The Negligent Adviser

A partner (let’s call him Jimmie D) was recently informed by one of his better clients that he had hired another firm to work on an R&D Tax study, a consulting project with high potential to deliver a sizable tax credit. The owner of the business told Jimmie, who oversaw the account, how much he appreciated all the compliance work his firm had done for the last eight years. They were happy and had no plans to take that work elsewhere. He went on to explain how this other firm had just shown up with all this research about his business and that they had an idea that could be ‘worth a lot of money’. Apparently, the other firm had been tracking his business for some time, their case was very compelling, and the owner just had to take their advice.

Jimmie thought he may, at some point, let his partners know what happened, though for now he would just keep it to himself. His partners had been encouraging him to grow revenue for the firm through his existing client base. Jimmie knew this was the type of business his firm was looking for, yet he had never wanted to make his clients feel like he was selling them, so he often didn’t go out of his way to explain all that his firm had to offer. He had trusted resources inside and outside his firm to complete R&D tax studies and tried to explain that to his client now, but it was too late. The project was already underway.

As he stood up to leave, Jimmie tried to hide how he was feeling. He thanked the owner for his business and walked toward the entrance somewhat dazed, disappointed, worried and full of embarrassment. He knew at some level his client was frustrated with him. This potential windfall of tax credits was probably something that should have been identified years ago and brought to his attention. It could be construed by the client as negligence.

Scenarios such as this take place regularly in business, and no client, especially the coveted ones, are being left alone by other aggressive and ambitious firms. Competitors are constantly working on their own growth plans that involve a targeted approach of identifying ideal prospects, researching and prioritizing this list of targets, establishing connections, and strategically planning an introduction to the decision maker. After all, every firm’s best clients are another’s best prospects.

Jimmie D now had decisions to make in terms of a response to the troubling news he just heard. He could take no action, remain upset, spend some time getting over it, and potentially bump into the other firm from time to time at his client’s office. Better yet, he could take steps to ensure something like this doesn’t happen with any of his other clients. He knew what needed to happen and the work to get there was coming into focus.

Jimmie’s top 20% of clients produced roughly 80% of his revenue, so getting in front of them would be important. There is no telling how many of them were already working on special projects with another firm, or, on the positive side, how many clients have a unique issue or challenge that he could help with and would fit nicely into one of those special projects that had become a strategic priority for his firm.

Jimmie began to reflect on his eight-year relationship with this client and realized that, somewhat ironically, it had started by him taking the business away from another firm. He thought about what he could have done differently to stay on top of his client’s business and be more proactive by letting all his clients know how much his growing firm has to offer. These were great thoughts to continue mulling over. Soon he could have a larger discussion with his team to identify ways to improve client connection and growth.

Steps to take to grow client relationships in a strategic way:

Assemble the Team

Jimmie’s situation is a case of what can happen when clients just don’t understand the scope of what you can provide. Assembling a team in this situation to inform others empowers people to provide input for a plan and engage with clients to grow relationships. It is also a marvelous teaching opportunity for a team of people who will be vital in terms of forming and implementing a new way of doing things. You will gain their buy-in to be part of the solution, and, most importantly, you will not have to implement the plan on your own.

Establish Current reality

Assign someone to get the last 12 – 18 months of billings and determine who the top 20% of your clients are. Have them build a matrix that includes things like revenue of your clients, revenue generated for the firm from each client, list of services provided, industry by NAICS code, payment habits, life cycle of their business, and relationship with staff. You can also begin to identify clients that have the scope and potential need for additional services.

With the client list in hand, come back together and fill in additional information that continues to surface as everyone starts looking closely at each client and the relationships that are in place. Involve others outside this core team who will also have information, contacts to share, and potentially can be part of an approach in cases where their expertise and relationship is critical.

Develop a Service List

A thorough understanding of the menu of services for your firm will provide everyone an opportunity to match clients where they are in their business to the right services. Go to each client meeting with potential things to offer; however, never assume the client will have a use for what you are suggesting, until, of course, you have heard from them about their challenges and understand their true needs. Only then can you suggest a service that meets a current need or has the potential to bring added value (such as an R&D Tax study).

Create a Client Action Plan

So much of building strong relationships begins with being present and taking the time to talk and understand, so setting aside time to visit your most valuable clients will be important. The more strategic you are the better. You need to develop a clear Client Action Plan™ to include a prioritized list of which clients will receive a visit, key questions to ask that uncover their needs and wants, people who are responsible for scheduling and attending each client meeting, how much additional business will be achieved, and when the plan will be completed. Create a list of SMART (Specific, Measurable, Action-oriented, Realistic, Timestamped) goals for what you want to achieve. Work to develop the plan in a way that it can become a standard part of how your team operates all the time and not just a one-off event in response to a problem.

Each year you can kick off with strategic visits to your top clients and let them know about two to three other services (don’t go on about everything you can do) your firm provides that may fit a need for them. Over time, your clients will begin to understand you have great scope to do more than what you are currently doing for them, and they will approach you when they have a need outside the norm of what is happening now. Doing more work with existing clients also makes your firm and staff more efficient and valuable to clients.

Uncover Opportunity and Increase Your Value

A proactive, trusted adviser is what clients want so much, yet too often they are disappointed simply due to the fear many accountants have of coming across as too aggressive if they talk about other services they offer. Making clients aware reveals that you care, are thinking about their business, and have a true desire to help them. Existing clients are almost always the greatest source of new business and many of them need more help. They would greatly appreciate someone (preferably their most trusted adviser) spending the time to chat about their business and offering new ideas for ways to improve processes, reduce tax liability, grow the business, or preferably all of these things.

There is untapped potential in every firm’s client base. I was recently with a firm during a full day planning session and each person in the room was asked to write down just one of their best clients along with what additional services they could provide to them. The group identified 25 clients and, in total, they projected a 77% increase in the revenue generated from those clients through additional services they felt good about delivering to them. This is a firm with more than 40,000 clients, so the potential is enormous. They could literally double the size of the firm in a relatively short period of time if all they did was focus on expanding relationships with a small percentage of their current clients. No merger or acquisition would be necessary.

Hiding your talents and your firm’s capabilities from clients is no way to deliver value at the top of the Value Ladder. Most professionals do what they do because they enjoy business and have a chance to help business people by solving their toughest problems and improving their operation. Act in the new year by upping your relationships with clients, becoming intimate with their business, and expanding their understanding of all the ways you can help. Share your plan with the partner group and encourage them to consider a firmwide Client Action Plan™. You will be amazed at the positive things that will happen from this resolution.

Next Steps

For more information about Leadership communication skills and how to best employ them in your role, please Contact Us to schedule a complimentary phone consultation. The Rainmaker Companies can help you Grow Your FirmGrow Your Practice, or Grow Your Self.

Patrick Pruett – Executive Vice President at The Rainmaker Companies