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Great blog post from Jean Caragher of Capstone Marketing that I thought was worth sharing. Accountants typically identify referrals as their greatest source for new business, and here are her 12 tips for more referrals.
1. Identify the attorneys, bankers and other service providers of your current clients. Then, make contact with these referral sources.
2. Evaluate your current referral network. How are you keeping track of your activities? Who is sending you leads? This will help you prioritize who you need to spend time with.
3. Organize small scale networking events or mixers with referral sources you want to do business with. Invite a group of bankers (from the same bank) or attorneys (from the same firm) or both groups to your office or other appropriate venue to learn more about each other’s businesses and the types of desired new clients.
4. Provide networking skills training for your entire professional staff. Then, reinforce the training by accompanying them to networking functions and referral source meetings.
5. Teach your entire professional staff how to build their networks. Their base of contacts includes co-workers, clients, former clients, alumni, competitors, classmates, family, friends, neighbors, sports friends, parents and friends of their children, and church or synagogue contacts.
6. Collect client testimonials to use in your promotional materials, proposals, and website.
7. Remind your clients that you are interested in new business referrals. The best time to ask is after receiving a compliment.
8. Add networking activities to the performance evaluations of your entire professional staff. Reward them for success.
9. Research the organizations in your market that correspond with your client base and where you need to be seen. Then, be seen.
10. Call people in your network to see how they are doing, invite them to lunch, or discuss a current event in your marketplace. Haven’t talked to them in a while? If you’ve worked together before follow up to ask about the results of the project. Ask for their advice. Or, simply say, “Something reminded me of you …”
11. Ask for leads! Be sure that you have a description of the types of business that you’re interested in to help your referral sources.
12. Support your face-to-face networking with a LinkedIn profile. Be sure to coordinate your LinkedIn strategy with your firm’s overall marketing strategy. Be consistent with your firm’s description, etc.
As I was reading the post I was reminded of the great book, Breakthrough Business Development, which suggested instead of using the term “referral” switch to “introduction” or “recommendation” especially with clients. Their research and experience suggested that clients felt pressured when the term referral was used, however they were much more inclined to introduce their CPA to someone. Give it a go and see how it works for you.
I was also reminded of the great interview I did with Jean maybe last year. Below if the first track of Yes! You do need marketing.
I’m delighted to be one of the key note presenters at the 2012 Practice Management Conference being presented by Office Tools Pro. There’s a great line-up of speakers as well as interactive training sessions over the three day program. It’s on at the Flamingo in Las Vegas June 21-23.
I’ll be presenting on day 1 (Tuesday June 19) on the key trends and issues facing the profession which will set the tone for the next two days on how to manage your firm for growth. There are great opportunities for the profession and this session will give you the road map to make the most of them.
My partner here at 2020 Damien Greathead will also be presenting. His first session will focus on how to create your marketing strategy, and his second break out session will look at how accountants can make the move to coach for their clients and help them improve their business performance.
It promises to be a great program, so come along and say hi.
I had the pleasure of interviewing Bill Carlino recently. Bill recently left his post as Editor-in-Chief of Accounting Today to join the team at Transition Advisors. As the former Editor-in-Chief he has a unique insight into the key issues the profession faces. Here’s track 1 of the interview. Premium member will be receiving the next edition of the Audio Series shortly.
Just got an email from Charles Hylan over at the The Growth Partnership who put together The Rosenberg Survey. Of the 408 firms that participated in their 2011 survey, the average net income per partner was an astounding $342,494. That is fantastic. It’s higher than what I would have thought, but certainly not unrealistic to achieve. In fact since it’s an average, some partners are earning much more. Measuring and monitoring performance is one essential step to improving your firm’s financial position. Obviously a number of metrics make up the end result of net income per partner, but the firms that outperform the pack, are those that measure, monitor and mange their performance religiously.
One metric we believe that is often overlooked is daily sales. Every other business knows exactly what the daily sales are, why not an accounting office? It’s too late at the end of the month or quarter to do something about missing the monthly/quarterly sales target.
We’ll be talking more about key performance metrics at our Best Practices Conference for Sustained Growth & Profitability, but what do you think about monitoring daily sales?
We also highly recommend participating in the Rosenberg Survey. Not only will they benchmark your firm, but you’ll get a ton of great insight into what the best firms are doing and how you can improve your firm’s performance. Sometimes the initial benchmarking process is a bit scary, but the good news is that it’s onwards an upwards from there. Once we have a starting point, we can work on work on what you want to achieve. You can find out more about the survey at www.rosenbergsurvey.com.
The Best Practices Conference is a 2-day conference that focuses on what you need to do in your firm to achieve sustained growth and profitability. The vast majority of firms are not growing, or certainly not growing at the rate they want to. The reason for this is they are doing the same old thing and hoping for a different result – I believe Einstein defined that as insanity.
There are, however, firms that are enjoying double digit growth. These high performing firms have fundamentally changed how they do business. And this 2-day conference will show you exactly how you can propel your firm into double digit growth. You will need to change and try new things. The good news is that what we show is proven and we’ll cite numerous firms around the world who have successfully implemented these initiatives.
