Fee or relationship – which is more important?

A while ago I was thrust into an interesting situation.

A long-term commercial client of mine had asked me if I could recommend a specialist tax consultant for some advice that he needed regarding a pending transaction.

To cut a long story short, I recommended a senior tax specialist to my client and the two of them started to meet to plan & discuss  the project at hand. The first meeting went well and then things fell apart.

Without going into the gory details, the advice delivered didn’t help my client and the final bill that came was about double what the client thought the service was worth.

A tax friend on one side and a long term client on the other. I was the chap who brought them together and neither was happy. Not a good situation to say the least!

I suggested to both parties that we meet and hash things out.

We got together and each party presented their views in a full and frank way. After about 30 minutes, my tax consultant friend made a really interesting statement that changed the whole tone and atmosphere of the meeting.

With names changed and a little license on my part, … this is what the tax chap said:

Wayne … I’m sorry you’re not happy. I think we have had a communication breakdown and that has created an outcome which is not what you want or what I want. I’m not worried about my fee. The most important thing here is my relationship with you. I’d like to think that you & I will be able to work together in the future. I’m happy to wipe my fee and start again.

There was a pause and my client (I could see) was impressed with the tax chaps attitude and willingness to admit fault and start over. My client said that he was happy to pay 50% of the fee owing and would be open to work with the tax chap again.

I hope this has reinforced to you which of “fee and relationship” is the more important!

See you next post.

James E

What is the most important thing?

Sorry guys. I missed out posting on Wednesday this last week.

I’ve been putting in lots of hours with my day job recently in preparation for a trip to the US next month with my 18 year old son. My son finished high school last year and is taking a gap year this year before going to university next year. Wow that last sentence certainly had a lot of years in it!

Anyway my son is REALLY into music and he has been saving up to attend Coachella – a music festival being held in Palm Springs, California. He wanted to go with his friends but none had saved up enough cash to go. so being the cool and wonderful dad I offered to go with him. My son has never been overseas before and I’ve never been to the US.

So the above is a long way of saying that I needed to make sure that the wheels are turning while I’m away for 3 weeks. Being self-employed one has to consider such things.

In short – my day job has been getting in the way of my other activities like blogging.

Here is a post that I wrote for MYOB last month which I think you’ll get something from. Hopefully it will make up for my omission during the week 🙂

I’m assuming, if you’re reading this article, that you’re an accountant or at least working in the industry in some capacity.  Let me ask you a question … “As an accountant what is the most important thing you do for your clients?”  Over the years I’ve been given any number of responses to this question.

Some say, “Keep my clients safe & compliant”.

Others say,  “Make their lives easier”.

While many say, “Get them a big tax refund”.

However, the most common response I receive to this fundamental question is, “to add value”. Like most business-speak terms, to add value just rolls off the tongue. It sounds right and makes people who hear it (at least at first) believe that everything is going to be ok and that you’re the right person for the job.

However, what does adding value really mean? We all know what adding means so let’s focus on the value bit. What is value to your client? Is your GEN Y self-employed IT contractor client wanting the same value as your 40+ years TAFE teacher? What about the single mother working two jobs or the construction company owner employing 100 staff?

It’s obvious that value means different things to different people. So how do you determine what is valuable for your clients and prospects? The answer is incredibly simple – you ask them.

A few months ago Thomson Reuters published a book I wrote titled, What do Accounting Clients Really Want?The book is a series of 20 interviews of people who buy accounting services for their respective businesses.  Statistically, of course, a pool of 20 interviews means nothing, however, 20 in-depth personal conversations does.  Overwhelmingly, the people I interviewed want their accountants/advisors to invest in a meaningful relationship with them. They don’t mean the odd lunch and/or drinks after work; but rather a relationship that tells them (i.e. the client) that you have their best interests in your mind and heart. By having a close relationship you can truly determine what is of value to them and what isn’t.

Kym Warner is the CFO of The Coffee Club – a national chain of coffee franchises generating over $320m revenue annually. When I asked her,  “What is the most important quality or attribute you look for in an accountant? Her reply was simple

… for me it’s about the relationship. I want to know that I can build a relationship with them…

Kym relayed the story of her first day as CFO for The Coffee Club and her relationship with her new external accountant.

It’s the relationship that we’ve built. I think the fact that when I started, my second day was the first day of our audit partner; we’ve really built a bunch of knowledge together.  We’ve shared the improvements in the business, so she understands where we’ve come from.  The partner herself is a lovely lady.  Very professional, knowledgeable and commercial. If we have any toing and froing, I can talk openly and honestly with her, which is great, because everything they do has to be reported to their sister firm in Thailand, which is where our investors are based.  I think this partner has a real empathy for my position; she seems to understand the pressures I’m under.  I want our auditors to be honest and ethical, and sensitive enough so my role is not undermined with the board and stakeholders within the business.

