As we look ahead to 2015, most of us would like more high quality leads so we can become more selective about the new clients coming in the door and become more adept at screening out marginal clients.
The vetting process is critical to the success of all professional service firms, whether it’s accounting, law, management consulting or architecture. The most successful professional service firms strategically identify what types of clients they want more of, and which types of engagements they want to avoid. After completing this process, the next step is to target the engagements that deliver higher fees.
Below is a multi-partner CPA Firm that is moving down this path using a multiple website strategy. By all means, internet marketing is just one facet of their marketing plans but it’s easy to see how multiple websites can create a compelling message to segmented audiences of prospects while still branding the firm holistically. In each case, the website is designed to create an aha moment for the prospect who feels that their needs are complex while not compromising the brand imagery of the overall firm.
As background, the firm below is an established CPA firm in Miami with three partners. The roots of the firm trace back 65 years.
CPA Accounting Firm – Main website positioning them as a generalist accounting firm serving all types of clients.
Using a four (4) website approach enables Canner Brody and Yan CPAs to change their message and go into much more depth on each of the niche accounting services they provide, thus enabling them to compete with much larger CPA Firms for prospective new clients.
If you’d like to maximize your lead generation from the internet, give Build Your Firm a call. You’d be surprised how impressive we can make your firm appear on the internet.
Many of the accounting firms that we work with have relatively modest growth goals for gross sales and are very concerned about the quality of the work they produce, which is understandable. However, most don’t focus enough on improving the bottom line and look at all clients equally. To us, this makes no sense.
If this rings true at your practice, here are some quick suggestions:
1.) Invest in growing your higher profit margin services now. In many cases, savvy accountants will strategically invest into concentrations (aka niches, areas of specialty) to enhance their overall profit margins. I think of this as margin blending in the right direction. In other words, they will invest their limited marketing investment into niche areas that yield higher hourly realization rates so they can offload lower profit margin sectors (or clients).
Here are some examples of accounting firms proactively investing in niches to improve overall hourly realization rates and average firm profit margins. Keep in mind, each of these firms also have regular clients and a generalist website too.
2.) Cull Out Lower Margin Segments – Rather than “fire” less desirable clients, we suggest that you package them up and sell them. Over the past year, we’ve had several clients package up their payroll clients and sell them off recognizing that the hourly realization was much lower than the niches above. Others have packaged up individual tax clients so they could focus more on higher value clients.
Now is the time to invest a little into your higher value segments so you can cut loose some of the dead wood (lower margin) after tax season. Just saying….
When Peter Freuler took over his father’s Orlando, Florida CPA practice in 2005, it was highly dominated by 1040s, which included filing 700 individual returns and 125 business returns. At that time, his firm’s revenue was approximately $245,000. Today, his firm has more than doubled its revenue and profit margins are much more attractive.
How did Peter change the direction of his business and grow revenue? The first step was to hire Build Your Firm (BYF) for outsourced marketing and lead generation in 2009. The second part was to restructure how work was processed in the practice and third, he culled out a portion of the practice and sold it to another firm, thus freeing up capacity and enabling the firm to focus on higher value clients. Today, Peter outsources all of his marketing to BYF and views them as an extension of his practice.
“We’ve steadily and strategically grown more business- focused,” he said. “We don’t turn down individuals, but we are not trying to be H&R Block, either.” Our mix of revenue is primarily business oriented, which is the opposite of what the practice was in 2005 and my work-life balance has steadily improved.
Focus on Niches
Peter recognized a need to market his firm to attract more clients. He knew that targeting just anyone with the need for CPA services would not work, so he decided to create industry niches to differentiate his practice, attract a certain type of client, and gradually strengthen our firm’s knowledge of that particular industry sector.
“Our original niche in dental and medical accounting started with just one client. This part of our business has stabilized as the healthcare industry has gone through regulation changes and some hospitals are now buying medical practices,” he said.
