By Peter Brown, Senior Consultant, Sageworks
Your firm may be successful today, but everyone knows that success can be fleeting unless you're continuously thinking ahead to identify and win the next client. The key to developing a strategy for winning new clients is to answer these key questions: Why? Who? What? How? Here are some questions that can help you to develop focused and effective plans for gaining new business.
As you consider ways to win new clients, it's important to understand what's driving your efforts, so an important question to answer is, why are you seeking to add clients?
Beyond your obvious desire to make money, what's the strategic reason for your business development efforts? Is it to increase market share in an existing market? Is it to reach a new market – in terms of geography, types of clients, industry specializations, or service offerings? The answers to these questions will clearly influence how you respond to other questions surrounding strategy.
Knowing your goal should help you as you answer the question, who offers the expertise at your firm that can help you reach your goal? Who has the most clients in attractive industries where you'd like to expand, or who is the expert at audits, if that's a targeted growth area. Who is best at providing business advisory services or some other service area you believe is ripe for harvesting? What are their specific skills that are unique?
Don't underestimate the importance of expertise and specialization. According to the recent survey How Buyers Buy Accounting & Finance Services by the Hinge Research Institute, sellers of services overestimate the importance of cost and customer service as preliminary selection criteria used by their prospective buyers. Fifty-five percent of sellers said they believed cost/terms was the biggest selection criteria of buyers, but only 30 percent of buyers agreed. More often (46 percent), buyers said the team's expertise and skills were top priority.
Some accountants and firms must make changes to develop more appealing services, so consider what changes organizationally or personally are needed to highlight strengths in the targeted growth areas. Does it mean additional training, or can this shape your choice in your next hire? Are there clients you need to shed in order to free up staff resources for more valuable service offerings?
Are there opportunities to shift workloads to afford the experts in the growth area more time to focus on their specialty? You may be a great auditor, while your partner may be gifted on the tax side. Can you send business to each other so that each can specialize? This is really what ends up setting firms apart – specialization.
Again, while most sellers of accounting and financial services believe clients are primarily interested in avoiding overpaying, the Hinge Research study found that buyers seek to avoid firms that don't understand their industry when they're choosing among competitors.
What will you offer that differentiates you from the other firms seeking that same client, and how will your marketing reflect those differences?
Many firms believe their technical competence and solid reputation in the community sets them apart, but if every firm is correct (i.e., is competent and has a good reputation), how does a potential customer choose one? Increasingly, expertise and specialization are what "tip the scales" when it comes to the final selection by buyers of accounting and financial services, according to the Hinge Research study. A close second was the existing relationship the buyer had with the seller. Reputation and good customer service were ranked even lower, and cost was not even among the top five deciding factors.
In other words, you don't have to be all things to all people. Targeting a market where you're the expert or where you already have a concentrated business may be more effective than trying to be a jack-of-all-trades but master of none.
In which industries do you already have a concentration of clients? By using industry benchmarking data, you can hone your industry expertise and your ability to provide meaningful advice to companies in that field. Use benchmarking analysis of current clients to identify their strengths and weaknesses and seek opportunities to show off that knowledge with prospects.
What services are natural extensions of your compliance work? Many accountants use financial advisory software tools to help them provide clients with a user-friendly financial analysis of the business and to help them explore ways to improve their performance. Utilize financial forecasting to show what can happen in best- and worst-case scenarios and to show clients how what they do in the business (such as borrowing or cutting costs) can affect those scenarios.
The final question to consider as you focus on business development is how can you reach these prospects and implement these moves?
As noted previously, relationships are among the top deciding factors when buyers select a service provider for accounting and financial services, so look for low-hanging fruit first as you cultivate new business. For example, if you're already providing financial statements or tax returns, consider using tools to provide business owners with a streamlined executive report as an added service.
Even if you started the process of seeking new business assuming that you had to find new clients, don't overlook the value of existing clients. The AICPA has estimated that it costs eleven times more to bring in a new client than to keep an existing one. Another recent study showed that client retention rates improve as the number of services received increases. Meanwhile, existing clients are probably more interested in additional services from you than you suspect. Two-thirds of buyers in the Hinge Research study admitted they don't know about all of the services offered by sellers, but 44 percent were interested in additional services.
In the Hinge Research study, buyers asked to identify their top organizational challenges and priorities named the difficult economy and competitive marketplace more than half of the time, while attracting and developing new business ranked second among key challenges.
Consider each of these named challenges and how your firm might be able to serve as a trusted advisor to the client as you develop client service plans. Most importantly, talk with your own clients. Reach out to them simply to thank them for their recent business and use the exchange as an opportunity to learn more about their concerns and challenges of owning or operating a business.
A host of services that your firm can offer, including providing business risk assessment, business projections, or cash flow forecasting, can address these concerns while solidifying relationships with existing clients or reaching new ones.
About the author:
Peter Brown is a senior consultant for Sageworks. He brings experience in technology, business, and financial services into his role. Graduating with a computer science degree from West Point, Peter successfully navigated the challenges of running a small business in a competitive marketplace. Afterward, he worked in financial services working for Fidelity Investments. At Sageworks, he uses his unique background to provide superior advisory services to Sageworks largest clients.