How to best present the value to your accounting firm client


Speaker 1: You now have this kind of benchmarking system or you’re doing cash flow analysis. You’re digging into those numbers. We had one firm that would set aside 30 minute, dig into the numbers to find new opportunities, challenges that go on in the business. Now that you have this information, how can you then go to the client and best present the value of this advisory service or of this higher level? We’ve already touched on this a bit which is the numbers will lead a lot of the discussion here and having the confidence. You know that you can bring a lot of value. Part of it’s just part of the confidence as well, but a very tactical question. Are these usually in person or are they Skype or Zoom? Is there a type of outline or arc that you want to go through? I know that Steve mentioned case studies in books. Let’s say you have an existing client. You want them to add an additional service or service offering that you’ve put together. How does that sales conversation work?

We’ll kick this one-off with Angie and we’ll pass it back to Steve as well.

Angie: It’s a broad question. I guess the best thing to do is understand what you’re working on with the client, so understand the solution you’re providing to them, what it does, what the impact will have. We use a standard GAAP analysis a lot, which is basically on the left hand side. Where are you currently? What is your current reality? On the right hand side, what is your desired or new reality? Then how do we get there? Those are the internal pieces in terms of how do you get from where you are to where you want to go.

A lot of times consulting recommendations come as a result of where the company currently is and wants to go. If you establish that from the beginning, when you’re reporting results and you’re reporting recommendations, you can always go back to this is where you are, this is where you want to go, and this is what it’s going to do for you.

Again, we like to do as many meetings in person in terms of setting the stage that we can, but that’s not always realistic. You want to make sure you can have an in person meeting if possible, but then you follow-up through regular video, Webpass, Skype meetings to talk about where you currently are. People are typically very visual, so if you can put things in graph format that are easy to understand to get buy in, that’s also very effective. Reports and graphs and regular communication, making it easy to understand, those are great ways to demonstrate what you’ve been doing.

Speaker 1: Absolutely, and I love the point about, and it goes back to this foundation of understanding where the client wants to get to and being comfortable asking questions. I think that’s just such a foundational shift to move into the advisory mindset. Steve, when you are approached with this kind of question where maybe you’ve uncovered areas where you can assist a client but you’re not quite sure how to present it to him … I know we’re getting a bit into sales conversation mode, so slightly different, but how can they start to reintroduce or introduce these conversations to a client in a way that the client sees the potential of maybe this advisory service that they’re talking about?

Steve: For me, it all comes back, and Angie’s insights were fantastically valuable there. Thank you, Angie. I agree with all of that. I learned a lot from that, too. For me it, again, comes back to my message from before, which is it’s all about the numbers. It’s the very best way of getting someone to sit up and take notice is to quantify that difference between those two situations that Angie talked about, quantify the difference between where you are now and where you might want to be.

For example, one of the things that I see worked very, very well is an accountant will sit down with their client and very often will be willing to do this, have this conversation, and do this bit of analysis for free because it is essentially the shop window, the sales pitch, albeit that is valuable in itself, for the other services that the client will go on to buy afterwards, the advisory services.

Sit down with the client, very often at the end of this financial year, when they’re finalizing their historic set of accounts prior to filing them. Sit down with the client and say something like, “Okay, well Dave, last year your profit was $30,000,” or whatever the figure is. You’ve got the agreed accounts in front of you. “Why don’t we spend a few minutes looking forward to next year and seeing what might be possible in your business.”

Either they’ll be using the benchmarking analysis to suggest that maybe it’s possible to get higher margins or higher sales growth rates or higher return on capital figures or whatever or, more probably, they’ll be drilling down into a simple version of the business model and playing with the profit leaders in their P&L account and showing the client what would happen if they could, for example, generate 10% more sales leads, improve their sales lead conversion rate by 10%, increase the average value of an invoice by 10%, and so on and so forth. The cumulative, the combined, effect of those changes can often be very, very dramatic. It’s the same sort of marginal gains principle that’s talked about a lot in the literature these days.

If you sit down with a client and say, “Where you are now is this set of numbers,” say it’s $100,000 a year in profitability, “if we could work with you to create these kinds of changes, then maybe your profitability,” you do the math in front of them using a spreadsheet or some other tool, “in principle, next year your profits might be $220,000.

That’s 120,000 increase, Dave, but it’s not just a one year increase, is it?” This is the other key. What accountants often do is they might quantify the difference between a tax bill with or without tax saving or profit figure with or without some advice, but actually very often that’s a recurring improvement. You put in some changes and the profits are, in my example, 120,000 pounds higher a year, not just once in total. “$120,000 a year, Dave, is an extra $600,000 over the next five years or maybe, given you want to retire in 20 years time, it’s $2.4 million between now and when you want to retire.”

In other words, extrapolate it over a sensible time frame because once you’ve got a 600,000 or 2.4 million dollar figure attached to the alternative future compared to where they’re going to be without it, then you can ask the question like say, “How would it feel if you actually were able to get that extra $2.4 million? What would you have to do with it? What would it mean for you and your family if your business … How would that make you feel?” Then they’ve attached all these words to this alternative future which they don’t know how to get there without your help. You’re the first person that’s articulated it, quantified it, extrapolated it, and really shown them what’s at stake.

Then you follow that conversation with some examples, again, yet more proof of how you can actually help them create that action plan of bridging the gap between where they are and where they want to be. Maybe that’s using some software to illustrate potential strategies or whether you share ideas with them or whether you share your case studies or whether you go into the content of your book and suggest you work together through the ideas in the book to make those changes happen.

How do you do it? If you then follow on from the quantification with some evidence that you can actually help in that sense and then, thirdly, if you are willing to price that work, because there still may be sketches and this is still about creating an alternative future and there’s no certainty that you’ll succeed, is there, but if you’re willing to price it in a way that takes a lot of the risk away from the client.

In other words, take to Dave, “In principle, there might be as much as $2.4 million at stake over the next 20 years, depending on whether you do something different or whether you just chug along as you currently are, Dave. We could help you look at how best to tap into that and our fee for doing that,” might be $5,000 or $10,000 in the first six months or 1,000 or 2,000. Here, even a better way actually on this, I think, might be $1,000 a month for the next 24 months, but you can stop at the end of any month and if you want, at the end of any month, you can ask for your money back for that month if you didn’t feel it was valuable.

You’ve taken away most of the risk from their shoulders, but what you might have done, in that case, is lined up $1,000 a month, a $24,000 fee but with a large amount of risk reversibility in there. At the end of any month they can decide if they want to trigger the guarantee or not. If they do trigger it, you then have the option of saying, “Well, actually, this isn’t working. Let’s just stop.” Or you might decide, “Okay, that particular month we weren’t particular valuable, so that’s fine.” You’re not money back guaranteeing all $24,000 at the end of the 24 month period. You’re making that money back guarantee much more manageable, much less risky to you. By breaking it down into bite sized chunks, you’re making the whole thing much more acceptable to them.

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