As a result, the need for another business evolution occurred. Peter decided to augment his medical practice accounting niche with a real estate accounting niche. About 2-3 years ago, the local real estate market started to turn around so we decided to create a niche within the real estate sector amongst commercial property owners, residential property investors, and even non-resident property owners, which there are many in the Orlando area.
“Around 2008, the drop in the property value of vacation real estate dropped in the Orlando area,” said Peter. “Individuals and investors started buying vacation condos as investments and called our practice, asking questions. Pretty soon we were able to answer those questions easily; and our second niche was born!”
Peter’s clients include international investors who have purchased property in Orlando, as well as brokerage firms, property management firms and individuals who purchase the property as an investment.
“Some of our clients receive an easy 15% to 20% yield on rental property investments, but they need help with some of the more complex tax issues they face,” he said. That’s where we now excel.
The Niche Advantage
As Peter can attest, establishing a niche helps accounting firms and other businesses market themselves. The niche differentiates you from the competition, establishes you as a subject matter expert and enables you to reach your target market more easily. Over time, these type of business clients become easier for our entire staff to manage because of repetition.
Yet, creating a niche alone does not necessarily increase your business unless you complement it with marketing that effectively reaches this target audience. In Peter’s case, he uses a combination of print newsletters designed specifically for real estate businesses in conjunction with direct mail letters to generate new leads amongst local businesses. He also has a website designed specifically for real estate businesses that targets local businesses and non-resident property owners who may reside in Europe, South America or throughout the United States. The Orlando area is very unique in that it has many residential property owners who come there periodically for vacations and manage it remotely as a rental property.
About 60% of our new business comes from Internet leads, which more than offsets the cost of maintaining three websites. The nice thing about internet leads is that the prospect has been hunting for a particular accounting firm, is ready to buy, and then takes the time to call us with their specific questions. And often, they are more than willing to work with us remotely, so they are more efficient to service over the old fashioned hand holding client.
“A lot of clients call us because their former CPA could not answer their real estate tax questions, so they start searching and find our website,” said Peter. This puts us into a consultative type situation, which we enjoy, and is very easy to close.
Peter added that CPAs need to understand that achieving measurable results takes time and a continued commitment. “I’ve often been asked about the ROI of my marketing. I tell people it is a long-term investment and I rely on BYF to generate quality leads. Interestingly, I recently got a call from a prospective client who received a direct mail piece from me three years ago!”
While the spotlight shines brightly over large retailers (e.g., Home Depot, Target, etc.) that get hacked for credit card information, not so much attention has been paid to accounting firms using email during tax season. One of these days, we will see a highly reputable CPA Firm go through the ringer and lose their reputation and get fined beyond belief for not complying with Sarbanes-Oxley, Gramm-Leach-Bliley, and other federal/state laws concerning identity theft and handling of personal information.
I remain shocked at the number of accounting firms which are using standard email to send and receive information. All the personal information you handle — including client income data, social security numbers, EINs, retirement accounts, payroll accounts — is wide-open to interception by third parties when sent via regular email.
Types of information that hackers love to find:
- 1099 forms and W-2s
- Bank statements, credit card statements and voided checks
- Entire tax returns loaded with social security numbers and birthdates
- Payroll information for entire companies
- QuickBook files
- Online banking accounts
- Retirement accounts and investments
Any tax preparer or accountant who accepts or transmits these documents over normal, unencrypted email could be penalized heavily and/or sued.
Going forward, please ensure that all inbound and outbound email is encrypted and secure so you are in compliance.
There are plenty of commercial tools on the market that encrypt email so you can inexpensively comply. For example, all Build Your Firm websites provide Secure File Sharing with 256 bit encryption (bank grade encryption). It’s as easy to use as email, but is secure.
Have you ever wondered why accountants are so willing to accept the cookie cutter approach to a website?
Often, your website is the first opportunity to create an impression and it seldom is a good first step. By all means, the bar across the accounting industry has been raised but there are still many practices that don’t have a website, or it poorly represents the type of accounting firm that they are.
