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Don’t make this classic mistake

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27th Oct 2014
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Before we get into the ‘classic mistake’ let me start by asking you a related question, says Mark Lee.

If you’re really honest how much time do you devote to working on your practice rather than simply doing client work? Working ‘on’ your practice includes all the administrative work required to keep your practice going as well as planning for the future and all marketing related activities. 

Focusing all of your time on client work could be a mistake but it’s not the one I have in mind. Partly because I know of only a few accountants who focus on client work to the exclusion of all else. Those who feel comfortable with their current practice, such that they don’t feel the need to do any marketing, still typically make time to issue fee notes, collect debts and fulfil all necessary annual filing and reporting obligations.

Practice development activities

So let’s go back to that question I posed. How do you decide who you spend time with when you engage in 'practice development' activities?

Do you make time to attend regular networking events or do you keep trying new ones, to meet new people 1-2-1 and to get to know prospective introducers of new clients? Yes, it would be a huge mistake to attend networking events and then to omit the crucial ‘follow up’ stage. But again this isn’t the classic mistake to which I refer – though it is another common one that I hear about quite often.

You probably also make time to meet with prospective clients – after all, few will become clients without meeting with you first. Do you convert most of those with whom you meet? Another common mistake is to keep attending such meetings and ‘hoping’ that these relative strangers will become clients even if your previous conversion rate is quite low. If you carry on fixing up such meetings and handling them in much the same way with limited success, it makes a lot of sense to review your approach, look to pre-qualify out the least likely prospects and learn how to secure more positive outcomes. See, for example: Getting prospects from ‘no thanks’ to ‘yes’.

And, yes, I do think that failing to improve these skills is a common mistake. But it’s still not as important as the one to which the title of this piece refers.

There’s one last point of reference I need to clarify before explaining the classic mistake that so many accountants make. If your client base comprises exclusively very simple clients who just want you to do their basic compliance work (bookkeeping, accounts prep and tax) then you may be excused. The classic mistake to which I refer is not one you will be making. You may be at greater risk than others of your clients migrating to lower cost providers of a basic service. But equally you may be justified in being complacent about this if you have a close relationship with your clients and are confident that they will not leave you en masse.

Who gets your attention?

There’s a commonly quoted statistic that it’s 10 times more costly (in terms of time and cash) to generate new work from new prospects than it is to generate additional work of a similar value from existing clients. 10 times! That suggests there's a lot of wasted time that could have been devoted to billable activities.

And yet many of these prospects are often little more than ‘suspects’ whom you hope (or suspect) will need your services. So you spend time with these strangers as you know this is necessary to generate new clients and new work. Of course some will never become clients.

Have you ever compared how much time you spend with strangers with how much time you devote to your existing clients – over and above the work you do for them each year?

How much time do you spend looking for new ways to help existing clients?

Notice how I asked that last question. How much time do you spend looking for new ways to help your existing clients?

I specifically didn’t suggest you should spend time looking for new ways to bill them more fees. Clients know the difference between an accountant who’s evidently looking for ways to genuinely help and one whose main interest seems to be to increase their fees.

As I suggested earlier, your practice may be made up of clients you know well enough to be confident that spending extra time with them will not generate additional work opportunities or new referrals. If that's the case you are right not to spend any more time with them than is absolutely necessary.  And you should continue giving away your valuable time to strangers i.e.: Suspects and prospects.

Classic

Many accountants though have not considered spending more time with key clients, free of any prospect of billing for such conversations and meetings. That, I suggest, is the classic mistake so many accountants make.

What is the worst that could happen if you look for ways to help your existing clients more and ensure that you regularly make time to do this?

I suggest that the more you look to keep in touch and to help your clients, the more pleased they will be. The more they will talk positively about you and the more new work will come your way, both from your clients and from the people that they know. Overall this is likely to be less time consuming than spending time with strangers. So see if you can free up three hours a week to help your better clients. Maybe try this instead of attending a networking event or instead of meeting up with yet another prospective introducer. You may well be very pleasantly surprised by the return on investment you achieve from spending more time looking for ways to help existing clients.

