Unfortunately, my subscriber had not been listening when we discussed internal marketing, upselling and cross selling. All of his discussions with his client had been about the annual tax work he was doing for them, and the related tax planning that went with the tax preparation.
He had even taken the client to lunch and worked with them at local charity events.
This problem happens all the time at small local firms. The practitioner works with clients and just assumes that the client is aware of the different services that he or she can and does provide.
I am constantly hearing stories like this.
Most practitioners recognize that it is easier and cheaper to sell additional services to existing clients than it is to acquire new clients, especially if the existing client is happy with the service they are now receiving.
These same practitioners also say that if they were able to recognize the additional revenue opportunities that existed among their current clients, they would have all the work they could handle. At a minimum, the lowest increase that has been mentioned among existing Practice Builder Publishing subscribers is an increase of 10% in revenue.Most practitioners recognize that it is easier and cheaper to sell additional services to existing clients than it is to acquire new clients Click To Tweet
Think about that. Most firms can easily increase their revenues just by recognizing the additional opportunities that their existing clients present.
But, the greatest increases come when a practitioner works at cross selling and succeeds at it by providing more value to their clients..
More value is the key word.
It’s not just about making a sale, it’s about providing more value to your existing clients in a way that causes them to willing engage you for the additional services that will provide this value. The value you provide to your clients is what you are ultimately judged on, and what encourages referrals and growth.
Some clients see such value in being able to get a complete range of advisory services from a single provider that they will willingly shun firms that do not appear to offer the breadth of services that they desire.
Increased profits follow.
In an accounting practice, economies of scale are built into the business model, especially if the practitioner is providing more value, so the usual result is that larger accounts are more profitable as the practitioner develops familiarity and efficiencies when serving the account.
Similarly, an accounting practitioner will become familiar with the business operations of their client through their monthly or quarterly postings and review of the client records. Later, they may be able to offer operations advisory services based on this same knowledge, and expanding those services into part time CFO services, HR services, or Advisory services.
Multiple services can also lead to increased retention rates.
The industry average client life of a client as the customer of a firm is five years if the firm is only providing one service to the client. Four years if it is a payroll client and seven years if it is a tax preparation client.
Now, I’m sure you can claim that you, of course, are the exception to the rule, and your clients stay with you for many years longer without additional sales effort on your part. But these are the averages, and if your clients are actually staying with you for longer periods of time, just think how much more profitable they will be to you if you are able to to add additional services to their billings!
Growth during hard times.
As clients face hard times, those who survive attribute much of their resiliancy and strength to the information and advice they receive from their advisors. As other firms struggle, they see these stronger firms as role models and seek to emulate their success, even to the point where they are willing to change firms to take advantage of the skills and resources of advisors who are familiar with their industry and market.
As we go forward, in addition to the posts I am uploading on Business Models, Strategy and Tactics you can use in marketing your services, I plan to add some posts on upselling and cross selling your bookkeeping, accounting, tax preparation and consulting services. This was just the door opener. We’ll be getting into more in my next post on the topic.
Meanwhile, if you have an urgent need, feel free to take advantage of our private Facebook Group at http://bit.ly/2F1wXF7
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Best to you and yours,
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