For some reason, the accounting profession is riddled with marketing myths. Below are six common myths that do contain an element of truth, but can be quite damaging if taken too seriously.
The best source of new business is from new clients
This theory involves your new clients being so ecstatic with your service that they will gladly refer you to other clients. In fact, it is easier to sell to your current clients. The referral relationship is more established with current clients and they are more likely to purchase additional services. Sales and marketing expenses are cheapest when cross-selling. It is far more expensive to get a new client than to keep an old client.
You must keep all of your clients
It is unfortunate that many accountants feel that they should keep all of their clients. Many also feel that all fees are equally important. The accountant who feels that he must keep all of his clients is buying market share, and is failing to capitalise on potential fees. Buying market share is a failed marketing strategy and is not advisable.
Your biggest customers are always your best customers
This is a dangerous myth, and probably the one most invisible to accountants. Many accountants are tempted to attract and keep large clients, typically because he or she feels that fewer client relationships are easier to handle and that the clients are more prestigious. On the surface this is true. But it is essential to avoid a situation where clients become the tail that wags the dog. A client whose departure could take away an appreciable part of the practice income is potentially dangerous.
Personal sales calls are the best marketing weapon
Personal sales calls are very expensive, very time consuming and amount to a hidden cost. The best marketing weapon is an ability to develop qualified leads. With qualified leads, you can focus your sales skills and develop more business. It is more important to uncover a good lead than to be a great salesperson, because good leads are more difficult to come by.
An accountant has to match a competitor’s rates
This myth suggests that in essence, an accountant is a victim of the pricing structures of other accountants. This is potentially a very damaging misconception. Accountants are perpetually concerned with their billing rate, wondering whether they are charging enough, or too much. The short answer to fees is that they are worth what your clients think they are worth. The real answer is that your quality and skills exist apart from that of your competitors. If the fee level is too great a component of a client or prospect decision, then that is not a client or prospect that you need.
Price is the consumer’s ‘bottom line’
In a recession, pricing becomes paramount. Pricing takes on additional importance during a recession, but it does not turn a normally value-conscious client into a generic, “commodity-pricing-only” company. Clients who seek a low fee will seek it in good times and bad. Clients who seek value for their fees will seek it in recession and boom times. These clients realise that it is more important during a recession to have a quality accountant. It is not time to look for a cheap advisor when the margins are tight.