Sunday, August 22, 2010

This Really Works

Before we get into the meat of this post, let me offer a mea culpa … yes, I realize what follows will read like a commercial. I’ve actually avoided writing about this for a long time because I don’t want to come across like I’ve suddenly become Ron Popeil, hustling pocket fishing rods, Veg-O-Matic and rotisseries on TV.

But, you need to read about this because I know it really works and, no, I’m not getting a penny for writing about it.

This is a tool that not only helps your clients, it also elevates and differentiates your services from competitors AND it is a powerful means to both acquire new clients and obtain more work from existing clients.

Alas, it isn’t free, so if this posting is intriguing you’ll have to contact the source and determine if the expense vs. value is right for your practice. I can tell you about the benefits from a business development and client service/retention perspective; they’ll have to tell you how much it costs.

The products are the Snapshot (formerly ProfitCents) reports you can create from software offered by Sageworks, Inc.

Snapshot provides value for an owner/manager of a small- to medium-sized business by offering recommendations to help improve its financial performance. Snapshot analyzes the business’ financial data and generates easily understood narrative text reports. Many accountants find these reports to be very helpful when trying to explain the meaning and prospective impact of the P&L and balance sheet numbers. The reports include constantly updated comparative performance data so you and the client can see how the business is doing vs. similarly situated enterprises. If applicable, it also offers automation of the pre-audit process. For these reasons, a growing list of accounting firms (approx. 4,000 at present) subscribe to this software.

But the reason I’m writing about Snapshot today is specifically because it is a powerful – almost unsurpassed – business development tool. As noted above, it offers differentiation and elevates the value of your professional services to your clients. Beyond that, it has exceptionally potent persuasive impact upon prospects. Here are two examples of how it can be used with the owner of a small-to-medium size business:

Using Snapshot to get more work from an existing client. If you are a regular reader of this blog you have read about my “stickie” strategy. Here’s how it works if you are a Snapshot subscriber: 1) you have just completed a client’s tax filing, P&L/balance sheet, what-if cash or profitability analysis, etc. where the business’ performance has been reduced to numbers. You then, 2), enter the performance data and create a Snapshot Extreme® report for the business. 3), you compare the industry averages (these are highly localized and relevant, e.g. Architecture & Engineering firms in Southern California, so the results are apples to apples) to your client’s numbers and find one or more areas where their business falls short vis-à-vis the averages. 4), you grab a stickie and in your own handwriting (don’t type it) write, e.g. “Sharon, note where I’ve made highlights. These are below your industry’s average. I think you’re leaving money on the table. Call me and let’s talk about this. Dave” 5), the client docs, relevant section(s) of the Snapshot report are bundled together; the stickie placed on top, and the package sent off to the client. 6), a few days later the odds are overwhelming that Sharon will call you.

You then get together with her, discuss the performance gap and strategize how she can improve her results. I’ll leave it to you to suggest remedial steps, but it isn’t difficult to see how it will involve you, and this translates to billable hours. For example, you help her assemble a package that you will then use to approach her bank to press for expansion of her bank line or, perhaps, to liberalize covenants. Or, you can do an analysis to determine what the impact would be if she closed down a marginally profitable sales office in the neighboring city. Or, you can determine the impact if she changed her sales team’s compensation scheme so it had a reduced salary but larger commission component. Or, how would the numbers look if she upgraded her computer & software capability and based upon greater prospective efficiency, reduced her admin staff by one person?

Using Snapshot to convert new prospects to clients. If you have my manual or have read this blog for a while, you know that there is an imperative that you identify the prospect’s issues, concerns, needs and then provide spot-on, workable solutions. To do this you rely initially upon information the prospect gives you (ideally, that includes some current financial data) and then what comes up during the discussion. During the conversation when you are setting the appointment to meet, you say, e.g. “Pete, I have access to a proprietary database that can provide you with some really good input. If I can get your (tell them what you want) data I can prepare a report for you. It will really add value to our discussion.” They’ll almost always give you the data.

Then, when you meet, you leverage off the report to engage the prospect. You then leave the report with them at the meeting’s conclusion. It, of course, has your and your firm’s name prominently placed. They’ll read it later because, after all, it's all about their own business.

What does this process gain for you? First of all, it adds clout to your presentation. Secondly, it provides differentiation because the odds greatly favor that you will be the only one offering this benefit. Third, it empowers you to point out and focus upon areas the prospect should be talking about (they might not even know their pretax margin or debt-to-asset ratio is below average). Fourth, it gives validity to the courses of action you recommended. Taken together, this is an almost insurmountable advantage for a competing accountant to overcome.

There are other benefits and advantages I don’t have space to cover here, but as a final thought I want to point out that the use of Snapshot in the business development process gives your prospect an objective reason to pick you ... you were the most prepared, you offered solid data, you have positioned yourself a cut above any competitors, you proposed courses of action that the report agrees will be impactful, and you have demonstrated a high level of client service. Other things being reasonably equal, you will be their choice.

Here are links to check it out: Home page:
Specific information about Snapshot and other reports:

Tuesday, August 17, 2010

A Book That Will Put Money In Your Pocket

Hinge is a marketing firm in Reston, VA primarily focusing upon helping professional service firms (including those of the accounting persuasion) achieve uncommon growth and financial success.

Lee Frederiksen, Hinge’s Managing Partner, recently sent me an advance draft of their new book titled Spiraling Up: How to Create a High Growth, High Value Professional Services Firm. It is tentatively scheduled for mid-September availability.

