Marketing tips (2 of 3)

Following on from the last post, here is a continuation of the article by Harry Kafka @ HDK Consultants.

WHY THEY DON’T CHANGE ACCOUNTANTS?

As things stand, the “negative ignorance” out there about accounting ensures that business owners do NOT CHANGE accountants easily.

Let’s compare it to a car and the difference becomes evident. Everyone is eager to change their car, provided the car isn’t brand new and they can afford to change… and often even when they can’t.

Why? Well, because a new, better, bigger, faster, fancier vehicle represents POSITIVE things.

They UNDERSTAND the values that come with a better, newer model of an automobile.

Status, pride of ownership, pleasure of the ride, sense of fulfilment… all positive things.

Now, let me assure you that research shows most business owners are DISSATISFIED with their current accounting services.

And yet, they DO NOT WANT TO CHANGE ACCOUNTANTS.

Not only would it be “free of charge” (as the new service would not cost that much more than the one they’re already paying for) but the BENEFITS of a better service would far outweigh any problems of transition… you’d think, right?

But it’s not so.

It’s not so because they’re negative about accounting and emotions take over.

We all know that where people react emotionally, logic goes out the window.

We make silly decisions if upset… and some say we make equally illogical decisions when in love.

Be that as it may, the fact remains that the operating principle with most business owners in this matter is…

“…better the devil you know than the one you don’t.”

Believe it or not, THEIR basic thinking is that “all accountants are the same so why go into the trouble and expense of CHANGING?”

“Once you’ve seen one accounting professional you’ve seen them all,” in other words.

This lengthy explanation actually shows WHY you (like most other accounting professionals) find it so very difficult to acquire new clients.

The problem is that you offer “an identical accounting service” (as seen by business owners) so they don’t see any reason to CHANGE.

You don’t change a dollar to a dollar… that’s the logic here on their part.

To create interest for your services in order to sign on new clients, you need to offer something BETTER.

One more post will round out this mini-series of marketing tips.

Bye for now,

James E

Marketing tips (1 of 3)

Hi all. I’ve been out of action for the last week or so and haven’t blogged. Sorry. My Publisher for the book that I’m working on explained to me the meaning of the word “deadline” with emphasis on the word dead! Hence I have a good reason for being slack with the blogging.

I was on the web recently and came across some excellent material put out by a group called HDK Consultants in the UK. Here is what I found – its is definitely a worthwhile read!

“I was a CFO at a software company, moved back into public practice which I haven’t done since college. Been a year now and have 5 accounting clients. How do I attract business?”

Essentially, there are a few “hidden” barriers to acquiring new accounting clients.

First and foremost, the average accounting / CPA client simply does NOT understand the service he receives.

This is due to his lack of knowledge in accounting procedures and financial planning.

Additionally, the necessity to use accounting services – to keep books, to file annual reports, taxes, collect sales tax and whatnot – is enforced upon him by legislation, and not something he does voluntarily.

I’m not taking a stand for or against taxation or legislation here, merely pointing out that anything we are ORDERED to do under threat of punishment does NOT bring about POSITIVE feelings.

Thus, we have TWO main factors here, both of which make the average business owner negative about all that has to do with accounting.

He doesn’t understand the information he receives from his accountant and he doesn’t like having to pay for it.

Subsequently, he feels negative about his accountant TOO although it’s illogical.

YOU are there to HELP him handle these demands set by the government, YOU didn’t legistlate those laws, right?

Right you are… but here enter the frailties of human thinking where it is based on negative emotions.

“I don’t know and I don’t care” becomes the “defence” against any sensible advise from the accountant.

Tune in next time to read the next installment from the chaps @ HDK!

Bye for now,

James E

The importance of win-win

I’ve heard many stories throughout the years of business clients telling me about outstanding experiences with advisors. In the case of accountants, the common thread of these experiences seems to be the tendency of the accountant to more often than not leave something on the table. This means that the accountant always does that little bit extra and goes the additional mile when providing a service. It might be some extra service you don’t charge for or some market news you heard that your client may not be aware of.

A good example of that little bit extra is a partner friend of mine travelling to the store opening of one his clients at his own expense. He wasn’t invited or expected to be there – he just turned up. The client saw him in the crowd and just smiled. My friend had travelled from Brisbane to Melbourne to go and show his support for the thirty minute launch. A big deal? Perhaps not – but it meant a lot to my friend’s client.

Incidentally, it might interest you to know that this particular client is a member of the Australian BRW 200 rich list (he is worth about $US 400m +) and has used my friend’s services for many years. This client has been so impressed by my friends attitude that he has recently asked my friend (and his staff) to personally mentor and coach his three children (aged in their twenties) in the ways of business, finance and personal wealth management. Not a bad gig.

