I don’t know much about makeup; the different kinds, who makes it, what it costs, how it’s applied and so on...
But I noticed some charges on my credit card, which lead me to investigate. I narrowed the search down to my 18-year-old daughter and asked about the repeat purchases from Morphe, MAC, and Clinique. She casually explained that these were ‘well within her budget’ and educated me on eyebrow pencils, mascara and “pallets”, (which I previously thought were devices used to lift heavy things in a warehouse)!
Clearly these businesses operate in a highly-competitive market comprising giants such as L’Oréal and Estée Lauder along with new, smaller niche players. It’s hard to stand out, and some make very ‘functional’ claims about their products (the colors, the ingredients and the ‘safety’) while others appeal to the emotions of the buyers (how you ‘feel’ when using their products).
They are certainly experts at getting existing customers to keep buying. There’s a lot of strategy behind their (customized) offers and promotions - and it seems to be working, at least in our household!!
How can accountants learn from their techniques? Here are some things to consider:
- Know your customer: While cosmetics businesses are deeply interested in age, gender, location, payment-method and so on, accountants possess enormous amounts of data on clients. Analyzing this data can establish the ‘needs’ of clients, even needs they don’t know about. It’s pretty obvious... but a business will have very different needs if it’s growing (or getting smaller), hiring (or laying people off), acquiring assets (or divesting), launching new products (or retiring products), raising capital (or liquidating the business), entering new markets, being exposed to different regulatory environments etc. Take the time to understand your clients so that opportunities can easily be identified.
- Purchase behavior: Related to the above is analyzing what clients have bought from you in the past. For those that have purchased compliance services, perhaps there are other value-added services they need. But each client interaction will probably suggest other opportunities. If you give tax advice related to a proposed transaction, could you help with business structuring, entity formation, due diligence, post transaction integration, system set-up, management reporting, compliance for the acquired entity etc?
- Offers: In professional services, we sometimes say we're ‘above’ promotions such as ‘buy one get one free’. But are we? Why? Intelligently constructed offers do not denigrate our profession and they enable differentiation from our competition.
- Frequency: ‘Always be crossing the desk of your customers’ is good advice. Yes, there’s a balance... but if your offers are relevant and intelligent, your clients will generally appreciate the attention. And they’ll respond.
- Systems: Don’t leave selling to clients to chance. This is not something you do ‘when you have the time’ or ‘when it feels right’. This is an important part of client communication and it determines WHICH clients you reach out to, WHEN you communicate, WHO is responsible and HOW you measure success. There should be nothing haphazard about it.
- Content: Constant requests of ‘please buy from me’ will become tiresome. Providing insights in entertaining and educational ways through various media (text, infographics, video, events etc.) will have more impact. Mix it up. And get help. Cosmetics businesses rely on highly skilled agencies. And it shows.
- Keep It Simple: Remember, your clients know a lot less about your business than you. They probably don’t know about your full range of services, how you price them, the capabilities of your team, success stories with recent clients, etc. You may need to explain things in detail and repeatedly. Don’t assume anything.
- Measure Everything: Like any business endeavor, measure what you do. How many clients did you reach out to? How many times? How many responded? How many business discussions did you have? How much business transpired? Figure out what’s working and do more of that.
- A Numbers Game: As in most sales activities, you’ll probably fail more than you succeed. Don’t be discouraged. You only need a few wins to justify your investment.
- Take a long-term view: Establishing client needs (and purchase decisions) may take a long time, especially in professional services. Plant seeds and manage your conversations with clients in the long term so that you’re ready to move when the time is right.
- Start Somewhere. If this sounds intimidating, try a ‘pilot’ initiative. Take 10 of your clients and resolve to call them up in the next 20 days. That’s 1 call every 2 days. Use email if you prefer.
Check in with them, ask questions and tell them you’d like more work. You may be surprised by the results. And it will be easier to graduate to a fully ‘systematized’ approach. But get started!
ABOUT THE AUTHOR
CHAIRMAN & CEO, PANALITIX
Mark is an entrepreneur who has founded, built and sold a number of businesses, mostly in the information technology industry. His businesses have served major multinational companies in areas including business intelligence, process improvement and procurement across Asia, North America and Europe.
As an investor, Mark focuses on early-stage technology businesses with an interest in SaaS companies and providers of content. Mark lectures in an Executive MBA program on entrepreneurship, mentors numerous businesses and is a frequent speaker in business forums.
ClientInsights helps your business to secure additional revenue by identifying valuable new sales opportunities amongst your clients.
It’s a tool that asks your clients to assess their current and anticipated needs across a broad range of key areas. ClientInsights then reports recommended priority actions for your business and your client to consider, cost and implement.