I think the days of relying on referrals may be numbered.
During my full-time periods in professional practice I too relied on a constant stream of new client introductions from existing clients. Certainly, in the early, heady days there were plentiful additions to recurring fees from this source. Unfortunately, as my practices matured, referrals started to reduce as loyal clients basically ran out of contacts to recommend.
In the current market place, competition now plays a much larger part in this process. The advent of increasingly complex, and competent, accounts and tax software has enabled less qualified persons to step into the compliance market. To some degree this has lowered the price of basic accounts and tax return preparation. This in turn has added downward pressure on the quantum of fees and profits earned by professional firms.
Should we increase our fees?
Hopefully, I am speaking to the converted on this question.
New business is the lifeblood of a thriving practice. Even if a practitioner is approaching retirement, fee-attrition is unfortunate as it will simply reduce the value of practice goodwill.
So, the answer is yes, in my opinion we should plan for growth in client acquisitions and rewire our practices to sell services that may have a recurring element, but that also offer those extra elements: to assist tax-payers in achieving their dreams and aspirations, and solving their problems.
We are more than problem solvers
Accountants are ideally placed to lift away the time consuming work of meeting compliance deadlines; historically, its what we do. The problem with relying on compliance work is now appreciated and more and more practitioners are successfully offering so-called “added value” services to clients that shift the emphasis away from “grudge” services (meeting HMRC and Companies House deadlines) and instead offer support services that are appreciated, valued and can justify a more realistic level of fees.
This shift from pure compliance to advisory work should be adopted by all practitioners. However, we are more than problem solvers, we are also partners in assisting clients to fulfil their business and personal financial dreams.
How do we increase our fees?
Certainly, we cannot rely solely on referrals to increase our fee income; but stepping outside of this passive approach, we will need to act: to adopt and maintain a structured marketing plan for our practices.
There are two basic threads to this planning exercise: to approach existing clients and sell them additional services and secondly, to win new client appointments. Each requires a distinct marketing approach.
The low hanging fruit is to approach your present client base with additional services. Do not fall into the trap that dismisses cross-selling as a waste of time, that clients are only interested in minimising the cost of your services. If this is how you feel, then you need to re-engineer your service offerings to embrace the “valued” service definition: services that not only solve problems, but that also assist clients meeting their goals.
Take a look at our Fee Builder program
We can help. I have created a Fee Builder program that can be adopted by practices of any size. It offers ideas and practical support to develop new services for your practice and a simple stepped process to achieve gains in cross selling to clients and improving new client acquisitions.