The Value-Added Proposition By Mark Holton from Smithink on May 10, 2019
Good profitability, strong cash flow, growing return and being client-focused go hand in hand. At practice level, most accountants believe this, but they have a hard time identifying specific actions and communicating the benefits to clients in a manner they can understand and more importantly value. Here are 10 specific things you can consider implementing in your firm:
1. Make sure the practices objectives are aligned with those of the client.
This is the most important step you can take to create a successful practice. What do your clients want, not need? While the question is simple, the answer often is not. Do your clients want customised solutions or conservative answers? Do they need someone to hold their hands or challenge their decisions and partner in their success?
2. Get to know your clients.
Clients can be segmented into one of four groups. There are clients who want you and you want them (A Class). There are clients that you want however for some reason they do not want you (B Class). There are the clients who you do not want yet they want you (C Class), and finally there are the clients that you do not want and they do not want you (D Class). Can you convert the B Class to A Class client? Is your future servicing the C and D Class clients?
3. Focus on making your clients more successful.
Think about the things that you can do to improve your clients’ return. The more you do this, the more value-added services you will be providing and the more loyal your clients will become. Use services that promote the need for improvement. Focus on developing the client’s strengths and addressing the client’s weaknesses.
4. Focus on client profitability.
Too many firms focus on client revenue. It’s not what you generate, it’s what you take home. Change your focus from top-line revenue to key bottom-line profit for each client. Determine your acceptable gross profit margin before you accept the next new client. By doing this you will focus on the right clients.
5. Don’t focus only on billing more time.
Client-centred, value-added practices focus on solving client problems and issues, not on building up chargeable time. The more successful you can make your clients, the more successful the practice will be. Learn to bill on the value of your work, not the time that you spend. Know your practices value proposition and sell it to the client.
6. Communicate with your clients.
Determine the most efficient way to communicate with your clients. Some clients may prefer email, while others still like to receive a letter by mail. A client-centered focus demands that you find out how each client wants to be contacted. Treat all clients as individuals and understand their idiosyncrasies.
7. Create systems to eliminate redundancy.
Develop one team way of doing things in the practice. Partners and staff should not have different processes. The more you develop systems and procedures, the more time your staff and partners will have to spend with clients.
8. Reduce your costs of providing services.
Salaries make up the largest portion of a firm’s cost. Make sure your compensation system rewards those who produce the most for the firm. Consider moving away from annual salary increases and create a system that pays performers more than non-performers. Consider paying staff bonuses if they achieve above the budget expectation. Encourage staff to up-sell services when clients present leads and reward them for their efforts.
9. Make client satisfaction a key element of your compensation system.
There is nothing more valuable than a satisfied and loyal client. Reward partners and staff for achieving superior client service and satisfaction. Constantly survey clients on how well you identify and solve their problems.
10. Train your staff.
Professionals are good tax accountants. That does not make them good client service people. They need training in developing listening, writing and probing skills, customer service and in learning how to manage and respond to client objections.