plus nine metrics to measure.
by martin bissett
passport to partnership
like it or not, the 21st-century accountant is in the relationship-building business.
when a qualified accountant learns the art of developing those relationships in such a way as they empower the practice to be able to forecast its new fee income each year, the accountant becomes a profit center and their value to the firm increases tenfold.
more: tell the world your worth | don’t overlook internal communication | four reasons people struggle with communication | why firm culture matters for partners | competence is step one of seven | three things that rich accountants do | make your expertise a new-client magnet
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our fourth “c,” conversion, has flirted with being the top answer from respondents in the passport to partnership study and has featured in over 80 percent of all firms interviewed as to what makes a senior manager stand out as a potential partner.
it will come as no surprise then that the ongoing mastery of this discipline of proactively winning referred and non-referred new fees should be right up there with developing technical skills in a senior manager’s personal development priorities.
because “selling” (the real name for business development) is still carrying somewhat of a stigma from the cultural traditions of the profession, it is typical to find a manager in a firm who has spent
- three to five years training to obtain their qualifications,
- a career’s worth of experience honing their technical skills and yet
- less than 12 hours in their entire career working on how to proactively win new work.
if i were to spend 12 hours with you and benefit from all your experience and technical knowhow, realistically, how capable an accountant would i be at the end of it?
that’s what i thought.
smart business development eliminates wasted time.
it could be argued that this skill gap is a direct consequence of what happens when entire generations have been able to build their firms on referral/recurring work alone. what chance then has a senior manager whose role will be heavily weighted toward the business development tasks that await a 21st-century partner in feeling confident about their abilities to perform in that aspect of partnership? who will they learn from?
this concern was the second-highest in the feedback that came from the partner hopefuls, who felt their lack of knowledge in how to win new work from non-referred sources would harm both their chances of obtaining their “passport to partnership” and their ability to “go places” as a result.
when many existing partners surveyed look to their pipeline of prospective partners, they see famine rather than feast but yet carry out no internal marketing “irrigation” in order to ripen their potential harvest. in turn, managers are often told that in order to make partner, they need to introduce anywhere from $50,000+ of new fees and managers have expressed bewilderment as to how to go about achieving that.
the main faux pas when trying to win new fees
- giving away answers
- emailing proposals
- chasing by phone
- lowballing fees
- selling services rather than outcomes
- not asking for the business
- waiting for books and records
as technology and outsourcing abroad continually erode the compliance foundations of a traditional practice (walmart tax returns anyone?), the increasing value to our clients will be our advisory services. we’ve seen – and will continue to see – firms amplify this element of their service but as everyone starts to amplify their advisory expertise, how will we get heard?
it will become the same scenario as choosing on compliance services alone is now, namely …
- how much do they cost?
- are they local?
- do i like them?
as advisory services become the norm in terms of the value that an accounting practice offers, how will we differentiate? the answer is in our ability to sell professionally. how much of a need, therefore, does our next generation of partners have to develop the skills that their training, to date, has yet to cover?
let’s get some cpe – control of prospects’ expectations.
how much chargeable time, if it were to be calculated, is spent
- on the phone trying to chase up a previous meeting,
- trying to get an initial meeting,
- on letters and emails,
- on writing proposal documents that aren’t actually wanted
- and so on?
for the sake of argument, let’s say you see 20 new non-referred (you should be converting nearly all of those that are referred) prospects in a calendar year. let’s say that we’d like to have another meeting with 10 of those. let’s say that we spend an hour writing, calling, and emailing each one before we give up when we get no response. what is your charge-out rate per hour? $250? $300? more?
so $250 x 10 prospects is a low-end first year’s fee wasted and we all know that my very basic calculation omits many other associated costs. the real investment is in acquiring this work is much higher.
prospective clients are businesses like any other, having to make decisions each day like any other. why should the decision whether to meet with you again/employ your firm or not be any different? why should we have to chase and wait for a response indefinitely, not knowing whether we are pestering them or not?
it is possible and is proven in firms worldwide that we can obtain decisions from clients regarding additional services, prospective clients regarding engaging us and so on, without prolonged wild goose chases.
which business development metrics should i measure?
while not all of these may be relevant and applicable, in your department or personally, how many of the following have you had this month/year?
- new clients acquired this year that have both said yes and completed the requisite paperwork.
- prospective clients with whom you have a date set in the diary to receive their decision on whether to come on board with you.
- prospective clients who attend your events and their most recent conversations with you.
- new business appointments that you’ve attended this month/year.
- other appointments you’ve attended that could progress into fees being realized.
- prospective clients who didn’t reach a decision in years gone by and their progress toward becoming a client.
- referrals asked for, received, and contacted.
- businesses identified as being desirable clients.
- conversations were held with ex-clients who moved from you because they thought the grass was greener, who might be open to discussing a return to your firm.
if you’re doing nothing more than actively measuring the above, you’re ahead of around 85 percent of your competitors.
what measures do you apply in your firm? could any of the above provide additional support in achieving the growth goals both you and the firm have?