Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

How accountants can sell more effectively

by
24th Jan 2013
Save content
Have you found this content useful? Use the button above to save it to your profile.

Mark Lee interviews sales trainer Marcus Cauchi, who shares his insights about the mistakes accountants make when quoting fees and making sales.

ML: Marcus, I’ve heard you speak many times and you’re always saying ‘It’s not about the money’. Can you explain what this means in the context of accountants winning new clients?

MC: That's easy. Most accountants start by feeling uncomfortable asking for full fees for fear of losing the job.

They believe it's about the money. It isn't. So they discount the fees they really want to earn from new clients and then when they have the account they don't recover fees for all the hours worked. Often in excess of 40% of the hours are never billed. 

ML: Why do you think they do this?

MC: Accountants are most often comfortable as technicians. They crunch numbers, save tax, audit accounts, advise. But when it comes to selling they have a mental block towards selling so they tend to explain why they are the best fit for the prospect instead of finding out the prospects reasons for wanting to buy from them now.

They explain how well established they are and how experienced their people are and then they try and buy the business by undercutting the incumbent's fees or the fees being quoted by other accountants. What they forget is that it's never about the money in a real selling situation.

ML: What else do accountants do to harm their chances of closing a sale?

MC: They answer the prospect's questions without qualifying why they are asking them and finding out what the prospect is hoping to hear before they decide who to buy from.

So they spend a lot of time guessing and feeding the reasons they think the prospect should buy from them.

ML: I bet you have an easy way to move away from that habit Marcus.

MC: Indeed. I call it the 70/30 rule.  Let the prospect talk for 70% of the time while you listen and pay full attention to what and how they are responding.

The accountant should only be talking for 30% of the time. In fact, this time should all be used by the accountant asking powerful questions that lead the prospect to discovering their reasons to buy from that accountant, that day.

ML: If you were advising the partners of an accountancy firm on how to maximise their profits, what would you recommend?

MC: Naturally, each situation is different but the first thing I'd do is look at how they measure and reward themselves. People's behaviour is driven by how you manage them and how you pay them because they affect their experience and experience feeds their beliefs.

ML: Absolutely right. I have often pointed out that: Employers get the behaviours that they are seen to record and to reward. It’s the same for partnerships. Whatever information is regularly recorded and seen to be rewarded will determine the way that the partners perform and behave,with a few admirable exceptions.

MC:  I have also heard you say, and I have observed that accountants typically focus on three things:

  • The size of their ledger
  • Their billable hours
  • The extent to which they can recover (bill) the fees on their ledger

This focus should mean that accountants concentrate on maximising the revenue on their ledger and they all want to hit their 1000-1200 billable hours because that's how they get paid.

So why does their recovery rate so often leave a shortfall of 30-40%? It’s because partners fear the client won't be willing to pay for the hours worked, so they discount or don’t charge for all the time spent. That's why so many come up short on their numbers and average about 800 billed hours.

ML: I see what you're getting at. Because it happens across the board, the partners all continue to draw their standard profit share despite the fact that they are not hitting their targets.

If monthly drawings were a function of the value of recovered fees rather than billable hours the consequential impact on behaviour would be obvious.

MC: In my experience accountants routinely give away 60-70% of their viable revenues by discounting and over-servicing because they aren't held individually accountable for their contribution to profits. One firm I'm working with has about £8.5m turnover. This problem is costing the partners just shy of £17m a year.

ML: How much?

MC: £17 million per year. 14 partners each giving away £500,000 per year. That smarts.

ML: Why don't accountants change if this is really the case?

MC: Inertia. My client described his partners as “fat, dumb and happy”. They're happy to live off past glories because they've made investments throughout their career, they have second homes, grown up kids and they're comfortable plodding along being well paid technicians; they have almost no incentive to change. Comfort brings about the death of ambition.

ML: I have seen that in many firms too over the years. If the partners are happy and not stressed then it’s fine in my view.

Of course, some of the partners in the firm are often not happy, are stressed and want things to change. In those cases, what's the solution?

MC: The answer is simple but executing it and bringing everyone along willingly is the tough part. If you're making a decent six-figure income why would you change?

You probably wouldn't want to upset the applecart, and if you did you'd quickly give up because of the resistance you'd face from your partners. You know how hard it can be to get partnerships to agree to change or spend money because everyone is thinking “It's my money you want to spend”.

The problem starts with culture. Each accounting firm I have worked with is perfectly designed to deliver exactly the results they are achieving today.

Culture is about how we do what we do; what we value; our standards; what's expected from us in terms of how we behave.

ML: Fine words but what needs to change?

MC: Replacing bad habits with good habits is tough as any couch potato or smoker knows. We are slaves to our habits so it makes sense to make them good ones; that means we need to stop discounting, to stop being scared of being challenged over our fees and to stop avoiding potential conflict by saying nothing when a client’s proposal doesn’t meet our standards.

Our beliefs and experiences drive our behaviours, which is key. Your current behaviours are delivering the results you are getting today. If you don't want to stay stuck, change your behaviours so they deliver the new results you want.

ML: And what behaviours should they start with?

MC: Stop putting your clients on a pedestal. True, they are the reason you are in business, but they are not king nor are they always right.

You are never less than their equal, which experience proves this time and again. They dig themselves into holes or are not able to solve a problem and turn to you because they need help. They have the commodity – it's called money. They have the problem and you are the expert who can help them. That puts you in the driving seat in my book.

In sales you have only 2 functions:

  • Protect and grow what you already have - i.e. cross sell, up sell and retain existing clients on an elevated fee over last year, ideally one that is  2-3 to 10 times higher than inflation
  •  Plunder other people's accounts.

Prospect for new business directly, indirectly or via your referral marketing system.

(I laugh because for most accountants’ referrals are a surprise and happen by accident, not planned, strategic and forecastable months in advance.)

ML: Which takes us back to where we started. It’s not about the money is it?

MC: It is never really about the money, Mark. I have lost track of how many managing and senior partners of accounting firms I have met who baulked when I first quoted my fee. 

They are frustrated that they aren't in front of enough qualified decision makers frequently enough. Others are meeting plenty of qualified buyers but they aren't closing as often as they'd like. Some are meeting and closing new clients but then they're discounting by between 10-30%. I follow my own advice and often win the work to help them save many multiples of the fee they will be paying me.

If they don’t want to do this, I walk away, as I would encourage them to do if they face a prospect who doesn’t value what they can do for them.

Tags:

Replies (1)

Please login or register to join the discussion.

Mark Lee headshot 2023
By Mark Lee
19th Apr 2014 19:35

Marcus Cauchi

I first met Marcus in 2006 and have benefitted from attending a number of his sales training seminars. You can find out more about him through his Linkedin profile>>> and his website>>>

Mark

Thanks (0)