Published in Accountancy Magazine 1st April 2004
Lawyers v accountants. Who’s the best at winning more business? A comparative survey provides some answers.
All organisations want to have their cake and eat it. Accountancy firms are no different. They want to keep their existing valuable clients and they also want to win high value new clients. The time and resource available for these business activities is, however, strictly limited. Unlike companies with their sales departments, accountancy professionals have a responsibility to do the ‘day job’ and bring in new and profitable business.
The PACE Partnership, a business development consultancy specialising in professional services firms, regularly carries out research into best practice in both key client management and new client generation. Our Creating New Clients Healthcheck was conducted in 2001 and again in 2003 and this article examines the highs and lows of the accountancy profession’s performance in the study.
Supported by the ICAEW, the Healthcheck was a comparative study which explored how professional services firms perform in key aspects of new client generation. It compared best practice within and between five key sectors: accountancy, law, consulting engineering, property, and management and IT consulting. Of the respondents, 15% were from accountancy firms and represented practices in the UK’s top 50.
Overall the accountancy profession performed better than their legal and property counterparts. They were more focused on what new business they wanted and had a clear and articulated vision of both the clients they desired and those they didn’t. Their new business and marketing activity was directed on driving their corporate or ‘brand’ message into the minds of the key decision-makers in their selected targets. Given the pressures and lessons that accountancy has faced post-Enron and now with Parmalat, it is not surprising that accountants are improving in this area. Other sectors such as the legal profession and IT could definitely learn a thing or two on goal-setting and targeting from the accountancy profession.
Having a clear focus on the clients you want for long-term growth and those you don’t is only the start of effective new client generation. Building strong relationships is a crucial part of the process and again accountants performed well here. This approach sees them focus their efforts on the relationship-build rather than ‘pushing’ a particular audit, a piece of tax consultancy or some other piece of work. Given the criticism accountancy has faced in the past about being too ‘pushy’ for new business, this approach should be commended and is likely to sit more comfortably with clients and fee-earners alike.
Looking good?
So does 2004 look good for new business in accountancy firms? Well yes and no. Certainly accountants scored themselves highly in the plans they put together to expand their client portfolios. Turning these plans into reality appears to be more challenging. Some might argue that this is just a symptom of the current economic climate. We could agree, however, we ran this research in 2001 as well. Interestingly given the turbulence of the last two years – the downturn in the economy post 9/11 and legislative changes such as Sarbanes Oxley – the 2003 respondents demonstrated a similar pattern of strengths and weaknesses to their 2001 counterparts. This shows that two years on, the same obstacles to new client creation are being experienced.
Prospering in 2004
So what are these obstacles, and how can accountancy firms seek to overcome them and make 2004 a great and prosperous year?
Well firstly, for a profession so skilled at systems and measurement, accountancy didn’t perform particularly well in managing the process of business development. From our experience with accountancy firms over the years, those firms that articulate their new business goals and establish a robust process to achieve them tend to win more profitable business than those who do not.
A new business process brings a number of benefits to these firms. If it is built around fee earners’ other responsibilities, it gives them a more realistic chance of achieving new business targets. By monitoring the inputs and outputs of the process, corrective action can be taken before it’s too late. Also, the process can focus previous resources such as money, fee-earners’ time and support staff’s time on the key areas that will bring the results the firm wants. Economies of scale can also be taken advantage of and duplication or missed opportunities avoided.
Many of our clients use the business process outlined below. It sounds simple and is obviously complex in practice. However, accountancy firms spend millions of pounds a year on marketing and business development. Spending this level is fully justified if it brings in new clients or helps to keep the key clients they have. Just like companies, accountancy firms find these activities difficult to measure. Establishing a business development process gives firms a better chance of achieving their goals.
So here’s a suggestion for 2004. Look at your current investment in marketing and business development. How closely linked is it to your firm’s short-term and long-term growth plans? How focused is it on creating a dialogue with the prospective clients you want to win? What could you do instead to set up a face-to-face opportunity with these clients? You may need more information about them to achieve this, but does your plan (and budget) take account of this? What steps are you taking to ensure your competitors are not successful in their advances towards your clients?
We would suggest that when marketing and business development operate quite separately within a firm, or if new client generation is perceived to be the role of a department (and not a firm-wide activity), accountancy practices tend not to gain the results they want from their investment in this area. From our experience, some marketing and business development plans tend to reflect what worked or didn’t work in previous years. When marketing and business development plans work in real time and reflect the target clients the firm wants to win and keep, they are easier to manage and measure. They are also more successful.
Spread too thinly
Before we conclude, a word of warning. Accountancy practices do have a tendency to spread themselves too thinly. So go easy on yourselves in 2004. While the firms in this study were good at setting out who they want to work with, they were weak in saying ‘no’ to potential new pieces of unsolicited and unprofitable enquiries. This reluctance to say no extended to invitations to tender. We have seen some firms establish a ‘bid/no bid’ system which has helped them enormously. This system is applied consistently to new business opportunities and enables those firms to decide whether responding to a tender is the best use of their time and money both in the short and long term. These firms have taken the brave decision that it’s OK to say no sometimes.
In the Pipeline
Here’s an overview of a business process used by many of our clients. It’s called the PACE Pipeline and is made up of six key stages:
1 Define the best prospective clients to achieve your firm’s goals.
2 Begin and maintain an effective marketing contact campaign with these prospective clients. To be effective, it needs to be measurable and adaptable.
3 Find an opportunity to create face-to-face dialogue with the key people in these target clients.
4 Develop a strategy and use tactics which are likely to turn the prospect into a new client (avoiding wasted effort on the firm’s part).
5 Protect your key clients from competitive advances and continue to secure more work from the relationship you build with them.
6 Prune unprofitable clients who divert your energies from those who you bring great value to and who bring value to your firm.
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© 2008 The PACE Partners LLP London England
