The acquisition of new clients continues to be a dominant driver of profitability for small and medium practices (SMPs). Indeed, in the latest edition of the International Federation of Accountants (IFAC) SMP Quick Poll, the largest portion of respondents identified acquisition of new clients as the main driver of practice profitability – by a wide margin.
While SMPs understand the importance of improving operational leverage (doing more with less), improving productivity (eg changing work practices or introducing technology), reducing overheads and better utilisation of assets, these are not the main drivers of profitability for most SMPs. This is not surprising, given the fact that practice overheads are relatively fixed.
The poll results seem to question the wisdom of many practice management gurus who say that the cost of acquiring a new client is far higher than the cost of retaining, or selling more services to, an existing client. What those ‘gurus’ may be failing to recognise is the full potential and cost effectiveness of a marketing campaign that includes low-cost social media.
So, how do you go about it?
Branding:
The first step of a marketing strategy is to identify your target customers and what they need. You then have to determine how you can satisfy those needs at a profit and, at the same time, differentiate yourself from your competitors. This becomes your brand. The aim of your marketing strategy is to have people associate your brand with their needs and desires, choose you over the competition, and, if you do it right, pay a premium for your services.
Promotion and marketing:
An organic growth strategy involves leveraging promotion and marketing activities to build brand and attract new clients or sell additional services to existing clients. Remember that most businesses in the market are likely to already have an accountant. In the majority of cases, that means you will need to win clients from rival practices in order to grow your business. And, to do that, you must offer a compelling reason for them to switch.
This makes promotion and marketing more important than ever – and demands that practices build the capability to proficiently promote and market their brand and service offerings. You will likely be faced with the classic ‘make-or-buy’ dilemma, that of using (and training as needed) existing staff to do promotion and marketing, or else recruiting or outsourcing for the requisite skills.
Promotion and marketing efforts are most effective when a number of activities and channels are used simultaneously: this harnesses the momentum of such efforts and is likely to be more impactful.
There are many tried-and-true strategies for marketing, but the newest one-social media – has already broken the mould. Social media marketing has rapidly grown in prominence and gone from marginal to mainstream in the marketing space. Social media is a low-cost channel with a very wide reach into your target market.
Social media marketing
Social media essentially has taken traditional word-of-mouth marketing (historically the norm for accountants) and moved it to a digital space, exponentially increasing opportunities to influence. It is one of the most powerful tools to engage customers and drive revenue growth.
But according to Steven D. Strauss, small business expert and author of The Small Business Bible, while small business owners recognise how important social media is to their success, they’re not taking advantage of social media’s full potential”. And, chances are, the same applies to SMPs: after all, SMPs are effectively small businesses in – the accountancy sector.
Getting started in social media marketing and deciding whether it can benefit your practice can be quite overwhelming – even scary, at first. Here are some steps to take when building a social media presence:
Set aside preconceived notions –
Social media carries risks, but the rewards are greater. It will take time and expense to – plan and execute, but there are many tools, helping develop strong resources and articles to help.
Learn about the what, why and how –
Take the time to read and educate yourself professional accountants. about social media, including Twitter (see Acquisition of new clients Seeifac.org/SMP Twitter’s Small Business Guide), LinkedIn, Facebook and blogging. Also, see what your peers are doing.
Check out the tools and resources available to help –
There is a growing suite of tools, resources and guidance available; for example, the American Institute of Certified Public Accountants Private Practice Companies Section (AICPA PCPS) has developed a number of resources, many of which are available for free, including a social media toolkit and articles.
Create a strategy and action plan –
Define goals, decide how you will measure success and allocate responsibility, then start out small by, for example, pilot testing one of the tools.
Implement the plan –
Aim to provide content that creates conversation rather than advertises. And involve staff from the millennial generation, as they often have the most experience.
Periodically evaluate, analyse and update the plan –
Track your efforts and monitor the return on investment using common metrics, including likes, shares, followers, traffic and conversions.
Consider the need for a policy –
This can help manage the risks and reap the rewards.
About IFAC:
The International Federation of Accountants (IFAC) is the global organisation for the accountancy profession, developing international standards and guidance, helping develop strong accounting firms and promoting the value of professional accountants. See ifac.org/SMP