Simple rule: Leave something on the table = the table will get bigger = a win-win

See you next post,

James E

A tale of two bananas

I was in a meeting with a top ten accounting firm recently.

The purpose of the meeting was for me to introduce a friend of mine who needed some specialist advice regarding an upcoming transaction.

My friend & I were on one side of the table; two partners on the other side. Lets call them B1 and B2.

B1 was engaging and attentive to my friend and the concerns of his business. He was a good listener and asked the right questions.

B2 seemed to be very interested for the first ten minutes of the meeting and then for some reason “turned off” for the remainder. In the following forty or so minutes he looked at his Blackberry about 10 times and sent at least 3 emails or txts during the meeting. He asked a few questions but gave the impression that he was too important for such a “small” client.

B2 is an absolute expert in his field and commands  high fees for his services. However, in spite of his technical prowess he didn’t get the assignment. I think my friend said it best soon after we left the meeting… “what a w_ _ _ _ _ !”

What more can I say?

🙂

The power of exaggeration!

If you’re more than a one time reader of this blog you’ll know that I’ve been a big fan of the work of David Maister.

Here is a piece David originally posted in June 2006 which was titled “Maister’s Exaggeration Ploy” It is definitely worth a read!

I have noticed something very strange about engaging in discussions (and even disagreements) with people.

The more you disagree with them, taking the other side in an argument, the more vehemently they push their original point of view. However, if you don’t disagree, but restate their point in an exaggerated form, they often back down, or at least tone down their original statement.

This works so well, I’m thinking of copyrighting the idea and calling it “Maister’s Exaggeration Ploy.”

(I know, I know, there’s little new in this world and someone else probably thought of it before me, but I don’t think I stole this from anyone. And if I did, I can’t remember from whom.)

To see how my principle works, imagine a family member, say, a brother, who is upset at how he has been treated by a cousin. Your brother says: “I’m really upset with Jimmy. He had no right to speak to me that way!”

Because you want you brother to calm down and get over it, you might say: “Don’t let it bother you. Perhaps he really didn’t mean to be unkind.”

As valid as your point may be, you can bet your remarks will only serve to annoy your brother. After all, you appear to be defending cousin Jimmy by downplaying his intentions. This will set your brother off on another tirade, and also, probably, cause him to get annoyed with you, too.

But what if you had said: “You’re right! Jimmy’s a louse. He always has been! I think we should have nothing to do with him, ever again! Let’s leave him off the invitation list for all family gatherings from now on!”

Nothing with people is a certainty, but I would bet that your brother’s next remarks will be something like: “Well, maybe it wasn’t that bad. I’m upset, but there’s no point over-reacting.” You have calmed him down by agreeing with him and exaggerating his own point!

The same principle of exaggeration applies in the workplace. If your boss (or client) berates you because you were late in delivering something, don’t fight back, saying it was his or her fault (especially if it was!)

Instead, say: “I realize what a problem this has created for you. I’m really sorry that I caused you such turmoil. Can you help me figure out a way to prevent this in the future?” The boss (or client) will, with high probability, calm down and you’ll survive! Or at least the odds will be more in your favor!

Try my approach out. Let me know if it works for you!

See you next post.

James E

A word from the Australian Rugby Union

Here is an extract of an interview with Ashley Selwood, CFO, Australian Rugby Union.

What is the most important quality or attribute you look for in an accountant?

The times that we’ve engaged an external accountant have been mainly around projects. We’ve tended to engage accountants and others for project-type work, so they’d come in to complete a specific task. There has been some advice from time to time on tax issues, but we’re a not-forprofit, so although we don’t pay tax we still have tax issues. We’ve still got fringe benefits, GST and the like. My comments are around where we’ve engaged accountants on the basis of projects.

Set against this background, one of the attributes I’d look for is the ability for the person (or persons) to sit down and spend the time up front getting to know our business. In my experience many accountants use pre-defined work processes, templates, checklists, software and so on. This is good and helps in a lot of business settings such as audit assignments.

However, I find at times that external accountants already have some preconceived ideas about what the solution is before they spend the time to actually get to know our business. We’re a sport and nine out of ten people who walk in the door are either followers of rugby or at the very least know a bit about rugby. When you’re dealing with sport there’s a lot more heart than head involved and sometimes people will walk in the door as a consultant or an accountant and the first thing they’ll do is spend an hour telling you what’s wrong with the Wallabies! Once you get through that, they always seem to have quite fixed ideas of what the solutions are without actually spending the time to get to know our business. In my view this is a fundamental mistake. It not only applies to accountants but all other external professional consultants irrespective of their discipline.

