To gain true buy-in from your client, you must engage them in the discovery process. Because you understand numbers, the answer to the client’s growth conundrum could well be obvious to you. But to optimize the outcome, resist the temptation to jump straight to that answer. With my baker, some cursory analysis before we met with the client indicated strongly where the answer would be. I am convinced that had I simply TOLD the client that he needed to focus on average transaction value, the result would have been very different. You see, when clients discover for themselves, they are engaged.
Let me give you an example. Imagine you are sitting with a client and you determine that the current average transaction value is $250. There are two ways to move the conversation forward from there. Firstly, what I am going to suggest is the wrong way:
‘Graham, let’s increase that to $270 and see what the impact is.’
The problem is that this is your number, not the client’s. They will rarely argue with the number but they will not buy into it. Here’s an alternative – and, I suggest, much more effective – approach:
YOU: ‘Graham, if we got really focused on improving that number, what do you think you might be able to increase it to?’
GRAHAM: ‘We could probably get that up to $300.’
YOU: ‘What if it was just half of that – say $275. Do you think you could achieve that?’
GRAHAM: ‘Absolutely. Let’s go with that.’
There is a huge difference between these two approaches. In the first example, the $270 was your number and the client’s response, whether expressed or not, is doubt as to whether it can be achieved. In the second example, the client ‘owns’ the $275 and, in fact, feels it is a conservative target because he originally suggested $300.
This is not trickery. I have found that it pays to be conservative when setting targets for three reasons:
In our work with Accountants, we set targets for rolling 90-day periods. We have learnt from experience that we must let our members (the Accountants) set their own targets. We are often asked for guidance as to what the target should be but other than encouraging the member to be bold and aim high, we pull back from suggesting a number. The primary reason for this is accountability. If I set the target for the member, the member has an excuse if it is not achieved – ‘that was your target; I never believed we could achieve it.’ But if you set the target, you have no excuses and the accountability to the achievement of the target is much stronger.
Some Accountants have found that if using software or a spreadsheet to demonstrate the profit improvement potential, even more engagement can be gained by having the client type in the target for each variable themselves. This is a matter of style – you might find this gimmicky and feel uncomfortable. I have to admit it is not my cup of tea. I have, however, heard stories of clients leaning in and examining the computer screen in disbelief as they enter their targets, so I would have to suggest that if you are comfortable with that sort of methodology, you could well find it adds to the engagement process.
At all stages of the client meeting, look for opportunities to let the client discover things that they did not previously know. If you have industry benchmarking data available, use that to prompt the client’s thinking. For example, an important component of any profit improvement discussion is gross profit margin. If your client’s margin is, say, 62% and you are able to demonstrate that the industry benchmark is 66%, I suggest you show the benchmark to the client. But rather than entering 66% as the new target, ask the client where they would like to be relative to the benchmark. It’s my experience that most clients will want to target the benchmark and some will want to surpass it. Again, although you are likely to end up with 66% in the target field, having the client suggest the number is very different from you simply typing it in.
Before a client will invest in your services to assist in a business improvement project, they need to trust you in that field of expertise. As previously mentioned, they already trust you to do their tax and accounts but if that is all you have ever done for them, you need to upgrade their trust to a new level. If they feel you are forcing unrealistic targets down their throat, they will recoil. Give them the opportunity to use numbers that they feel are both realistic and achievable and you will find the trust builds much more quickly. And once a client trusts you AND gets excited about the potential, you have a project.
It is important to realize that not every business is the same. Most businesses will fit into one of three revenue models:
Sometimes you might come across a client who steadfastly believes his or her business does not fit into any of these models – and they might be right. I recall working with a client specialising in high value one-off construction jobs. We attempted to fit their numbers into the ‘jobbing’ scenario above but the real issue was capacity to take on more projects. They were only doing five or six a year and simply could not take on any more under their current structure. When you are faced with this sort of scenario, resist the temptation to fight the client and fit a square peg into a round hole. The client will never ‘buy in’ to the numbers if they believe you have forced them into a position they don’t agree with. Simply have a quality conversation about the client’s objectives and take it from there. (In this case, the owner wanted to extricate himself from the operational side of the business so we worked with him to systematize some processes, enabling him to free up 20% of time and take a vacation.)
About the Author
Colin DunnDirector & Co-founder at PANALITIX
Colin is a Chartered Accountant who, having spent almost 10 years with one of the fastest growing and most innovative firms in the UK, has spent the last 19 years working exclusively with the Accounting profession with a focus on helping them implement business advisory services with their clients. He is passionate about helping turn Accounting practices into Accounting businesses and holds a Bachelor of Arts (Hons) and is a qualified ACA. Colin is relentless in the pursuit of improving the performance of every firm he coaches.
Colin is the brains behind ENGAGER (previously the PANALITIX app), TRUST and Proactive Success System, PANALITIX’s three cloud applications for Accountants.
He is also a prodigious author and generator of content, primarily in the form of ‘how to’ material to enable Accountants to respond to client needs with value-based services. He is the author of the bestselling book “Accountants: The Natural Trusted Advisors.”