Even Good Business Developers Can Strike Out

A CPA – we’ll call him Tom – had a great prospect handed to him by Ray, a consultant who has been a reliable referral source for many years. The prospect was a good size commercial interior design firm with historic accounting billings in the $20,000 range.

Even better, Ray was going to be at the meeting where Tom’s firm would be evaluated as a prospective provider of accounting services. Further, Tom’s competition was a local accountant who Tom knew did not have nearly his familiarity with design firm tax and accounting issues.

The topping on the business development cake was that Tom knew Ray had given Tom’s firm an excellent recommendation because Tom already served several of Ray’s design and architectural clients, all of whom were satisfied with his firm’s services.

The meeting attendees would consist of Tom, Ray and Joyce, one of the prospect’s owners.

Tom was unable to see the prospect’s financials and tax returns until the beginning of the meeting. This was not a problem – in fact it was probably an advantage – because of Tom’s nuanced knowledge in this area. He scanned the documents and quickly confirmed the prior accountants had not taken advantages of several strategies to reduce the prospect’s tax exposure.

Knowing it was highly unlikely his competition would know about these solutions, he exploited this knowledge gap by explaining to Joyce how her firm could improve her bottom line.

Ray, while not an accountant, has a sophisticated lay understanding of the subject, and with Ray’s occasional input Tom was able to illustrate in concrete terms why Tom’s firm was the desired choice for Joyce’s design firm.

The meeting adjourned cordially and on time. Tom was told a decision would be made in a day or two. Tom has a strong record as a successful business developer and walked away with a very positive feeling.

Two days later Tom was told by Ray his firm didn’t get the engagement.

How could a “can’t miss” prospect, a potential contributor of $20,000+/- to the firm’s revenue, get away? What went wrong?

If you have been reading all of the approximately 60 prior postings of this blog, you already have a good idea of why Tom’s competitor got the work.

Let’s begin with a truism you MUST be aware of: unless your prospect is exceptionally knowledgeable, or the engagement has a highly unique nature to it (I have an investment … it’s a fractional share in an offshore oil rig owned by Royal Dutch Shell … do you know anything about that?), they think all CPAs are capable of doing a decent job.

As it turned out, Joyce had taken some notes as Tom made suggestions to her and when she met with his competitor, Charles, she asked Charles if he was aware of the various approaches. Ray reported that Charles simply nodded and smiled, muttering an occasional, “Yes, that’s standard treatment,” and “I can see he (Tom) is up to speed.” Ray knew he probably didn’t have a clue, but it wasn’t his place to say something. And Joyce never considered that Charles and Tom might have a significant knowledge gap between them. After all, both their cards say CPA; both have accounting degrees and both practice accounting in the area. Tom’s demonstration of knowledge accomplished nothing.

The second factor is that there was a reason why Joyce’s firm fired the prior accountant. Why was that? What behavior do they need assurances will not be repeated by the new firm? Tom never asked.

Charles asked Joyce what happened with the fired firm and was told they wouldn’t return calls, had missed a couple of deadlines, quoted a five figure fee for a project and then came in 50% higher with no advance warning, and never really demonstrated any particular interest her firm’s business. Charles ticked off the reasons why that would, of course, NEVER happen with his firm and made a real point of emphasizing that Joyce could call him anytime, no matter the problem, etc., etc.

You MUST discover the prospect’s needs, desires, fears and motivations. Those factors are what they feel are the most important considerations. Put simply, they have an itch and they’ll hire the outfit they think will do the best job to scratch it.

Tom knows all this. He’s an excellent business developer and has a large and profitable book of business. But, this so-called “can’t miss” turned his head, got him away from the basics, and reminded him how you can never ignore the basics.