Mark Lee is consultant practice editor of AccountingWEB. He has created a seven step framework to help accountants who want to STAND OUT from the pack; he facilitates The Inner Circle group for accountants, mentors accountants, entertains as a conference speaker and is chairman of the Tax Advice Network of independent tax specialists who provide support to smaller practices.

Mark will be speaking at this year’s Practice Excellence Conference on 6 November at Dexter House in London.

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Replies (27)

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By johnjenkins
27th Oct 2014 14:07

I think you're

wrong Mark (no surprise to you). Most client relationships are built on trust and getting on. Accountants do more mixing of business and pleasure than any other trade/profession. So to get to know your client, spend idle chit chat while discussing the accounts and the future. Don't forget, Mark, there are only so many hours in a day when your client will want to talk to you unless, of course, they are a social client as well.

Many years ago, when I was subcontracting to a friend who had a large Accountancy business, he said to me "I envy you". I was astonished. There was this bloke with a really good practice saying he wanted to be me. After the initial shock we got down to brass tacks. Apparently because his business had grown to a very respectable size he was losing contact with most of his clients. Yes he was on the golf course etc. with the bigger clients who were bouncing ideas off him (which very few came to fruition). His point was that he had lost touch with what made him want to be an Accountant in the first place.

In any business there may come a time when you have to make a decision that you either do the work yourself or stop doing the work and concentrate on PRing your clients.

In Accountancy the balance is nigh on impossible to achieve.

So, Mark, I think the opposite is true. Do not spend too much time with key clients, because, like my friend, you will lose your identity.

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By Mark Lee
27th Oct 2014 23:01

Thanks @John

Your views here and on previous posts make me feel that you are more interested in disagreeing with me than in anything else. That is you're right.

Your comments here suggest that you have latched onto one interpretation of my advice without considering whether that is really what I was saying.

Given how much of what you have said makes sense to me I think it's a shame that you choose to focus instead on perceived differences. For example, I entirely agree that it's not a good idea to spend "too long" with key clients. I don't think I advocated that anywhere. Mark

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By johnjenkins
27th Oct 2014 16:23

@Mark

Yes, I disagree with your posts, but only because I disagree with the way you approach what you are doing.

Your post says that the classic mistake made by Accountants is not to spend more unbilled time with key clients. I have tried to show, in my post, that you are wrong and the classic mistake is not to forget what made you an Accountant in the first place. You don't want clients saying "they've got too big for me now".

Our ideas of what an Accountant is and how you develop a practice are very different that's why my posts maybe perceived as a witch hunt. So watch out Friday.

I do not think that the term "return of investment" has any place in the Accountancy profession other than advising clients.

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By Mark Lee
27th Oct 2014 17:16

Thanks John

Funnily enough I doubt we are as far apart as you seem to imply.

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By johnjenkins
27th Oct 2014 17:34

You're quite right

Mark. All you need is the edges rounded up a bit (get rid of the sales patter) and I think you would make that step from being above average to exceptional and could well be the future bridge between HMRC and agent strategy. That's if you allow yourself to take a step back, adjust, then move forward.

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Replying to Vaughan Blake1:
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By Mark Lee
27th Oct 2014 18:45

Your prejudices betray you John.

johnjenkins wrote:

get rid of the sales patter

The whole point of this article is to flag the value of moving away from a sales focused mentality.

And yes, as @secondhand_22 says, your continued disagreement is getting boring. As ever I will leave you to have the last word - when no doubt you will again attempt to goad me.

Mark

ps: Thank you for the back handed compliment by the way.

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By GuestXXX
17th Mar 2015 17:42

.

 

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By johnjenkins
28th Oct 2014 10:13

@Mark & Secondhand

Have articles got to be agreed by everybody? Mark probably posts more articles that anyone else and as I disagree with some of his comments am I not allowed to say so?