It’s the relationship rather than the process that means more to your clients than anything else.  What they are really after is someone who can connect with them.  A conversation with a client over a cup of coffee will do more to deepen the relationship than sitting at a computer in your office.  Don’t believe it?  Why don’t you try it a couple of times – you may just surprise yourself!

Until next time,
James E

I am not an animal … I’m a human being (2 of 2)

Continuing from the last post we have the 2nd part of Keith Farazzi’s 2006 article in Fast Company titled Give Clients What they Really Want.

This method might require you to find outside partners to deliver–yet another reason to develop larger networks of friends. In fact, the first couple things you “sell” to someone may have nothing at all to do with your own product.

For example, I frequently strengthen relationships with clients by aiding their personal career pursuits, entirely separate from what they’re procuring from my firm. When I learned that one of my clients ultimately wants to be in politics, I got him invited to join an advisory council to Bill Clinton comprised of people under age 40. When another client confided in me his desire to be an actor, I took him to dinner with a leader of William Morris Agency. A third client was struggling with earning the respect of his CEO, so in addition to the consulting services we provided his organization, we coached him personally on how to leverage the work we were doing and even just how to behave in the CEO’s staff meetings to build the credibility he needed to become a key player in the executive team.

Another person who has a knack for giving clients what they really want is Ty Pugh, a Seattle-based financial advisor. The financial products and services he has to sell are true commodities. You can get the same stuff from many other places. But Ty is building lasting relationships for revenue growth by providing clients additional investment opportunities in real estate, independent of his core offerings.

After Ty made a personal investment in a waterfront resort community in North Carolina, he generously made the opportunity available to many others. He convinced the developers to lease a jet to fly investors from Seattle to the east coast. He brought in former professional football player Nesby Glasgow to serve as the real estate agent and to lend some cachet to the deal. And he invited 42 investors to check out a new investment opportunity, take a free trip to a beautiful resort community while hobnobbing with a pro athlete, and get to know a whole bunch of like-minded investors.

This amazing demonstration of how he’s much more than your average financial advisor won Ty clients in the developers, the real estate agent, and some of the investors. You, too, can make your business boom if you find and deliver what clients really want before selling your core product.

Hope the last couple of posts have been helpful and maybe have given you a little taste of the potential benefits that are achievable in treating clients like human beings.

See you next time!

James E

I am not an animal … I’m a human being (1 of 2)

As the URL for the site suggests this blog is all about the sharing of ideas and insights into what clients really want – specifically professional services clients – accounting, law, management consulting, engineering and the like.

I came across a wonderful article written by Keith Ferrazzi that was originally published in Fast Company back in June 2006. Despite being 5 years old the lessons contained within are as fresh and relevant today as they were back in the pre GFC world of 2006.  I love the idea of sharing with you knowledge available on web sites, journals or magazines that professional advisers like those listed above  may not have on their radar. By the way … the reason for the photo of the Elephant Man made famous by John Hurt in the 1980 movie of the same name is his famous haunting statement during a particularly cruel scene – “I’m not an animal I’m a Human Being!” It will make more sense as you read the piece below. I’ve also included the video clip link to give it more context.

Enjoy the article!


Build real personal relationships with your clients–so they’ll reveal to you what they really want, what could really drive their decision but can’t be written in an RFP.

You may remember the 1990 movie Crazy People in which Dudley Moore plays an advertising executive whose idea to write “honest” advertising copy like the following lands him in an insane asylum:

Volvo… they’re boxy, but they’re safe.
Porsche…you can’t get laid in one, but you will once you get out.

As outrageous as those taglines were, they were successful in the movie (and probably would have been in real life, too) because they spoke to what people really wanted–far beyond what car companies learn from customers in rank-the-features surveys. In these cases, customers didn’t just want cars that got them from point A to point B. They bought a Volvo for the peace of mind and the Porsche for a new hope of finding romance.

Our organizations face the same problem automakers do. I certainly don’t think my firm’s marketing and sales consulting services or training offerings are anywhere close to commodities. I believe we have deeper insight, more experience, a watertight methodology…a laundry list of reasons why we can provide value no one else can. I bet you feel the same way about your core products and services. But the truth is that many other organizations claim to have the same things we have. And if you delude yourself thinking that what’s on your website and printed marketing collateral is significantly different from what others have written down, then you’re full of it.

That’s why we have to build real personal relationships with our clients–so they’ll reveal to us what they really want, what could really drive their decision but can’t be written in an RFP. Then, and only then, do we get opportunities to offer generous solutions to their problems that convince them to purchase our core products and services.

