maybe you have more to offer.
by marc rosenberg
the rosenberg practice management library
true story: i was leading a meeting of a seven-partner, third-generation cpa firm. their revenues were stagnant and their profits disappointing. one hundred percent of their revenues were audit, accounting and tax. thirty percent of their business clients were in oil and gas.
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we started discussing ways to increase revenue. the dialogue went something like this:
rosenberg: i notice that your firm is 100 percent compliance, no consulting. aren’t there some consulting opportunities there?
the partners: what would we do? we’re accountants. we don’t know how to do consulting.
rosenberg: you’ve told me that 30 percent of your business clients are in oil and gas. is that correct?
the partners: that’s true.
rosenberg: roughly how many businesses are included in the 30 percent?
the partners: about 40.
rosenberg: how long have you had these clients?
the partners: most of them have been with us for 30 years or more.
rosenberg: would it be a safe guess that you guys know a lot about the oil and gas industry, what the more successful companies are doing and what holds back the less successful ones?
the partners: oh, yes. we have acquired a tremendous amount of knowledge about the oil and gas industry, passed down by three generations of experience.
rosenberg: and i’ll bet that in the course of doing your a&a and tax work for oil and gas clients, you see things about their operations that cause you to scratch your head. maybe even some of those times, you feel you can help them with these issues. am i right?
the partners: well, maybe.
rosenberg: then that’s your answer for what to consult in. when you work with these 40 companies, you must constantly observe weaknesses or shortcomings in following best practices. there are tremendous consulting opportunities for you right under your nose!
the partners: silence.
the client spotlight system is simply a process for cpa firms to identify ways to provide additional services that help clients improve their business, increase profitability or both.
- it’s a systemic way to deepen and defend your most important client relationships.
- initial targets include clients
- that may have low nps scores
- that use you only for limited services
- that are highly profitable and/or entrepreneurial
- that have low- to mid-level in-house financial expertise
- spotlight programs are driven by each client’s engagement leader, who could be a partner or manager at your firm.
- cpa firms typically use the spotlight on a small number of larger clients, typically a partner’s 10 to 20 largest clients, on a two- to four-year cycle.
here are some typical projects that cpa firms have identified for their clients:
- recruited a higher-level controller than the ineffective bookkeeper who was in place
- benchmarked key performance indicators and metrics of the client’s operations against those of companies in the same industry and identified areas needing improvement
- made business valuations
- provided strategic planning
- did planning for federal, state and sales taxes
- provided succession and estate planning
- did personal financial planning
- created pro-forma financial statements for various reasons, perhaps to measure the profitability of certain parts of the business that were previously lumped with others
- provided wealth management
the spotlight program is a way for cpa firms to educate clients on their capabilities. most clients are not aware of all the services that their cpa firm provides beyond those already being performed.
a survey by hinge incorporated showed:
- 70 percent of clients were unaware of all the services the firm offered.
- 80 percent of clients said they wished their firm offered services that were in fact already available from that firm.
the spotlight program is a great way to address this issue and, at the same time, help the client improve their company.
the spotlight program is a great time management tool. time management may be the most critical factor that determines the success and profitability of a cpa firm. cpa firm partners are very busy people, with multiple priorities to juggle and stressful deadlines to meet. as a result, it’s difficult for partners to find the time to sit back and think about how they can better serve their clients. the spotlight program helps partners manage their time so that they take great care of their best clients.
here is how the spotlight program works:
- do your pre-work. go through your client file and list areas where there is potential to provide additional value.
- convene a meeting of the entire engagement team for a client. this (a) taps into the collective ideas and observations of all team members and (b) trains less experienced team members how to think like consultants and identify cross-selling opportunities.
- pull an appropriate industry profile from sources such as dun & bradstreet first research to see how the company is described.
- run a benchmarking analysis of the company from a source like profitcents by sageworks.
- summarize one-time projects you have done for the client in the past 12-18 months.
- complete the spotlight program form. a copy is reproduced below.
- based on the team’s knowledge of the client from working with the company, together with the results of #2 through #5 above, identify ways that the firm can help the client improve operations and increase profitability.
- prepare a letter to the client, summarizing the different ways the firm can improve the client’s business and briefly explaining what the cpa firm proposes to do. note that some of the recommendations aren’t services a cpa firm provides and they may be performed by a third party such as a lawyer or banker.
- mail the letter. at the same time, call the client and alert him or her that the letter is coming, thus creating a sense of anticipation.
- a few days after the client receives the letter, schedule a face-to-face meeting to review it. during that meeting, prioritize each item in the spotlight letter:
- a – do it now.
- b – do it next.
- c – do it later.
- x – forget it.
- ideally, you will be asked to issue a 24-month proposal to perform the a and b items.
the client spotlight program can have these benefits:
- it deepens your engagement with the client, thus increasing nps.
- it lets you cross-sell services.
- it encourages clients to develop sound working relationships with other members of your firm. if the lead partner should suddenly leave the firm, clients will stay because they value the other relationships.
- it trains staff how to think like consultants and entrepreneurs.
- it creates references that can be given to future clients.
