also: the 8 steps of a nurture campaign.
by marc rosenberg
the rosenberg practice management library
there are three sources of new business:
- existing clients, in the form of expanded services and referrals to other clients.
- referral sources such as lawyers and bankers.
- prospective clients.
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we further state the following, based on countless experiences and conversations with cpa firms:
- the time you spend prospecting for new clients should be roughly 15 percent of your time. the bulk of your time should focus on existing clients and referral sources.
- you can expect that roughly 10 percent of your growth will come from new clients. the bulk will come from existing clients and referral sources.
the lower success rate anticipated from prospecting for new clients partially explains why firms have such a huge appetite for merging with smaller firms. it’s often easier and less costly to acquire clients than prospect for them from scratch.
given this less-than-rosy introduction to the strategy of prospecting for new clients, why you may decide to back-burner your efforts to find new clients. but some firms enjoy a fair amount of success with prospecting.
less is more: the impact of nurture marketing
would you rather be sold to or courted? most people clearly prefer the latter. successful practitioners know clients do not break their relationship with their professional service providers on a whim. therefore, cpa firms committed to growth must invest in practice development strategies built for the long haul.
for firms wishing to attract new clients, a great tactic is a nurture campaign, a systematic approach that combines targeting prospects, using direct mail and contacting prospects.
developing relationships with prospective clients requires a systematic approach:
- create name awareness so that when you do contact a prospect, they know who you are.
- make a good first impression.
- develop professional rapport.
- gain permission to keep in touch.
- demonstrate sincerity and a willingness to invest long term.
- demonstrate thought leadership and provide a higher level of service than they are used to.
there are two types of nurture campaigns to consider. firms can do one or both.
- niche-oriented
- general
a niche-oriented campaign is the most effective way to go because clients are more likely to hire someone they perceive as an expert in their business. but many cpa firms, especially those under $10 million, don’t have an established niche or specialty. in these cases, the firm has no choice but to execute a general campaign.
whether general or niche-oriented, a nurture campaign builds slowly and courts targeted prospects systematically. the campaign lasts several months and is designed to gradually build deep relationships with prospects, who eventually become clients. at some level, the success of the nurture campaign will be measured by the number of proposals you don’t make because when the prospect is ready to make a move, his or her instinct will be to call you.
how a nurture campaign works
- decide if you want to do a general or niche-oriented campaign, or both.
- develop a database of prospective clients. the list should include at least 50 names.
- engage a company to assist you in making phone calls and sending correspondence to the prospects.
- call each prospect to verify their contact information, especially a name and mailing address. you don’t want to send direct mail materials to a company. they must be sent to a person.
- after verifying the data, send the prospect a mailer and/or a gift.
- make the first follow-up phone call. at least four solid attempts should be made to reach each contact.
- for those contacts who respond, schedule a meeting with a key person at the firm, usually a partner.
- for those contacts who don’t respond to the phone calls or respond but don’t wish to schedule a meeting:
- send them a letter stating that you have tried to contact them and will keep in touch with periodic correspondence and phone calls.
- 45 days later, send them another written piece of nurture correspondence, usually an article or a media release.
- 45 days after that, send them another written piece of nurture correspondence.
- 10 days after the last letter, call the contacts. ask if he or she received the previous correspondence. ask what their needs are and attempt to schedule a meeting.
pipelines
this is an excerpt from a great article, “bring cohesion, purpose and direction to business development,” which appeared in the june 2018 edition of inside public accounting.
tracking business opportunities through a disciplined pipeline process keeps prospective new clients at the top of partners’ minds and to-do lists. the result is increased sales through organization, collaboration and positive peer pressure. pipelines can also help firm leaders predict future revenue, while constantly learning the most effective sales approaches and the time it normally takes to tum a prospect into a client.
inside public accounting (ipa) analyzed data gathered in 2017 from 153 firms. of those firms, 58 percent track revenue in a pipeline, and one firm in 10 generates more than 15 percent of its annual revenue through projects in the pipeline.
a pipeline, in its basic form, is a snapshot of prospects, the names of the partner or manager in your firm assigned to each one, the activities associated with wooing that potential client, progress and results. pipelines can be back-of-envelope notations, excel spreadsheets or formal dashboards displayed in a customer relationship management (crm) system.
two mps shared with ipa what works for their firms.
savannah, ga.-based hancock askew & co. (fy i7 net revenue of $14.5 million) has recently experienced an enviable annual organic growth rate of 23.6 percent. carlos garcia, omp of their miami office, says the firm has been using a pipeline process for less than 10 years and it has gone through multiple iterations as it’s grown. what started as an excel spreadsheet is now a dashboard in a crm system.
the marketing department leads the monthly meetings. the meetings fulfill several purposes, he says. one is to share experiences and learn from one another to best manage the opportunities. exchanging stories about contacts with potential clients and involvement in community activities is an informal training exercise, garcia says, particularly for those on the path to partnership who need to learn business development skills.
winning strategies are documented in addition to information on why the firm did not win proposals. these lost clients are asked about their reasons for selecting another firm. “it’s just as important for us to know why we didn’t get something as it is to know why we did,” garcia says.
attendees estimate how far along each potential client is in the sales process by percentage.
“if it’s 75 percent, we’re feeling pretty good about it,” garcia says. it’s more than exchanging business cards or having lunch. the percentages are aggregated by practice area and by industry. updates are recorded, new prospects are added to the pipeline and notes are written on a whiteboard.
the visual reminders, regular discussions and team approach prevent the “out of sight, out of mind” effect. “for me, it reminds me every time i look up that it’s been three weeks since i followed up with joe, for example,” he says. “i’d better follow up with joe.”
the pipeline meetings have sparked more activity among firm professionals. “their mindset in terms of marketing has increased tremendously in the last six months.”
when asked for advice for partners interested in implementing a pipeline process, garcia says the firm needs a strong leader to guide the process (can you say “marketing champion”?), someone who will pull together the information, nudge professionals to move prospects along and make sure everyone is engaged in the process. “if it becomes stale, and doesn’t move, it’ll die.”
garcia notes that firms should start somewhere, and excel will suffice at first. managing a pipeline is time-consuming, but time well spent. “you’re going to be more active in the marketplace, no doubt.”
charles mullen, mp of akron, ohio-based apple growth partners (fy17 revenue of $13.1 million), says a big plus of a pipeline is avoiding duplication and inefficiency. two professionals could be chasing the same prospect without knowing it, so the regular pipeline meetings ensure “the right hand knows what the left hand is doing,” he says.
meetings are held every two months for 90 minutes. pipelines have been in use for about two years there, and principals and managers together review prospects, referral sources and activities, matching the professional with the strongest connection to the prospect in order to nurture the relationship.
mullen and the marketing director lead the meetings, in which a spreadsheet is displayed on a large screen, driving the conversation about who is doing what. the pipeline also includes an aging schedule, which keeps everyone accountable. “if we’re going over and over the same one, we ask what’s happening.”
mullen, like garcia, also views pipeline management as a learning tool for up-and-coming personnel who are expected to bring in about $50,000 in recurring revenue every year.
mullen advises new pipeline users to add a layer of accountability by creating written task lists that are reviewed at every meeting. he also says a common pitfall to pipeline management is excessive optimism about the potential of prospects to hire the firm, which can skew revenue estimates. “take a realistic approach on the status of the prospects and the annual dollars.”
mullen is convinced that managing opportunities through a pipeline brings in more business. “part of it is the dialogue. it forces the conversation – that’s the most valuable part of it.”