You have to approach them as people as well as professionals. Show them you’re human by letting your guard down. Share your passions and learn about theirs. See yourself as a combination of consultant, life coach, therapist, and friend. Ask insightful questions, actively listening for what really motivates or frustrates them personally. Then, when you have a deep understanding of what they really want, try to bundle a solution that, first and foremost, solves one of their problems and, ideally, includes your product or service.

Watch the Elephant Man YouTube Clip to get the full impacthttp://www.youtube.com/watch?v=q2KEN8XBL0

See you next post for part 2.

All my best,


Give it to me straight (please)

We have all heard the old saying – “give it to me straight.”

Usually in the movies someone is sitting in a doctors office on a chair on one side of the desk with the doctor sitting on the other side.  The doctor looks worried, is fidgety and is searching for the right words to use. The patient (usually a man) calmly asks the doctor to “give it to me straight.”

The doctor replies, “Bob … I have good news and bad news. Which would you like first?”

Bob says, “Give me the good news Doc”

Doctor replies, “You have one week to live”

“What? One week to live! That’s the good news? What on earth is the bad news?, Bob shouts out.

The Doctor sheepishly admits, “The bad news is … I meant to tell you the good news last week”

Funny story, but unfortunately many clients of accountants, are victims of not being told the bad news early enough.

A good friend of mine is a management consultant.  He is highly skilled and experienced and earns a very good living. Being self-employed he has to fulfill the usual compliance requirements for operating a small business. As you know, in Australia one of these requirements is to lodge a quarterly business activity statement (BAS). Along with lodging the documentation there is usually an amount of tax payable.

For some strange reason my friend hadn’t lodged his BAS’s for 12 consecutive quarters. For some strange reason his accountant didn’t remind or raise the issue with my friend not until one day four years later he had a difficult chat with his client. Needless to sy it was not a nice discussion – the outcome of which was a bunch of fines, interest on what was owing, and the balance of the tax payable – a truckload of money and a blemished record with the Tax Office.

A question for you … “Who is at fault … the client or the accountant? Legally its the client. Morally it maybe the accountant.

What do you think?

See you next post.

James E.

The danger of overselling ( 2 of 2)

Last post we left the story with the question: ” How could a senior partner who is highly skilled & experienced in the art of relationships & business development get it so wrong in what one would think is a simple and straightforward pitch?”

Unfortunately, the answer is amazingly simple. Don lost sight of the relationship and was focused on the fees. The prospective client wanted a specific project done – A. Don not only presented and impressed the client that he and his team can do A and do it very well, he went on to “sell” the client B, then C, D, E and F. That was his mistake. Don, under pressure to generate more fees simply oversold what the firm could do for the client. It was clear to the client, obviously not Don, that  the relationship with him and his organisation was not the focus of the meeting but rather he was being groomed as a “cash cow” of sorts. Understandably the client was unimpressed and things went downhill quick from there.

Clients aren’t stupid. The CFO in this example saw right through the facade and he didn’t like it one little bit.

What could Don have done differently? With the benefit of hindsight – Don should have focused on doing A and impressing the socks off the client and invest in the relationship. After respect and trust has started to develop Don could have easily mentioned about service offering B and maybe even C. I dare say the reception from the CFO would have been different after he saw that Don and his team were in it for the long haul and wanted to start and build a relationship and add “goodness” to their client 🙂

Until next time.

All my best,


The danger of overselling ( 1 of 2)

Lets take a short break from the extracts of the “What do Accounting Clients Really Want?” book for the next few posts.

I had a call from a CFO friend of mine who wanted my advice on a person we both knew. Lets call this person we both knew Don as is Don Draper from the popular television series Madmen.

Don is a senior partner in a top 10 Australian accounting firm. He has 25+ years experience working in professional services as is recognised by his firm as a rainmaker, that is, someone who is able to effectively sell additional services to existing clients and win new clients. He is often described as proactive, articulate and very “client-centric” – traits that are often in short supply within partnerships in professional service firms – not just accounting, but in law, engineering, management consulting and so on.

My CFO friend called me after a presentation that Don made to him in response to a specific request for accounting services. According to my friend, Don’s presentation was both impressive & informative. However, he went waaaaaaay over the top; so much so that the CFO was simply turned off and in his own words … “it just left a bad taste in my mouth”

Hmmm … this is not a good situation to say the least. How could a senior partner who is highly skilled & experienced in the art of relationships & business development get it so wrong in what one would think is a simple and straightforward pitch? Don would have done hundreds of these presentations over the course of his career – a high proportion of which would have been successful. Whats going on?!

Tune into next post to find out about Don’s dilemma!

All my best,

James E.

Forests and trees

I bet you a dollar that you have never heard of HVP Plantations. Well until meeting Steve Ryan, HVPs CFO, nor did I. HVP is one of Australia’s largest privately owned timber plantations.