- it reduces fee sensitivity.
anticipate and prepare for major objections to your spotlight proposal
client: am i paying for this?
cpa: our meeting to present the recommendations to you is not billable. because you’re one of our key clients, we wanted to be proactive in making recommendations that will make your company more successful and profitable. please understand that you are under no obligation to do anything.
client: i’m on to you. you’re just trying to sell me more services.
cpa: this isn’t about sales. it’s about us advising you. you are one of our best clients. we are not so naïve as to believe that our competitors aren’t calling on you. we want to be proactive and suggest ways to improve your business that we think are worthy of discussion. note that some of our recommendations are for services we don’t do. in these cases, we want to introduce you to other highly skilled professionals who can do a great job for you. but please understand, you are under no obligation to do anything.
spotlight leader advanced preparation form
client name date
partner in charge
client’s law firm, attorney name and contact information
____________________________________________________________________________
client’s bank, banker name and contact information
____________________________________________________________________________
other advisors
____________________________________________________________________________
list services provided on an annual/ongoing basis:
____________________________________________________________________________
list all special services or projects completed in the past 18 months:
____________________________________________________________________________
describe client’s current growth rate: [ ] rapid [ ] moderate [ ] flat
explain why.
____________________________________________________________________________
describe the greatest challenges facing the client:
__________________________________________________________________________
describe any service issues, complaints or concerns raised by the client during the previous year:
__________________________________________________________________________
list any other comments or concerns regarding this client:
__________________________________________________________________________
expanded services
a word about cross-selling
this is very important. cross-selling has unfortunately acquired an unsavory connotation, not too different from the car salesman trying to sell options that aren’t wanted or needed. the enron/andersen fiasco of 2001 sadly aggravated this.
polls have, for decades, consistently shown cpas to be at or near the top of the integrity scale compared to other professions. we discuss cross-selling only in the context of cpas offering services they truly believe will add value for their clients. no respectable cpa firm would ever sell services that clients don’t need just to make a buck. cross-selling should always be a win-win situation.
the larry adler method of mining your existing client base
until his recent retirement, larry was one of my oldest and dearest clients. he always had a smile on his face and was a skilled rainmaker.
i first met larry when he joined my chicago-area managing partner roundtable group 20 years ago. at one meeting, the group discussed marketing and practice development. the mps began sharing their firms’ techniques for bringing business. larry chimed in by telling us about his “memo pad” system.
larry always kept a memo pad next to his telephone. the top sheet of the pad listed several of his major clients and several referral sources. these names were handpicked not only because they were his biggest and/or best clients but also because of the relatively high probability of getting more work if he called them. most days (all of which were super-busy), larry would make it a point to call several names on the list and make a breakfast or lunch appointment. doing this enabled him to have a business development meeting most days during the week. how simple. how powerful!
the moral of the story is this: there is no better way to get more business from your existing clients than by … asking for it. spending time with them. calling them before they call you. meeting with them because you haven’t seen them for a while – and not charging for the meeting.
focus on your best clients
the following is excerpted from a may 2017 article that appeared in 卡塔尔世界杯常规比赛时间, written by bill reeb and dominic cingoranelli of the succession institute.
once again, i’ll assert the importance of time management. there is only so much time in the day of a busy cpa for business development. therefore, it makes sense to focus one’s practice development time in the areas most likely to result in new business. one way to do this is to focus on a and b clients, as defined by reeb and cingoranelli.
“an a client is often defined as one of the 15% to 20% of the clients making up 70% to 80% of the firm’s revenues. an a client is one:
- who you are probably adequately serving
- who will continually have new projects for you
- who generates sizable revenues for your firm
“a b client is one you are right now most likely underserving, but who has an opportunity to generate sizable revenues for your firm. a b client is one you can easily:
- provide thousands of dollars more in needed services
- help them grow
- create stronger loyalty to, and satisfaction with, your firm.”
c and d clients are simply those who are not a and b clients. they are characterized by
- small revenue potential; few cross-selling opportunities
- often not pleasant to work with
- frequently ask for special accommodations
- pay your bills late
- complain about fees; lower realization
marketing during the tax season
there are two ways to look at marketing during the tax season:
- when are with your clients the most? the tax season. so it makes sense to carve out some time during this busy period to discuss ways that your firm can further help your clients. strike while the iron is hot.
- are you nuts?! i’m already working 80 hours a week for three long, grueling months. there is no way i’m going to expand my workweek further by doing extra work during tax season.
my late mother always said this in situations where there are choices: “that’s why there’s chocolate and vanilla.” we are supremely confident you’ll make the correct choice!
mine the goldmine in your backyard by wowing the socks off your existing client base
everyone wants to be treated as special. this is certainly true for your best clients. here are some time-tested ways to create the “oh wow” response from your clients:
- make frequent contact, even when there is no work.
- exceed clients’ expectations.
- put money in your clients’ pockets by giving them suggestions for improving their business and increasing profitability.
- ask clients how you can do a better job.
- refer your clients to others who can help them.
- deliver services before clients expect it.
- when working on client projects, give frequent updates and status reports.
- initiate calls to clients instead of making them always be the ones who call you.
- never spring fee surprises on clients.
- learn your clients’ industries.
- keep clients informed of external events that may affect them.
- send them holiday and birthday cards.
- recognize clients’ accomplishments, honors and awards.
- entertain your clients.
- send them articles of interest you read.