If you don't like criticism, Mark, don't post.

Mark writes an extremely good article but IMHO sometimes loses his way.

@Mark. I think you are wasting your talent on writing these articles when you could be spearheading Accountants push for agent strategy, allowing us to take over the administration of HMRC, leaving HMRC to do what they should be doing and that is catching crooks.

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By Mark Lee
28th Oct 2014 10:30

Valid criticism is fine, where there is a difference of opinion

Criticism for the sake of it especially when it's misguided says more about the critic than the author. I dislike criticism that doesn't stand up to scrutiny. See my last post above.

Mark

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By johnjenkins
28th Oct 2014 11:18

@Mark

I think your idea of a classic mistake is wrong. I have told you why and what I consider to be a mistake that some Accountants can make.

Please tell me what part of that is not a valid criticism and misguided?

Are you that vain that you think I go through every word of every post to find something I disagree with?

I will take you through my thought process. I saw the headline "Don't make this classic mistake". Being an Accountant in practice I thought "perhaps I should look at this to see if I'm doing anything wrong" (I know I'm not perfect and I also like learning and getting other peoples views). The rest is history.

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Replying to paul.benny:
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By Mark Lee
28th Oct 2014 11:37

Think I'll stop agreeing with you now John.

johnjenkins wrote:

I think your idea of a classic mistake is wrong. I have told you why and what I consider to be a mistake that some Accountants can make.

Please tell me what part of that is not a valid criticism and misguided?

Nothing. It's just a different point of view. But your criticism went beyond that . You complained I was suggesting accountants should spend 'too long' with key clients (when I wasn't) and you told me to drop the sales patter despite the focus of the article being on doing just that.

Disappointed that I let myself get sucked into engaging with you again. For the last time. I have no problem with criticism but prefer to focus on points of agreement rather than points of difference. And I really can't be bothered to debate with someone who repeats the same criticisms time after time - whether justified or not.

Mark

 

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By blueskies
28th Oct 2014 11:49

good grief!

Life is simply too short.  I don't know either party nor have an axe to grind.  Constructive criticism and / or debate is a good thing.  However to be picky and argumentative and miss the benefit that others can take away from the article is not. 

 

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7om
By Tom 7000
28th Oct 2014 12:37

Lets vote....

 

John says says....

Many years ago, when I was subcontracting to a friend who had a large Accountancy business, he said to me "I envy you". I was astonished. There was this bloke with a really good practice saying he wanted to be me. After the initial shock we got down to brass tacks. Apparently because his business had grown to a very respectable size he was losing contact with most of his clients. Yes he was on the golf course etc. with the bigger clients who were bouncing ideas off him (which very few came to fruition). His point was that he had lost touch with what made him want to be an Accountant in the first place.

 

Hands up all those that want to play golf? ( like me...)

Hands down all those who want to be preparing a tax comp?

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By johnjenkins
28th Oct 2014 12:43

blueskies

up above, everyone's in love. In a crazy dispute with Mark Lee and me. etc.

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By johnjenkins
28th Oct 2014 12:48

@Tom

Played the game twice. Spent more time looking for my balls than getting it in the hole.

Doesn't your computer prepare the tax comps these days?

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By Breckmans
28th Oct 2014 13:01

I agree, sort of!

My clients get my attention, not potential clients. I do not network much at all, I'm not a natural at it and small talk, and I do not have much time for it - who does? So why worry about networking? Where do most clients come from? Existing client recommendation. Therefore, I agree with Mark, concentrate on looking after existing clients, not on the golf course, but from the office. Large firms lose the personal touch with clients  because clients become a number, whereas small firm partners are able to keep a more hands on approach. Richard

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ghm
By TaxTeddy
28th Oct 2014 13:57

No More Networking

I don't do it any more. Everywhere I go there are too many bloody accountants. 