Steve is a seasoned CFO and has a lot of valuable things to say about the profession and how he engages with accountants and their firms . Here is just one example.

Steve, if you were to hire a new accountant/accounting firm what are the things you look for?

From my perspective, overall, I’m looking for value for money.  Because any time you’ve got to go outside and use additional accounting services, it’s usually not a budgeted item, it’s normally not something that you expected to do. Leaving aside the normal annual auditor engagement and perhaps some tax work for ongoing requirements, when you’re talking about a specific assignment, the expense is unexpected and as such it isn’t budgeted for. It’s something that comes along and you need assistance for a particular reason.  As a result, I’m really looking for value for money out of it because it’s normally an unanticipated cost that we’re engaging for the organisation.

For me value for money simply means that I want an efficient, effective, quality job done.  It also means that I can rely on their expertise on the job.  I can actually rely on the fact that they’ll resource correctly so that the person takes the right amount of time to get through the work and not take too long or too short because they’re at the wrong level of expertise for the assignment.  Value for money for me also means that there is not a huge bureaucracy in the organisation which means that a piece of work has to be reviewed six times before it’s signed off and therefore we’re not adding layers of cost unnecessarily.  It also means that I can get it on a timely basis.  That the work is not going to drag on beyond a reasonable time period in which I want the work and assignment completed.

When I’m looking for a new firm I also want integrity.  I want to make sure that the organisation that you’re dealing with is above-board, is honest in their dealings and professional in the way they go about things.  Honesty and transparency is a must have.

Also I would want the new firm to promote good communication.  The ability of an organisation to clearly understand what the requirement is, proactively ask questions, clarify if they’re not sure on it, and give you a succinct response or outcome to your assignment is what you want.  Not a report that might waffle on for forty pages to try and justify the cost.

Talk with you next post.

Bye for now,

James E

The CFO directing traffic

Peter Backwell is the CFO of Altus Traffic – a business which provides traffic management services when road works are underway. Tey supply the people-power and equipment to direct traffic while roads & bridges are being built and/or maintained (http://www.altustraffic.com.au/)  Here are Peter’s thoughts to the question, “What can accountants do to improve their service to you?”

Two things that come to mind would be continuity of staff on the job and transparency on pricing.

All clients expect some degree of staff turnover within their accounting firms, however, when more than 60% of an audit team changes year on year it is simply too much. As CFO you have to spend a big chunk of time bringing the new people up to speed.  It’s an imposition I can definitely do without.

We’ve spoken about pricing earlier. However, it’s worth reinforcing the point that all accounting firms, in particular the big ones need to be more realistic about the fees they charge for their services and be ready to answer the question “why?”

The other thing accounting firms could do to improve their services is to be a little more generous in the sharing of their expertise.  I find sometimes that they’re overly protective of some of their tools and processes. For example, they might have some really funky Excel spreadsheet that they’ve produced that provides users with a set of useful calculations or something like that. Some firms will give it to you, where other firms will try and sell it to you or say that you can’t have it and or they’ll charge you a small fortune to build it for you.

Being more open with such tools would help the relationship no end. I’d be more than happy to leave their logo on the tool and tell people about it.

Until next time, all my best

James E

A CFO powered by coffee!

As mentioned last post, for the next few weeks I’ll be publishing extracts from “What do Accounting Clients Really Want?” book which is due to be released by Thomson Reuters mid-to-late August.

Here is the response from Kym Warner, CFO of the successful & growing retail franchise, The Coffee Club (http://www.coffeeclub.com.au/) to the question: What is the most important quality or attribute you look for in an accountant?

I think that for me it’s about the relationship. I want to know that I can build a relationship with them and that I can rely on their technical advice.  They also need to have the ability to understand our business.  Ideally, I’d like them to have some commercial acumen, not just years in the profession.  I do appreciate that they’ve either worked in commerce or can understand the demands of working in the commercial environment, more so than just providing advice.

From a client perspective, it’s quite ironic because you have to invest the time to train the accountants to be able to give you advice about your business and then you pay them for the time that they’re learning about your business. Go figure!

I think liking people and just being able to talk with them openly and honestly can’t be under-estimated.  Not just about having confidentiality over business matters, because I think that goes without saying in the profession, but it’s just the ability to listen and to hear what I’m saying.  I cover so many areas of our business that when I’m dealing with one specific thing, I don’t need them to just be focused on that one thing.  I need them to be aware of all the other items that I cover, all the other risk areas of our business.  When they’re providing tax advice, I need them to also be considering the impact of any suggestions they may have on say on our auditor’s perception of a policy we followed.  Even though it’s compliance tax, just to use that as a basic example, it’s crucial to the business.  It’s boring as hell, but it’s absolutely fundamental.

See you next post,

James E