Marketing and business development are top priorities for CPA firms recently surveyed by Sageworks. In this post, Lauren Prosser, director of ProfitCents Professional Services, explains how to improve these key strategic areas.
By Lauren Prosser
Previously, I described how a recent survey of CPA firms by Sageworks’ ProfitCents Professional Services identified marketing and business development as among the most important management issues facing these establishments. CPA firms ranked these two areas of focus higher in importance than either pricing, compensation of firm members or client service plans.
Developing new business and marketing your firm effectively go hand in hand. But before you can market your firm effectively in order to develop new business, it’s critical to answer these questions:
1. What truly sets you apart from your competitors? To answer this, consider what makes your firm an indispensable part of the client's success.
2. Who is your target audience and why? To answer this, consider this group's needs and motivators. What skill sets, expertise and resources at the firm position you uniquely to serve those needs?
Unfortunately, many firms don’t really have a clear idea of what separates them from competitors. In fact, if you answered the first question by saying “A solid reputation within my community,” you’re not alone. A recent Accounting Pulse poll by online accounting community iShade received that answer from every single respondent when it asked, “What makes your firm different from competitors?”
Clearly, your point of differentiation cannot be the same as all of your competitors, so give some thought to the answer. You must be able to tell a personal and relevant story that illustrates why your firm is truly and uniquely positioned to serve the needs of prospective clients. Answering the questions about your target audience, its needs and how they match up with the skill sets and resources in your firm may help you more cogently identify your differentiators.
Marketing and business development efforts that will lay a foundation for deliberate, intentional growth must successfully communicate points of differentiation based on your firm’s ability to go beyond the delivery of information (a commodity) to the delivery of solutions and ideas. Clients assume that any firm they are considering will have the requisite technical skills and data-based deliverables. As a result, in order to move beyond price-related competition in the proposal phase of business development, you must find a way to illustrate to the prospective client that your service offerings go beyond just providing information.
Clarifying what sets your firm apart from competitors is also helpful for establishing annual growth goals. Most firms struggle with identifying growth goals that are meaningful, future-oriented and aligned with the firm’s strategic direction. Consider what research is conducted on your existing markets to ensure you have a realistic outlook for growth potential. At the same time, examine what processes are in place that will provide a constant focus on identifying new markets.
Improving your close rate can be a big boost toward achieving your growth goals, so examining close-rate dynamics is useful. Most firms have a 40 percent or lower close rate. What is your firm’s current close rate, and given that, what percentage of your firm’s revenue must continuously be in your pipeline to achieve your targeted growth goals? Now that you know this, consider what obstacles besides pricing stand in the way of achieving a higher close rate. What resources, training, coaching, etc. have you put in place to conquer these obstacles?
Marketing and business development are clearly management issues that are priorities for CPA firms. Identifying what differentiates you firm, establishing annual growth goals and taking steps to improve your close rate are just a few ways to improve these aspects of your practice.
To review the top 5 management issues firms consider a priority click here.