The early bird discount of 25% closes on Friday May 18. The program is 100% satisfaction guaranteed and eligible for 8 hours of CPE per day. if you can’t make both days, there is a single day registration available. I hope to see you there.
I’m sure if you read this blog, then you’re also reading The Marc Rosenberg Blog, authored by my good friend, not surprisingly, Marc Rosenberg.
This week in the lead up to his Q&A on iShade.com he gives us his 5 Secrets of a Great Partner Compensation System.
First, partner compensation is the single most sensitive subject to partners. It’s depressing and disturbing when a partner feels the income allocation is unfair, performance is unrecognized or he/she doesn’t have a clue how the system really works.
Second, to quote Andy Grove, former Chairman of Intel: “If people are concerned about their absolute level of compensation, then they can be satisfied. But if their focus is on relative standing, then they can never be satisfied.”
Third, partners are forever in search of the Holy Grail of partner compensation. The better mousetrap. The one best system that’s lying out there, somewhere, waiting to be discovered.
It’s downright hilarious that CPA firms think their profession is unique to the business world when it comes to firm management and compensating key people (the partners). Here are some observations based on my experiences consulting with hundreds of CPA firms on partner compensation (firms with annual fees over $20M are much more effective at these practices than those under $15M):
Compensation systems must be performance-based. What can be more sensible? One should be able to earn more money by accomplishing more and conversely, one’s pay should suffer if performance is lacking. When performance doesn’t impact compensation, it demotivates the better performers and encourages others to coast. Sooner or later, mediocrity prevails. However, a fair amount of firms continue to allocate part or all of their income based on a pay-equal split, ownership percentage or other method that fails to align pay with performance. Money isn’t the best motivator and it certainly isn’t the only motivator, but it does matter.
Helping staff grow must be an important factor in allocating income. It’s indisputable that CPA firms need highly trained staff with leadership skills. Firms often cite the adage that their people are just as important as their clients. The partners are the only ones who can develop and mentor the staff. Yet rare is the firm compensation system that gives even token recognition to the impact made by partners in retaining, training and mentoring staff and helping them grow.
Strategic planning should play a critical role. Partners’ contributions to the firm in achieving its strategic plan, vision and goals should be an important factor in allocating income. But we rarely see these efforts acknowledged. It’s no wonder that CPA firms struggle with strategic planning: there is very little incentive for partners to do what their firm needs them to do.
Compensation levels of partners should reflect both historical and current performance. It’s common for partners to build up impressive personal production statistics, especially the sacrosanct “book of business,” and then essentially rest on those laurels, contributing relatively little to the firm’s growth and improvement in subsequent years. The best way to address this is by splitting compensation into two parts: a base, recognizing historical or cumulative achievements, and a bonus that rewards current performance, the latter essentially serving as a “what have you done for us lately?” factor. For this to work, the bonus must be meaningful. In other words, a partner should definitely “feel” the impact of a small or zero bonus. What is meaningful varies with a firm’s profitability. At firms with average profitability, the bonus should be at least 20% of total compensation. At highly profitable firms, the bonus should be 25-40% of the total.
Individual production shouldn’t be weighted so excessively as to render all other accomplishments unimportant. At many firms, when it comes to allocating partner income, Finding (client origination), Minding (size of client list managed) and Grinding (billable hours) trump other important aspects of partner performance. Intangibles such as firm management, helping staff advance and grow, teamwork, loyalty, creating specialties, delegating work, technical skills and being a good corporate citizen are frequently overlooked. One of the main reasons for this is CPA firms’ steadfast adherence, either consciously or subconsciously, to the principle that it’s more important how a partner performs individually than as a key member of the firm. Firms are legendary for handsomely rewarding partners for posting strong production statistics while tolerating egregious weaknesses such as being a poor team player, abusing staff, refusal to be held accountable and failure to follow the firm’s policies and procedures. While few would argue the significance of partner production, firms make a big mistake when they fail to give meaningful recognition to intangible aspects of performance.
So there you have it. In a few paragraphs, I’ve summarized several critical partner compensation issues that could easily take an entire book to properly address.
Marc’s comments are spot on. Here at 2020 we work with small-medium sized firms and I agree that in larger firms it is easier to adhere to these guidelines than in smaller firms. One reason I believe is that many firms are too top heavy and partners are still very much responsible for production that they don’t have time to give to the other considerations of growing and managing a successful firm. These firms and many others are stuck in the ‘eat what you kill’ mentality. Unfortunately if they aren’t able to break from this, they’ll keep on this same path and work themselves into the ground.
I sat in on a webinar by an Australian consultant Rob Nixon recently and he made a great point which I have long supported. He said the time for running a practice is over, we’ve been practicing for too long, it’s time now to run a business. I think this change in mentality is something we all need to think about. Outside of accounting, no one would run their business like we run our practice. And how we address owner/executive compensation is no different.