How do Accountants sell more advisory services?
This is a question we get asked a lot… and the answer can be more complicated than it appears.
For starters, WHY would Accountants WANT TO sell more advisory services?
There could be good reasons like:
- They find advisory work fun and rewarding, perhaps because they get to work more deeply with clients who value their support.
- They want to be more profitable. Ordinarily, a value-added (advisory) service should attract a higher hourly rate.
- Advisory services will help retain clients who may choose a different firm if they think that firm offers valuable advisory services.
There are also some not-so-good reasons such as “compliance is dying”.
Yes, you can read something every day about the supposed demise of compliance, but we don’t agree. In fact, we believe a well-run compliance-only business can provide a good income for owners… for minimal effort. And that’s not about to change soon. (Note, it’s no surprise that the compliance naysayers are often selling something to ease your path to Advisory nirvana).
Keep in mind also that many Accountants who sell advisory services build businesses which are dependent on them. Simply put, they are unable to delegate the selling and delivery of their advisory work.
And while their businesses become more PROFITABLE, they are not necessarily more VALUABLE. The market tends to value ‘recurring revenues’ and a lot of advisory work is ‘project based’ or ad hoc in nature.
Another Elephant in the Room
There’s another ‘elephant in the room’. Many competent Accountants find they are simply not good at providing advisory services. How can this be the case? After all, Accountants are skilled, well-trained, and have access to large amounts of client data.
The answer lies in the definition of ‘advice’ which includes a range of complex skills like understanding and establishing goals, motives, and plans, tracking progress, flexibility to change course, sensitivity to business conditions, relationship building, patience, offering guidance, communication skills, and mentorship. These skills need to be channeled into making a positive difference for the client. Without that, what’s the value of any ‘advice’?
It is not obvious that every Accountant will easily acquire these skills. Why should they? By analogy, most General Practitioners don’t go on to be surgeons and if they do, they need to invest in acquiring a whole range of additional skills over many years.
Enter the many vendors of (mostly software) ‘tools’ who claim to ‘automate’ or substitute (some of) the above-mentioned skills. These tools can certainly play an important role, but a true advisor needs to… well… advise. Otherwise, you are selling a ‘solution’ or ‘system’ (which can also be a plausible business model).
The Pathway to Advisory
Let’s be clear that building an advisory business can be a brilliant evolution for some Accountants. But it’s not for everyone. If you’re satisfied that offering Advisory services is right for you, here are some additional questions to consider.
What does ‘Advisory’ even mean in your world?
There are so many definitions of Advisory including ‘anything that is not compliance’. What really matters is that YOUR definition of Advisory involves something at which YOU can excel. Something in which you have UNIQUE EXPERTISE. You need to be crystal clear on what this is and avoid throwing together a list of value-add services you think might appeal to a broad range of clients. That’s how you get lost in the crowd. The more specific and differentiated your definition, the better.
Do your Clients need what you want to offer?
Having unique expertise is not enough. There needs to be a genuine benefit your clients derive from accessing your services. This is usually learned by observing your clients and crafting solutions which are meaningful to them. These solutions can become your Advisory ‘products’.
How will you present / communicate / market your Advisory products?
You’ll need to inform your EXISTING clients of the value you can provide while also attracting NEW clients. That means building credibility, demonstrating your expertise, and providing case studies / testimonials to show your track record. This is best done through distinguished marketing ‘content’ distributed through the channels that are sure to reach your Target Client.
You should engage in ‘traditional’ marketing (like networking) and amplify your message through digital marketing, that is, leveraging search engines like Google to generate leads efficiently.
All of this requires a long-term view. Your target clients may not be ready for your service now, but they should immediately seek you out when they are ready. And when you attract those leads, you need the sales processes and capacity to ensure leads are not wasted. Successful firms often invest around 5% of their revenue in marketing programs.
Don’t get caught up in the ‘advisory hype’. Better to think carefully about what you want your business to look like in 1, 3 or 5 years, for example, in terms of revenue, profit, number of clients, your role / productivity, average hourly rates, business value, etc. That will help you set the strategy and consider if / how advisory services fit within that strategy.
If you need help, working through your options, please get in touch!