liz LaRose: Yes, we are now in the planning stages of our marketing program for the next year. We will be adding services in stages to make the transition do-able.
Sylvia Pate: Great!
Liz LaRose: Yes, we found that many of our clients didn't know some of the basic services we provide. My job now is to get them more informed.
Sylvia Pate: Makes sense to let clients know your services!
Vicky Lanier: The best information was that we assumed we knew everything the client needed and began to realize there was much more that they need. The CAB allowed us to get with our clients on a one on one basis and discuss additional services.
Sylvia Pate: Super!
Lara Niles: We included with our organizers a list of ... Bet you didn't know we did this.... Our clients are surprised that we do some specific advising. In many cases it's just a matter of telling clients what you do. You already do it, so the cost to implement is low - just tell them you can!
Angela Babler: Liz & Lara, were your survey's multiple choice? Or fill in the blank?
Liz LaRose: Multiple choice with areas to add comments.
Lara Niles: Ours is in a "to do" binder right now. Have not gotten around to sending it out, needs some refining. I think now we will hold off until after tax season and include questions about this past tax season and use that information to make next year that much better.
Karen Stewart: Liz and Lara, what were some of the things clients said they wanted that you had not thought of offering?
Angela Babler: What do you suggest for cross selling your services?
Lara Niles: Cross selling is easy if the whole team is informed about EXACTLY what it is that you can do for them. Maybe they can't do it, but if you know what the firm capabilities are it makes it easy.
Sylvia Pate: I've been informed that we're about out of time. Does anyone want to exchange telephone numbers? If so please do...
Karen Stewart: Liz and Lara, what were some of the services your clients said they needed that you had not thought of?
Lara Niles: Financial Planning is the biggie. Estate planning and help with wills are also big.
Liz LaRose: Karen, we were considering items like Staffing, Financial and others. Please feel free to contact me at firstname.lastname@example.org.
Lara Niles: My email is email@example.com if anyone is interested.
Session Moderator: Are there any questions before we start wrapping up this informative workshop?
Sylvia Pate: For more concrete actions to take to be Value Added, or to use Value Pathing please call or email at http://www.business-insight.com/
Sylvia Pate: As our clients are reminded, "Never be afraid to try something new. Remember that amateurs built the ark. Professionals built the Titanic!"
Liz LaRose: Yes, any thoughts on easy ways to inform clients about services that we have and they should know about?
Session Moderator: Wow! This was information packed! Thank you Sylvia! We have a few more minutes any other thoughts?
Sylvia Pate: I'd like to work with you on your questions 1-on-1. Is that ok?
Angela Babler: Yes!
Session Moderator: Liz, I heard about a firm that gives clients a "menu" of services in their welcome kit. Could that help or be useful?
Sylvia Pate: As you look at your services, PLEASE.... consider the RESULTS, the COSTS...and your VALUE ADD!
Liz LaRose: Yes we are beginning to do that now with welcome letters.
Sylvia Pate: Thanks for all the great chat! It was fun....
Session Moderator: Thanks again for joining us today. Have a successful week!