At our PANALITIX Annual Conference in November, we were privileged to welcome Chip Conley, Strategic Advisor to AirBNB, as one of our speakers. During his speech, Chip talked about businesses that are at risk of disruption. He identified businesses with the following characteristics as being high risk:
- They have grown complacent because of past successes
- They have lost touch with their customers' evolving needs
- They fail to imagine a new set of customers
- They don't take new competitors seriously
- They have no clue what the true essence of their product offering is.
As we reflect on these ‘risk points’, it’s pretty apparent that Chip could have been describing the accounting profession directly. Let’s consider why we believe that to be the case:
- It’s our experience that most accounting firms benefit from an extraordinary amount of recurring revenue. In a typical firm, you could ‘bank’ at least 80% of last year’s revenue again this year because you know it’s just going to come back without you having to do a thing. That breeds serious complacency
- Technology has evolved to the point where accountants hardly need to talk with clients any more. How can you be in touch with clients’ changing needs if you’re not face to face with them talking about their pressing issues?
- Many accountants tell us that they take on all comers and few have a clearly defined set of client selection criteria. Even those that do rarely revisit them to test their current relevance. It’s one thing to have an idea of what your ideal client is today, but it’s quite another to visualize your ideal client in five years’ time. Matthew Le Merle, one of our other excellent speakers, encouraged the delegates at the conference to target clients that are in a position to embrace technology and then network with partners who can help you deliver. That’s one very interesting view of the future of accounting that few firms are considering
- During a panel discussion, one of the youngest partners in attendance described how he and his equally young partner were changing the face of accounting in their neighbourhood by focusing squarely on client results, setting the bar high with internal challenges for how much value they could create for clients and then publishing those results live via social media. It’s our bet that many established firms in their market look down their noses with disdain at this ‘upstart’ firm. They might change their view when clients start to defect
- What business are you really in? If you can’t answer that question succinctly, you probably don’t understand the true essence of your product offering. Why do clients choose YOU and not one of your competitors? What is it that makes them come back? What are they telling their colleagues about you and the work that you do?
Many of these issues can be addressed by creating a sales culture in your firm. When we started coaching accountants in 2005, one of the key metrics we insisted our clients track was the number of sales meetings held each month. It’s usually way too low. (Incidentally, if you don’t like the word ‘sales’, try ‘nurture meetings.’) Only by proactively visiting clients, showing a keen interest in their current condition and their goals for the future and then designing products and services to help them achieve those goals can you truly say that you are in touch with your client base and designing your firm so that it remains relevant.
We then found that tracking sales meetings was not as simple as it appeared as a surprisingly small number of firms had anything resembling a sales pipeline that could offer a simple view of each opportunity being developed, the likely fee for new work, the next steps in the process and the person in charge. At one end of the scale, there was no system at all; at the other end, some firms had overly complex systems that were difficult to use and couldn’t report on the important data. (If you have either of these problems in your firm, you might enjoy our SalesPipeline technology solution (LINK).)
Once you have a system to track opportunities, accountability needs to be put in place to drive implementation. In most firms, the partners constitute the sales team (with some training and careful management, this can be changed.) We all know that partners are busy people and it’s human nature for ‘difficult’ things to slip down the priority list. If you a serious about introducing a sales culture that is driven by client needs, you may need some accountability (either internal or external). Some firms find that a standing phone hook up first thing in the morning for just five minutes where each ‘sales person’ details just one thing they will do that day to move an opportunity forward can help keep the pipeline moving.
So what are you waiting for? Take the first steps to future-proofing your accounting firm by committing to more sales activity and implementing the systems you need to make it happen.
ABOUT THE AUTHOR
Director & 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 since invested over 20 years helping business owners to improve their businesses with a focus on attracting new clients, better managing existing clients, developing new products, building an engaged team and strengthening internal business processes.