Expanding your firm’s business; hunt where the ducks are

There are many factors that affect your sales, but the four most important are:

  1. the number of clients you have
  2. the number of services a client purchases
  3. the frequency with which clients purchase additional services
  4. the length of time clients remain with you

Many accountants concentrate their marketing efforts only on the first of these – increasing the number of clients. They spend their marketing budget on direct mail, seminars, or other marketing projects designed to bring in new clients. They then start the next marketing campaign to attract another group of new clients.

What they overlook is that developing a client you already have is much easier than attracting a new one. Many accountants would expand their business more rapidly, and at less cost, if they concentrated on the last three points listed above. Of course, you should never neglect activities that attract new clients, but equally you should remember that existing clients are like a mine that has many rich veins to be exploited.

Increasing the number of services a client purchases

Generally when you sign new clients, especially cost conscious ones, they require only a limited range of services from you. During the initial period you should over-perform on the services you provide, and gradually build up their confidence and trust. At this stage, regular contact with the client is essential if you are to understand their broader and longer-term needs.

You should be able gradually to build up a focused database that records each client’s needs and expectations. Once the relationship is established, you can begin to introduce other services to your clients. You can suggest extensions of existing services, or completely new services.

One way to deepen the commitment of existing clients is to offer discounts for additional services. This is best done by offering a larger ‘package’ for the fee, rather than discounting the fee on a particular service. The marginal cost of offering slightly more service is usually far lower than the cost of discounting fees.

Plan NOT to lose clients

The fourth consideration, how long a client remains with you, is of utmost importance. Avoid complacency with your existing clients – and never take them for granted. To repeat, it is much easier to develop an existing client than it is to sign a new one.

Four types of prospects

Think of your potential market as consisting of two groups: existing clients and potential clients. Each of these groups in turn may or may not be aware of a current need for your services. So you have four types of prospect:

  1. Clients who are aware of a need
  2. Clients who are not aware of a need
  3. Non-clients who are aware of a need
  4. Non-clients who are not aware of a need

If you had only $1 to spend on marketing, the group that would be most likely to generate the greatest return would be from the clients who are aware of a current need for your services.

The group that would show the worst return on that $1 would be the non-clients who are not aware of a need. Yet accountants spend most of their marketing resources on non-clients who are not even aware of a current need!

Fortunately, accountants have more than $1 to spend on marketing, and so should invest some marketing resources in all four types of prospect. Still, the point remains; the best return on marketing investments will be from existing clients. Harvesting this rich crop of fertile sales territory should be at the top of your marketing plan.

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