bonus: an equation for reaching your desired profit level.
by rob nixon
if you are dissatisfied with the performance (personal satisfaction and/or monetary rewards) of your current firm then you will need to change what you are doing. not tweak it a few percentage points in productivity, average hourly rate, write-offs or lockup. no!
more on strategy: do your clients want more? | why ‘steady as she goes’ isn’t enough | the final critical traits: how do your tires look? | how to calculate a value price | boost efficiency and your bottom line | 4 sales systems and some secret sauce | marketing must generate leads | be an ‘object of interest’ | turn your knowledge into products | why clients really stay | don’t let technology make you dumber
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you will need to change what you are doing dramatically if you want a different result. the good news is that the change needed is not that hard to do once you get your motivation and mindset right.
the new equation
if the old equation is internally focused then the new model is externally focused. it is based on marketing, sales, building relationships, value pricing and customer service. this equation below is a mathematical equation which, when you know and adjust the numbers, becomes a very powerful formula.
knowing your new numbers
just like you know your numbers in the old equation you must know your numbers in your new equation. what you can measure you can manage.
- you need to know how many (exactly) existing clients you currently have.
- you need to know how many (exactly) leads you get from each marketing campaign.
- you need to know your conversion rate (exactly) from inquiry to sale.
- you need to know your retention rate (exactly) of existing clients.
- you need to know the average sale value (exactly) of each project.
- you need to know how many projects (exactly) your clients buy from you each year.
what business can exist without knowing the numbers? work out what your numbers are, and then you can apply strategy to improve each one of them. after your analysis your numbers might look something like this:
your brand
before we break the equation down into bite-size bits you need to determine what makes you unique and different. are you in the “sea of sameness” like every other accounting firm or are you different? what is your unique position in your marketplace? do you want to be different? do you want to stand out?
once you answer these questions (hopefully positively insofar as you want to be unique) you can get on and position your firm in any way you choose. as my team and i coach, visit and observe firms we notice that their “brand” is often tired and, to put it bluntly, boring. the firm’s website (if they have one) was created some years ago and the partners’ photographs do not represent what they look like now. your new client might not say it but they may think it … “hmmm, you seem to have less hair now and you look like you are larger around your middle than you are on your website.”
the colors are often bland and there is no modern style to anything. i went into a firm one day and they showed me their letterhead. i asked, “why is it in black and white?” answer: “so we can print right out of the printer – it saves on printing costs.” you can’t make this up. your brand is every aspect of your firm – from the way you dress, to your building, to your colors, your collateral, your work, your style and even your furniture.
tired, traditional, cheap and boring – that’s what most firms’ “brand” looks like.
it’s time for a brand makeover. employ a branding consultant to do a complete overhaul of the entire “look and feel” of the firm.
this is all called positioning: how you are positioned in the marketplace before or while i do business with you. here is a checklist of positioning tactics (many cost zero money) that you can apply so you are positioned differently from what you are now:
- high prices
- articles
- media releases
- e-newsletters
- website, blog, social media
- testimonials and case studies
- free reports, tools, videos and audio
- speeches – paid and free
- other people’s newsletters
- reference list of existing clients
- competitions and awards ceremonies
- being controversial
there are many ways to be positioned differently. implement something.