Burned in the past
Referrals as the source of new business
Expectations are a problem
Run the financials
Evaluate your position

Many have been burned in the past. They made a bad hire, tried something that did not work, or had an unpleasant result. These events caused all direct marketing efforts to stop.

Take a step back. If you have a bad meal at one restaurant would you no longer go to restaurants? No. Instead you refine the process. If you are daring enough to re-visit the same restaurant, you do so carefully by setting your expectations with the waiter to ensure a better experience. Most people just go to a different place to eat.

CPA firms who have been burnt should be talking to another marketing resource, but doing so with more guidance and knowledge so they can help assess and direct the marketing plan and effort.

Instead, firms depend on the discretion of referral partners as the only source of new business. Leveraging business development initiatives requires an ongoing effort. If referral sources dry up, new business opportunities will suffer. Below are a few reasons CPAs use to avoid addressing the lack of marketing activity in their practice. Do any of these examples sound like an experience at your firm?

1. We Hired a Marketing Coordinator. A part-time employee was added who knew little about the CPA profession and even less about the challenges of marketing a firm. Selling CPA firm services is a tough business for novices or professional salespeople if they do not have current CPA industry experience.
    
2. We Had a Salesperson Once. Someone with an insurance or financial products background promised the partners a quick sales cycle. The sales rep was highly commission-driven with a base salary. They stayed until the base salary stopped.
    
3. Staff Makes Calls. The task of marketing and selling to CEOs and CFOs was given to administrative staff as “filler” work without any training.
    
4. Public Relations Agencies. An engagement to build image, create awareness or get the firm in the newspaper was attempted with little to no success.
    
5. Consultants. A great strategy was developed, but the firm was left to implement the plan on their own. Before starting an effort, ask how the marketing will be conducted after the planning is done.
    
6. Direct Mail. Over the years one or two direct mail attempts were made with little to no response; or the firm sends a newsletter but questions the value. Pull out the old letters and review their content and the targets you sent them to. Careful scrutiny by today’s standards may uncover why response was poor.
    
7. Telemarketing. Some firms think it projects the wrong image. Others hire $10 an hour people, which probably will project the wrong image. Telemarketing is labor intensive and should be implemented by individuals familiar with the CPA profession. Be wary of appointment setters who are paid based on the number of appointments set.

Expectations are a problem. Good clients won’t switch from your firm without a serious fee, service or personal issue. If the goal is to target better prospects, repeatedly market to them and give them reasons to think about the advantages of using you as their provider. You need to constantly position your firm for this opportunity. Many firms fall short in this area – they do not develop the reasons or build the time allocation into the sales effort.

The majority of firms have grown from referrals. They’ve never invested or became familiar with direct marketing techniques commonly used in most businesses. As a result, paying for marketing services is a concept that is difficult to comprehend.

The average percentage of revenues spent on marketing ranges from one to five percent. A firm with $1,000,000 in revenues should spend $10,000 to $50,000 a year on marketing. How they spend it is one issue, but lack of spending indicates a long-term erosion of the practice.

Firms invest in computers, and keep re-investing in technology to keep their practice competitive. Lack of investment in business development initiatives indicates a short-term focus that hurts long-term profit objectives.

Run the financials. CPA sales are annuities. If a firm spends $25,000 annually in marketing expenses and gets only $25,000 a year in sales, they still come out ahead in year two. This example is weak. It assumes only $25,000 in sales, that no referrals come from the new client added and there are no labor costs to service the client. First, most firms should be able to absorb the $25,000 in revenues without adding staff, so the no labor assumption is correct. Second, new clients present referral opportunities. Finally, if you pay $25,000 and have a focus, the results should be closer to $100,000 plus in new business, which changes the financial perspective.

Evaluate your position. What are you trying to accomplish? Are you trying to grow, add better clients, survive or start grooming long-term succession? What steps have you taken to ensure objectives are being worked on? There are many ways to make progress. Passively waiting for opportunities in this dynamic CPA marketplace is not one of them.

About the Author
Bob Lewis is the founder of Visionary Marketing, helping CPA firms develop marketing strategies to target new clients, increase existing client revenues and build referral partner networks.

Marketing articles brought to you by MACPA Corporate Sponsor, Standard Federal Bank.