Accountants Advising Clients on Sales? Why not? It’s all about the data!!

Many accountants want to grow their advisory practices. So they dig deep into THEIR AREAS OF COMFORT around cash flow forecasts, tax mitigation, reviewing financial reports and so on. Sometimes it works and sometimes it doesn’t… It really depends on the client. There is a much greater chance of success if we focus more on CLIENTS’ BUSINESS CHALLENGES (than our own areas of expertise). One common business challenge is growing sales. How many of your clients would like to grow their sales? How many find it easy? What if you could help them grow their sales? And grow your advisory practice at the same time. Here’s a starting point: a series of questions related to sales to ask your client:

1) How many leads (or business opportunities) did you generate last year?

Hopefully they can answer this. Do they understand what a lead is exactly? Could you help them define and quantify this?

Let’s say the number is 100.

No. of leads generated in the past fiscal year 100

2.) What was the source of these leads?

Were they from referrals? Cold calling? People met at events? Inbound calls? Other sources? Let’s say 20 came from referrals and 80 were met at industry events.

3.) How many of these leads were converted to sales? (And what was the associated dollar value?)

Let’s say 20 deals closed, realising $100,000, implying a sales conversion rate of 20%. Does this vary by product? Perhaps product A enjoyed a sales conversion rate of 25% but product B achieved a 15% conversion rate. Our data set is growing as follows:

4) What was the average lead time per sale?

That means how long it takes (on average) from the moment an opportunity is identified to the time of closing the deal. Generally your clients will underestimate this period. Maybe the overall average is 60 days but Product A takes 30 days to close but product B takes 90 days to close. More data:

We could go on… but even with this simple data set, you can provide guidance to your client without being an expert in sales.

Some simple opportunities:  

1) If the client doesn’t have the above data, you should get it for them. And ensure it is available on a periodic basis. Advisory Opportunity 1

2) So 100 leads generated $100,000 in sales. Surely more leads would generate more sales? But you should figure out the cost of a lead. If they each cost $100 for a total investment of (100 leads x $100) = $10,000, there is a ten times return on investment. Advisory Opportunity 2

3) Ask the client if the sales conversion rate can be improved? How? Better process? Better personnel? Better use of technology? What if sales conversion could increase from 20% to 30%? That implies new revenue of $150,000 ($50,000 more than the current levels). But what would this cost? An investment of $25,000 in sales effectiveness would realise a 100% return. Figure this out based on what your client tells you. Advisory Opportunity 3

4) Perform the above analysis for the different product groups which may be performing at very different rates. Advisory Opportunity 4

And we’re just getting started!! Some tips to remember:

1) Find the clients who value growth through new sales. They won’t need much persuading to go down this path with you.

2) Don’t bite off more than you can chew at first. Remember: going from ‘nothing’ to ‘something’ is good progress and you can expand the analysis as you learn more.

3) This should be updated at least quarterly. Set regular meetings to review progress with clients.

4) Repeat this with multiple clients. Make it part of your service offering. There is enormous potential for the accountant who can understand and improve the mechanics of sales based on data.

5) Use GrowthEquation, a proprietary Panalitix product which makes this process dead easy!