To me, the purpose of the website is to generate leads for your practice, “brand” your firm gradually over time and help you operate more efficiently. In other words, a website for a bookkeeping firm should look very different than a payroll firm. And a sole practitioner tax accountant should look different than a large CPA Firm with 5-10 partners and many staff members. And a boutique CPA Firm that focuses on non-profit accounting will look very different than an accounting firm focused exclusively on IRS Tax Resolution. That’s why custom website development is so important to creating the right, first impression and growing your accounting practice.
If you’d like a custom website designed around your accounting practice, call Build Your Firm. The monthly price is extremely reasonable and we will take responsibility for designing it around your unique set of services.
At certain times of the year, does this cartoon resonate with you?
If you’d like to avoid getting into this situation by having more control over getting paid, then attend the free webinar titled “Boosting Cash Flow – Essential Ways to Get Paid Faster”. The webinar is instructed by a practicing accountant that uses this electronic payment processing system to get paid faster and less expensively.
By all means, I understand that some accountants still resist the urge to embrace QuickBooks. Heck, I even remember accountants telling me how much better Thomson Reuter’s CBS and Peachtree were. After a decade of clinging to alternatives, it’s time to jump on the band wagon and swallow that bitter pill.
In December, Intuit will be launching a new certification called QB Online Advanced, to support their improvements to QB Online. By all means, I realize that it’s not elegant but it is better than it used to be. If you would like to improve your placement within Intuit’s Find-a-ProAdvisor website and continue getting leads from QB users (small business owners), please plan to take this certification in early December. Being one of the first to pass this will matter to your placement.
For small tax practices that want to acquire small business clients, here are my suggestions:
- Obtain at least four (4) QuickBook certifications. If you obtain all six (6), your placement will be towards the top.
- Support your profile completely with a picture, hyperlink to your website, and treat the profile like an advertisement, which it is.
- Encourage happy clients to post glowing reviews about your QB review and clean-up services.
- Support your QuickBooks concentration with a BYF website dedicated to your QuickBooks services, for more leads from Google, Bing and Yahoo.
Have you considered “unbundling” your services to attract more leads?
Over the past ten years, many industries have begun unbundling their services into smaller bite size nuggets to generate more inquiries for their services. Sometimes, this change is forced upon them and other times, it’s opportunistic to generate that initial discussion, which leads into multiple engagements down the road.
Unbundling has been huge for the music industry. In the olden ages, the music industry would bundle together a batch of songs (e.g., album) and sell the bundle for higher price. With the digital age, songs are now unbundled and purchased a la carte. As a result, the barriers between music artists and genres has lowered thus creating over 1,000 bewildering microgenres.
In the restaurant business, have you found yourself getting sucked into ordering tapas which end up costing you more than buying one comprehensive entrée? This is what unbundling your services can accomplish for your accounting practice.
To illustrate my point, have you considered delivering your services in the comprehensive manner that you’ve always done but also offering them in smaller pieces? In other words, breaking a full service, comprehensive set of “we do it all” into smaller micro websites which break the message into smaller, more meaningful a la carte pieces. Below are some examples:
Forensic Accounting – In addition to your main website which communicates your comprehensive forensic accounting services, have you developed micro websites which break forensic accounting into fraud investigation, litigation support, business valuation, expert witness, collaborative accounting, child support calculations, trial preparation, innocent spouse relief, etc.
International Tax – In addition to your main website, have you unbundled international tax into micro websites like expatriate taxation, foreign tax credits, transfer pricing, offshore voluntary disclosure (ODVI), immigration tax planning, tax inversion planning, multinational family tax planning, etc.
To be more specific, here is a live example of how one accountant has unbundled IRS Problem Resolution into delectable pieces of the pie.
Try the best of both worlds, deliver your corporate message in the full entrée manner that most restaurants serve food but also try a tapas approach with smaller micro websites that make it easier to sample your services.