David Smith, Smithink
Accounting is now considered a mature industry, with growth rates typically mirroring those of Gross Domestic Product (GDP). Whilst the past few years have seen low growth, there are three ways to achieve growth above GDP:
1. Winning new clients from other firms
In order to attract clients of other firms, an effective marketing program is required. In this sticky market, clients tend to stay with their accountant even if they are not totally satisfied and often believe that all accounting services are much the same. Firms with successful marketing programs tend to:
- Apply a consistent marketing strategy. A well thought out program over a long period of time to create a cumulative effect. People need to hear a marketing message multiple times before they consider and act.
- Use multiple channels. Seminars, newsletters, social media, speaking engagements, telemarketing, direct mail, referral relationships, community involvement, advertising, website, PR campaigns all play their part. The key to success is developing a marketing plan and allocating resources. Firm leaders need to be actively involved in these activities, which may take them outside their comfort zone or require skills development.
- Be mindful of “hot buttons” for different clients. Cloud accounting can be of interest to many SMEs. SMSF continues to be an area of interest for many and, is likely to continue to grow rapidly. Those who have participated in the compulsory superannuation system all their working lives and are building sizable balances may look to take more control of their superannuation.
- Be brave and stand out. I was recently working with a firm that was thinking about taking some risks with its website messaging. A particular message was quite edgy and the partners were reluctant to use it. With trepidation they moved forward and at a client function it was the edgy messaging that received the most positive response.
- Become a specialist. It is clear that firms specialising in and developing tailored services for specific industries are achieving significant growth. Today, small business owners are looking for people with deep industry understanding to provide valuable insights into business improvements.
- Be clear who your ideal client is – and tailor your marketing activities accordingly. Don’t be everything to everyone.
- Identify “Blue Ocean” markets – markets with little or no competition. One example is targeting financial advisory services for lower to middle income Australians by using a combination of automation, appropriate staffing and tailored processes and services.
2. Broaden your service offering to existing clients
As automation’s relentless march into tax and accounting compliance services continues, firms are now looking at how to broaden their service offering. While developing new skills and employing software tools are important s, in our experience, these three things are even more important:
- Make time. Firms need to develop free capacity, enabling effective client engagement and spending time looking at ways to broaden their services.
- Improve client engagement. We call it a 'Needs Review' but essentially practitioners need to learn how to have a structured value based conversation with their clients to unlock their issues of concern, goals and objectives (both business and personal). This conversation is key for tailoring services to meet those needs. Many practitioners struggle with this, and. it is for that reason Smithink has developed a 10 by 10 'Needs Review' cheat sheet to help practitioners ask clients the right questions.
- Create accountability. Often, moving beyond compliance takes practitioners out of their comfort zone. It can be hard. Accountability is required to drive outcomes and avoid the tendency to fall back to traditional compliance work.
3. Acquiring another firm
This has been a tactic adopted by many younger practitioners to create greater economies of scale and broaden the service offering to underserved clients. Prices remain high due to considerable demand and with low yields in most investment categories. Not all acquisitions go smoothly and cultural fit is key. Alignment in quality standards and pricing can also be challenging. Any acquirer needs to ensure they conduct an effective due diligence exercise pre purchase.
For firms wishing to grow there’s a lot to be considered and that can be done. Regardless of the approach all activities need a clear objective, structured plan, resources and accountability to ensure success.