Should Your Accounting Practice Use Professional Marketing Services? Part 2
Part 1 was posted last week. Here’s the link.
Q: What should I look for in a marketing team to maximize my return on investment?
A: Accountants sell knowledge and expertise. That’s different than a product, and it requires a different approach to marketing. To get the best results from the smallest investment of resources, you’ll want to work with marketing professionals who routinely work with accounting practices. Often, that means a small to mid-sized firm, although you may also discover the desired focus and experience within a larger marketing outfit.
It’s important to find the right “fit” when considering marketing firms. This is the same thing that occurs when a prospect considers hiring you for accounting services … is there a natural rapport; does it feel right? If not, it’s a deal breaker. This is a personal quality that only you can measure.
Does the firm really listen to what you’re trying to communicate or do they seem to have a preconceived cookie cutter idea of what you should be doing? Are they trying to understand what’s unique about you, your practice and your clients? Do they understand your goals beyond the generic idea of growth? Do they respect your budgetary limits for time and money? Are they willing to show you how to gauge the effectiveness of the marketing strategies they’re recommending?
Even if all those conditions are met, sometimes it still doesn’t feel right. Respect your intuition, and keep looking. When the fit is right, you’ll be comfortable telling your marketing team the information they need to do the job and confident that they know what it is you’re shooting for. Then trust your team to make it happen.
Q: How do I know my marketing firm is doing a good job?
A: There is no agreed upon set of metrics that will tell you if your investment will pay off. And, there can be a significant time gap between effort and results, so simply tracking revenue is important but isn’t the answer. However, there are some commonly used measurements that will get you started in terms of solving this challenge.
Of course you are going to count new leads, but are they high quality/desirable leads? Are you tracking how quickly and effectively the firm is responding to them? Conversion rates are crucial … what percentage and by whom? Is follow-up occurring and is it timely? Are the new clients profitable? Is your entire team on board and effectively spreading your marketing message? Does your referral network understand your message? Where are your referrals coming from and are you nurturing these relationships? What about your web site – are you routinely applying analytics to gauge its effectiveness? Analytics can also measure newsletter, blogging and social media activities and effectiveness.
There are dozens of variations; professional marketers will be able to suggest those most suitable for your circumstances.
Thanks again to Bonnie Buol Ruszczyk, owner of bbr marketing in Atlanta, GA, for her insights and knowledgeable responses to my questions. Bonnie helps clients all over the country build their practices.
Here’s a real world example of how employing professional marketing helped a firm …
Dan (not his real name) has a typical 1040/small business practice near Galesburg, IL. After several frustrating years of stagnant revenue accompanied by a couple of unsuccessful home grown marketing efforts, he decided in the fall of 2010 to get some help from a small marketing firm in the Chicago suburbs that specializes in professional service clients.
April was assigned to his account because she had accounting practice marketing experience and together they put together a plan that Dan felt was affordable. In general, the plan emphasized focusing upon expanding two small business niches, nurturing his referral network and creating a more significant presence within his local business community. They kicked things off in November 2010.
April also felt Dan’s conversion skills needed upgrading and argued that while obtaining more leads would – all things being equal – add more clients, combining more leads with a higher conversion rate would really make a difference. She encouraged him to take a sales class.
Dan’s web search led him to me and cpaprofitplus. He told me about his situation, and using Skype I taught him how to increase his conversion rate (and coached him about how to improve his client retention rate).
Between the marketing firm ($6100) and the Skype/coaching sessions ($800) he invested $6900. Now the money question: did Dan’s investment pay off?
In 2009 and 2010 Dan averaged 20 good leads each year (Dan counts “good” prospects/clients in his mostly 1040 practice as those with estimated/real annual billings of at least $1200). Of those, he converted roughly half, or 10 new. He lost almost as many in that time period due to attrition from changed circumstances, moving, retirement, etc.
Implementing his new marketing plan, he generated 25 “good” leads in 2011. Of those, he converted 17, or approximately 68%. So, 20 to 25 leads and 50% to 68% conversion rate, neither all that big by itself, produced a huge 70% increase! Kind of like compound interest.
Dan is pleased that the marketing has generated a noticeable increase in small business work. He believes these 7 “extra” clients added approximately $20,000 to his 2011 revenue, and he further states that his pre-tax income is approximately half of that. In short, he’s essentially covered his costs in one year. Plus, none of the 7 have left, so in 2012 he again received the (roughly) $20,000 plus however much revenue was produced by the most recent crop of “news.” Improvement on top of improvement … again, kind of like compound interest.
He hasn’t finalized his 2012 results as this was written, but Dan says he continues to obtain more small business clients and that his 2012 revenue increase has matched or exceeded 2011. April continues to advise him periodically.
So you see, a relatively small increase in good leads and conversion rate equals a dramatic increase in revenue! Moral of the story: talking to a marketing firm can pay real dividends. Check it out.
As always, please provide input. I’m especially always interested in hearing what’s worked (or didn’t work) for you so I can pass it on to other practitioners. Like Dan, you can remain anonymous.