The following bit of practice management wisdom is from Craig Weeks. As the principal
of cpaprofitplus, Craig resides outside of Portland, Oregon and works with clients throughout the United States ranging from solo practitioners to national firms.
Craig is also on the iShade Faculty.
With April 15th looming on the horizon, how can a frazzled practitioner add a marketing ball to the many others they are simultaneously keeping in the air during the busiest time of the year?
Here’s how: If you have – literally – just a couple of extra minutes you can spend on selected client files there is a killer marketing technique available that can generate significant additional revenue in 2012.
I call it the “Stickie” (my name for 3M Post-it® notes) technique, and if that sounds familiar I’ve mentioned it in several other blog postings. What follows is a how-to explanation.
The following assumptions are in play: a) we’ll assume you are an accountant in public practice, b) you serve a mix of individual and business clients, c) about a third of your book of business are the most desirable “A” and “B” level clients, d) you want to add more billable hours to your practice and, e) for simplicity purposes, let’s further assume you will prepare 100 returns this tax season.
The first question is which client files will receive the Stickie treatment and which won’t? Since the goal of the technique is to obtain more business from existing clients, that brings a couple of characteristics immediately to the forefront. The first is that the return should be of some size and complexity. Which means it will reflect a relatively high income, and/or a business with real revenue, expenses and prospects. Another prism to view the file through is whether it has a strong potential future … for example, a 1040 client of yours could be introducing a start up to the area and in spite of its recent Grand Opening it is already showing great promise. We’ll call the foregoing prospects our “Stickie” clients. At the other end of the scale are those clients whose returns reflect simplicity, relatively low numbers and/or little potential for an upside.
As you work your way through the various preparation tasks related to the client’s tax filing, consider whether or not the return and its underlying circumstances suggest that it qualifies for your Stickie effort. At the end of the day perhaps 20 or 25 will prove suitable out of your hypothetical 100 clients. You can, of course have more or less. It’s your call.
When you finish working on an appropriate file immediately ask yourself if you saw any problems. For example, if you have several dentists as clients and the file you just worked on feels like it has a lower pre-tax income that you would have expected based upon the gross revenue, then grab the last P&L and take a look at the cost structure. Margin too low compared to your other clients? Now it’s Stickie time.
You grab an everyday 3M Post-it® note; one that’s big enough to write a couple of sentences on, and in the example above write, e.g. “Glenn, your expenses are higher than I expected. I think you may be leaving some money on the table. Give me a call.” Then sign your first name and put the Stickie next to where Glenn will sign his return.
The response rate varies, but most accountants get around 75% call backs. The prospective meeting with Glenn is a business development opportunity.
When Glenn calls, you say something like, “I’d like to go over your P&L and return with you. I think you can improve your results. How about lunch Maybe next Tuesday?”
Or, one of you can go to the other’s office. Whatever is convenient. But, the important thing is to have a face-to-face meeting. This isn’t only because of the Stickie process, but also because Glenn is an important client and survey after survey points out that, in the absence of poor service, clients state the reason they switched to another accountant was because they didn’t get enough personal attention/love. Here’s a chance to do accomplish both.
Begin by using his financial docs to point out how his results appear to pale by comparison to your other dental clients. Then ask him to speculate why it is his expenses are higher. Ask more questions. Get specifics. When you’ve talked for a while and you have a clear picture of the situation as he perceives it, ask yourself how you can help Glenn? What data or information could you provide that would be of value? For example, what if you he said that his payroll is somewhat high because he just staffed up to begin doing more of a certain type procedure? Your response could be, “What might be valuable Glenn, is if we ran a what-if analysis so you can understand more clearly how much more revenue it will take to bring up the profitability. We might also want to break down the operating margin on other procedures so you can be informed about what added revenue in those areas really means to your profitability. That information could be vital when planning your marketing budget.”
The point is that once you know the problems in Glenn’s dental practice you are in the position as his accountant and advisor, to propose consulting, advice and planning solutions that are of value to him. This process isn’t some kind of trick. If Glenn pays you $2,000 but doubles the effectiveness of his $20,000 2012 marketing effort because he’s now focusing upon the more profitable services he offers, that has a huge ROI.
You have transcended the role of tax preparer and additionally become Glenn’s sounding board for all manner of future decisions he will make. If he invests in a building how will it affect his taxes? What are the tax ramifications of how he takes title? What purchase terms make the most sense in light of his present business circumstances? How much will it cost to open a second office? How quickly could such an office become cash positive? Etc. etc.
Yes, the idea of the Stickie program is to get more short-term revenue from existing clients, however, what’s even more important is that it sets the table for you to add revenue that opens a gateway to a closer relationship with the client, providing a broader range of services, maximizing the probability of retaining the client, enhancing the potential for quality referrals, and making for a more interesting practice.
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