I confess I am drawn to the book because its marketing message is so closely in sync with my own. In summary, find one or more niches and then tailor your marketing just to them. Don’t approach prospects remotely (telemarketing, email, etc.), instead focus upon personal marketing. Make sure your message is clear and that you differentiate your services from your competitors. Finally, you provide superior service and give your best clients plenty of love.

If an individual accountant or a firm follows the action steps Spiraling Up lays out there can be no result other than success.

Chapter One of the book begins with this provocative statement, “There is a group of highly successful professional services firms that grow 9X faster than their peers and are 50% more profitable. And incredibly, these firms spend less than average on marketing and sales.” The book then takes the reader through an easy to read and understand explanation of the factors shared by these über-successful firms.

While some of the book’s how-to is borrowed from what Hinge has found produces the most success for their clients, those lessons are augmented by the extensive research Hinge has conducted (in partnership with two other firms) with the goal of isolating those factors that are consistently present in these most successful firms.

When Lee and his co-author blended the lessons from Hinge’s experience with the conclusions of their research, the result became the contents of Spiraling Up.

You can download a 31 page summary of the underlying research at

I do not know the details of how the book will be distributed, but if you download the research you’ll have Hinge’s web site and can check with them in mid-to-late September.

The draft I read doesn’t talk about how you actually convert prospects to clients (that’s more my niche), but it most assuredly provides solid insight about finding high quality prospects.

Check it out. It will be well worth your effort. And, just to make sure we’re transparent here, I have no pre-existing relationship with Lee or Hinge and am not receiving any compensation whatsoever for promoting their book. I just think its contents are spot on and you need to know about it.

I’m very interested in hearing about your reaction after the book comes out. Please take a minute and shoot me an email.

Saturday, August 7, 2010

The Best Way To Meet With A Prospect

A prospect can be defined as any person who represents the opportunity for additive billable hours. This can include both present clients as well as non-clients.

If you are contemplating meeting with a prospect who is not a present client you have to decide where (and perhaps how) you will get together.

Rachel, who practices in New York, told me how she liked to set up a formal time to talk with prospects on the phone. Asked why she didn’t instead meet face-to-face, she replied that getting around was simply too difficult and took too much time out of her day.

Her strategy was to schedule the discussion in the morning, during mid-week so the Monday and Friday pressures weren’t present, and get a commitment that the prospect could talk for at least a half hour (and hopefully longer). She would send over in advance an agenda plus whatever documents she desired to refer to during the discussion. The package would also include a transmittal letter, brochure, testimonials and her business card.

So, how did Rachel’s system work? She may have saved a lot of time, but the results she obtained were poor; estimated to be about a 10% conversion rate.

As last week’s posting discusses, to convert a prospect they need to a) like or at least have a good “gut” feeling about you, b) believe you are competent and, c) become convinced that you understand their issues and can provide the needed solutions.

Since so much of interpersonal communication, both in terms of understanding and clarity, comes from non-verbal cues, Rachel was at a severe disadvantage with her telephone-only approach. She simply couldn’t establish the desired comfort level most prospects were looking for, especially if another accountant was competing for the business who did arrange to meet the prospect in person. She has now switched to face-to-face meetings and her conversion rate is greatly improved.

So that’s the first rule: meet with your prospect in person. OK, but where? There are several choices that can include your office, their office (or everyday environment), or a neutral site.

Generally speaking, the best choice is their office. I don’t have hard numbers, but anecdotally the vast majority of feedback I’ve received over the years strongly reinforces this conclusion. There are many reasons, e.g. it is their turf and they will be more comfortable, they are in an environment where they are used to making decisions, you are respecting their time demands by going to see them, you can see their operation and how they construct their surroundings, there will be real time access to necessary data (“Tom, where are we on the depreciation timetable for the crane?”), and more.

How about a neutral site? Typically, this will be a restaurant, but it could be many other settings, e.g. you decide to meet for a round of golf and talk. My distrust of these alternatives primarily stems from their potential for unanticipated distraction and/or disruption.

For example, if you go to a restaurant you may be placed next to a very loud birthday party, or it may be a table that is located too close to other diners. Or, the table is simply too small. In the golf example, your prospect may be quite competitive and even if they “win” the match, perhaps they will be furious they played very poorly that day. Talking business is the last thing on their mind. Also, depending upon the setting, you may discover it is daunting if not impossible to work with files, forms, notepads and other tools of the trade.

What if the prospect is an existing client and you wish to acquire additive work from them? The rules are similar, but not exactly the same. Again, the first choice is to personally visit them in their environment. A strong additional reason for this is retention … they’re already a client and every survey ever conducted among clients reinforces the value they place upon the personal attention you give them. And, just like when you are speaking with a new prospect, you will have a superior level of communication and that’s always good.

Because there is a strong pre-existing level of trust you generally don’t have to rely upon the same level of “proof” to make your case. For example, if you know your client is contemplating growing their business, your suggestion that she engage you to run some what-if scenarios that explore her expansion funding options will probably be “sold” on the basis of your descriptive narrative, not by carefully prepared examples of the sort of data you are talking about.

Therefore, you often have greater flexibility in how you choose to meet. A restaurant, happy hour after work, golf or even a noon time jog might do it.

That’s rule number two: meet the prospect at their office or everyday setting, especially if they are someone you don’t know. With a present client you have greater flexibility, but if you are unsure, you can’t go wrong by defaulting back to structuring the meeting as though you are meeting them for the first time.

It is all about the odds. You want the highest conversion rate possible for the limited time you have available for business development. Make the meeting in person and in their environment, embrace the methods we’ve looked at in many prior blog posts and you will make the most of your opportunities.