The success of any accountancy firm depends on the quality of its client base. While business opportunities often exist within the current client portfolio, there are formidable barriers to realising them.
Whether these barriers are legislative (for example, the Sarbanes Oxley rules), or occur as a result of clients being keen to ‘keep their options open’, it means that the riches to be had are not boundless. New clients must be won.
And if the current client base is not ‘ideal’ then the best clients must be kept and new ones found, with a focus on designing the firm’s client base for the future.
And yet research has found that the key skills needed to improve accountants’ success rate in new business creation fall woefully short of the mark. Listening and learning how to say no to unsolicited and unprofitable business is just as important as getting in new work.
The research, from The PACE Partnership’s ‘Creating New Clients Healthcheck’ explored how professional services firms perform across 10 core aspects of new client generation. Supported by the ICAEW, it compares best practice across five key sectors – accountancy, law, consulting engineering, property and management and IT consulting. Around 15% of respondents were from accountancy firms in the UK’s top 50.
The research found that accountants do well in defining who they do and don’t want to work with, but managing the process of winning these clients is a struggle.
If you do it well you can avoid cycles of feast and famine and achieve the right balance of time and effort invested in carrying out fee-earning work and in developing work for the future.
Interestingly, the most successful firms manage the level, focus and quality of activity going into new business development as accurately as they record fee income and profitability. This helps achieve the efficient use of limited marketing and development resources.
In addition to client relationship management systems that provide up to date details of new client creation activity, there are ways to measure opportunities in the pipeline and forecast the financial outcome of these opportunities.
Intellectually at least, most accountants understand the need for an effective framework to help them make best use of their business development time. But one size does not fit all. And even with a framework in place, it’s not uncommon for highly independent and busy fee-earners to fight the process.
Successful firms build business processes around their fee-earners’ commitments, often working alongside other systems to avoid ‘reinvesting the wheel’ and to motivate take up.
Highly-developed skills are as fundamental to success as a clear vision and an effective process – ignore the mix at your peril. Those firms that perform well at winning new business also invest time and energy in equipping their people with the right skills to do so.
But while fee earners are trained to develop their technical skills, the competencies needed for new business development are rarely part of the curriculum.
Unleashing unskilled business developers on a large number of key prospects will not only mean lost opportunities, but will also damage the firm’s reputation. And without training, even the most inspiring vision and the practical process will fail to inspire fee earners to carry out actions to which they feel ill suited.
The key skills to developing any relationship are active listening, positive body language and encouraging words, phrases and even noises. Some take notes and then unbundle key words and phrases to summarise and double check that they have properly understood what has been said. Above all they know how to show empathy with the client’s situation.
But start as you mean to go on. This interest needs to be maintained throughout the business development process, a skill that firms did not rate themselves highly on in the 2003 survey. As a result they were less able to produce ideas and proposals that were relevant to each opportunity. They also struggled to gain the appropriate level of commitment from the client before attempting to move to the next stage of their relationship. This resulted in a lack of confidence when presenting their fees.
Respondents appeared to find it difficult to say ‘no’ to a piece of unsolicited and unprofitable business. Those who were better at this had a clearly defined bid / no bid process, which ensured they never went after ‘no hope opportunities’.
The significant economic changes that have taken place in the last two years should be taken into account. But panic can cause a ‘scattergun’ approach to new business generation and may lead to fee-earners chasing everything in the hope of winning something. With finite resources at each firms’ disposal, this rarely brings long-term profitable growth and invariably leads to adequate rather than brilliant performance.
Some firms spread themselves too thinly. Those firms that avoid short term ‘panic’ and focus of long-term business strategy are better able to use what resources they have to win specific profitable clients.
But we shouldn’t ignore the strengths that the profession displayed in the research.
Respondents demonstrate a clear and articulated vision for the future. And unlike other professional services sectors, they have clear goals and objectives for new business growth and an agreed list of target clients that fit the vision and objectives of their firm.
Firms can learn from best practice in the sector. By developing processes to manage the ongoing flow of profitable new business opportunities, and by developing key ‘sales’ skills in their staff, the accountancy profession can look ahead to a prosperous future.
- The circle of success Published 5th June 2008
- Holding onto your Key Client Relationships Published 20th July 2009
- How to reel in the right fee Published 5th November 2008
- What makes the perfect pitch Published 31st May 2008