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Replying to Vallery Lee:
By ShirleyM
28th Oct 2014 14:26

I am useless at networking

TaxTeddy wrote:

I don't do it any more. Everywhere I go there are too many bloody accountants. 

I found that either:

the people I met wanted a hefty discount (because they are in the same network)if they gave me a lead they expected one back (not always possible and puts an end to future leads)

It works for some, but not for me.  I got fed up of the follow up calls from other networkers trying to get my business and/or referrals from me. The more pushy they got the less likely I was to refer them. I don't want our clients subjected to such pushy people as we promise our clients they won't be subjected to hard sell tactics or persuaded to buy services they don't need.

I found it a complete waste of time, but as I said .... I'm not very good at it.

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By Casterbridge Hardy LLP
28th Oct 2014 14:13

SENSIBLE COMMENT

Well said Tax Teddy.

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By Mark Lee
28th Oct 2014 16:30

@shirleyM

You may be right but equally you may be a better networker than you think.

Sadly many people's views of networking are tainted by reference to their experience of a specific networking group. They do not all operate the same way nor do they all encourage or permit the same types of behaviour.

Mark

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By AndrewV12
30th Oct 2014 09:45

there's a lot of wasted time that could have been devoted to billable activities.

Tell me about it,is it just me or do others not bill for everything they should do.

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By johnjenkins
30th Oct 2014 11:48

@Andrew

You are obviously doing your job as an Accountant properly because there will be unbillable time but it's certainly not wasted.

 

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Replying to Wilson Philips:
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By AndrewV12
31st Oct 2014 10:09

Unbillable time

Morning John

Thank you for your message, i think sometimes i am to close to the clients and feel un-comfortable about billing, going forward I may step backwards and be more mystique regarding my duties.   

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By johnjenkins
31st Oct 2014 10:37

Ah the old

"mystique duty" ploy eh. The more you tell me the more I feel you are doing the right thing. Getting close to your clients on a business level(some will naturally turn into lifelong friends) is what being an Accountant is all about. Knowing your client inside out, then when you discuss matters, you're both singing from the same hymn sheet. So the unbilled time spent getting to know your client not only isn't wasted, but your client will be at ease passing your name on to others. Don't look to bill at every opportunity. You will not make loads of money but you will build up a very successful, profitable and highly recommended practice and IMO that cannot be beaten. 

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Replying to Jennifer Adams:
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By Mark Lee
31st Oct 2014 12:02

Pretty much the point I was making in the article

The classic mistake is failing to do all this.

johnjenkins wrote:

Getting close to your clients on a business level(some will naturally turn into lifelong friends) is what being an Accountant is all about. Knowing your client inside out, then when you discuss matters, you're both singing from the same hymn sheet. So the unbilled time spent getting to know your client not only isn't wasted, but your client will be at ease passing your name on to others. Don't look to bill at every opportunity. You will not make loads of money but you will build up a very successful, profitable and highly recommended practice and IMO that cannot be beaten. 

As I said, we agree on more than we disagree!

Mark

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By johnjenkins
31st Oct 2014 15:57

Well done

Mark, you nearly made it. The main difference was that you said you should make time for key clients. My point is that time spent, naturally with all clients would eventually bring rewards. Not too far off though.

 

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Jennifer Adams
By Jennifer Adams
13th Nov 2014 12:54

Attending regular networking events = waste of time...

When I went to the Accountex event a few months ago (v good - worth going) one workshop speaker kept saying that Networking was key to new clients and in particular BNI was the group to join. Trouble is... only one of the same profession can attend. And of course that place will already have been taken by another accountant.

Whatever the networking event you will find that they are full of accountants as TaxTeddy says - same with solicitors.

There is the Chamber of Commerce but you'll find the same there. Those of us who live in the sticks will find only one or two networking groups and at each event you meet the same people..

When I had a moan at BNI about being so many accountants they suggested i start my own group but that would take up all my time such that I wouldnt do any work!

 

 

 

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