With sport, people understand it or think they do. What they don’t understand is the business of sport, which is why we are engaging them in the first place. The challenge, in our case, is that the core of our business is run on six Saturday nights during the year. We play six test matches annually against countries from around the world; we drive all our revenue for the year from those six matches.

When you’re sitting down and talking to an accountant and looking at what attributes you want them to have, you want them to set aside their preconceived ideas and get to really know what our business is about before they start, and get into the process of providing the advice or whatever the work they need to do.

Enough said?

See you next post,

James E

Technical expertise – how important?

Recently I met with the CFO of a $200m + agribusiness and asked him the question …

How important is technical expertise in an accountant?

It’s extremely important.  What you’re paying for is their level of expertise and so they need to be able to give you that right level of expertise for that particular assignment that you’re engaging them in.  It’s the crux of it all.  They need to have the right skill sets to be suited to the particular work assignment at hand.  You don’t want a generalist normally; you want someone who can come in, do the specific assignment that you want them to do, deliver it in the most efficient, effective manner, and then be out again, because that is what you are paying for.

Do clients expect a certain level of expertise and skill when they engage a Big Four accounting firm?

Absolutely, yes.  With one of the larger firms, you do go in with an automatic assumption that they’re very well prepared.  That’s always been my experience.  I’ve never had any difficulties with that.  The issue more is in the level of staffing that they put on a particular engagement, and whether you get the junior who you end up training on the job, or whether you get someone who’s actually pitched at the right level that you need.  If you get the junior you find that they’re having to rework things as they go back to the partner and change things. So often with a larger firm it’s not the quality at the partner level, it’s the quality of the staff that are put onto the assignment and whether their skillset and experience is at the right level.

Enough said.

See you next time,

James E.

Can you connect dots?

Earlier in the year I met with a CFO of a large retail business. I was interviewing her for the book I’m currently working on and we had a great and wide-ranging conversation over a couple of hours. During our chat we discovered that we had a mutual friend – a partner in a top 10 accounting firm. She had relayed to me that this chap had been particularly helpful to her on and off over many years during her career. To protect the innocent lets call this partner, Ricardo.

Now the CFO had been at her present company for a couple of years and had not connected with Ricardo since starting in her current role. So I asked the CFO may I mention her to Ricardo and she was happy for me to make the “re-introduction.”

The next day I was meeting with one of the senior staff in Ricardo’s firm and told him about my session with the CFO. He, like me, thought it would be a great opportunity and to make sure I followed up with Ricardo.

Later that same day I emailed Ricardo and told him it would be a great idea to re-acquaint himself with the CFO and her new firm. Furthermore, I could give him a heads up on what they were doing and some possible avenues for potential new advisory work.

I know that Ricardo is a busy guy so I thought it might be a day or two before he got back to me. I waited a week, then another and then another. It has been seven weeks since that email and no reply or phone call.

Hmmm … I’m not offended in any way that Ricardo didn’t get back to me. I just think it is stupid and lazy. Here was an opportunity to re-energize a relationship with a CFO of an organisation with a revenue of $200m+ and win some more work.

Who knows maybe he just didn’t know how to connect the dots! 🙂

See you next time,

James E

Lunch with Michelle Pfeiffer (2 of 2)

Another question I asked Michelle during our lunch was …

What can accountants do to improve their service to you?

Michelle:  First, find the value add and deliver it.  The second one would be the way you communicate to ensure that your client feels or sees or hears that you’ve got a vested interest in them, so that they feel comfortable and they know that you’re doing the best thing for them.

James:  How does one prove that?

Michelle:  It depends what you’re talking about, but it might be a phone call to say, ‘Hey, haven’t heard from you in a while.  Is there anything I can do for you?’  Or it might be, ‘Oh, you know, I was thinking about you.  Are you doing this in your business?  Can we come out and catch up for a coffee?’  There’s different ways of doing it that might be a phone call and nine out of ten times it might be, ‘Well, nah, we’re all good.  Thanks.’  But, you know, you’ve left a good impression.  It’s all about building relationships.

James:  Do you have a third pearl of wisdom?

Michelle:  I think the biggest is the value add, pro-activeness and communication.  They’re the three most important things an accountant can do to improve their service, not only to me, but the majority of clients I’m sure!

Like most CFOs I have interviewed over the last few months, they don’t want the sun, moon & stars delivered on a silver platter from their accountants and advisers. All clients like Michelle want is a relationship that is real and that helps their business in a tangible way. Is that too much expect? I think not 🙂

All my best,

James E