Social media and cloud accounting stood out as the most notable technology trends among firms shortlisted for 2012 Practice Excellence Awards, but across the board the judging panel saw clear evidence that IT could make a positive contribution to client satisfaction.
While the overall patterns of technology adoption were quite clear, technology behaviour varied between firms of different sizes. This article draws on both the general findings of the judging panel, and highlights good and bad points that emerged from this year’s best performing firms.
Cloud on the rise
Cloud accounting was prevalent in all sizes of firms, but smaller firms in particular were missing a trick by using these web tools as straight replacements for Sage, QuickBooks or other traditional desktop accounting programs. The medium and large firms who have embraced cloud accounting were more likely to use it as a platform for a new way of working with clients - acting as a “virtual FD” for example, looking in on the books periodically, resolving errors before the period end and using the numbers to feedback management reports.
While Dropbox was mentioned as a means of sharing files and documents with clients, some of the more sophisticated firms were running client portals: secure areas on their own or third party websites that provided a more controlled and all-encompassing environment for interactions.
Management reporting & KPIs
There were a wide variety of monthly reporting, benchmarking and quarterly/yearly strategy tools in use at the firms shortlisted for Practice Excellence Awards. Bespoke reports, typically generated by these reporting tools or online applications, helped the firms to get their clients clients to make business decisions based on better information.
Perhaps more importantly for client satisfaction, the management information also gave practitioners a pretext for regular meetings with clients to look at their strategies and progress, and new opportunities for the accountant to provide added value services.
CRM
Almost without exception, the firms shortlisted for Practice Excellence Awards paid close attention to referrals and client feedback.
Following the accepted prescription for knowing your target market and improving profitability, some of the more successful firms segmented clients into different groups and had a clear idea of the ideal clients they would like to attract to the firm.
Judge Ric Payne applauded these strategies, but voiced concern that some firms talked about the importance of referrals, but appeared not to have a structured approach, or systems in place to manage them.
Having client/customer management relationship software in place can automate many of these tasks - giving firms a database to profile new contacts and where they originated, to target specific initiatives in their direction and to record whether the prospects ultimately become clients. Such systems can bring better results, but the costs involved meant that they were used more commonly in medium and large firms than at new and small ones.
But keeping an eye out for cheap and simple solutions, or using existing office tools to create your own processes and systems would be very beneficial to small firms, Payne advised.
“Referrals are a source of business and have a huge impact on revenue growth,” he said while discussing the growth strategies of the new firm contenders. “I may be overly critical here, but a lot of them say they’ve got a referral system, but don’t present much evidence to show they know where the referrals are coming from. I think many are on the cusp, but are not quite there yet.”
Social media
New and smaller firms tended to lead the way in social media use and blogging, but even where social media was credited with generating client enquiries, but as we noted with client referrals, few firms were able to track the source of their social media enquiries, or their conversion rates.
The judges shared a common suspicion that many firms are going through the motions with an interesting new technology at the moment. Only when they work out their objectives for such activities and how to measure and manage them will they start to see really meaningful results.
“What are these firms actually saying in their blogs and on Twitter?” asked Ric Payne. “Followers mean nothing. Most of their followers are probably half naked girls from Russia. How many leads actually came from them?”
Mark Lee, who has already published his own conclusions on social media use at the nominated firms, picked up the baton. “Follower numbers in isolation tell us nothing. They are monitoring the wrong measure. They should be focusing on engagement with local businesses, but there is no way to see if they are reaching them.
“Firms may say they’re getting significant enquiries, but the absence of metrics suggests that they can’t really track anything back to social media activity, web developments or online search. They need to have definitions in place for engagement with target clients rather than generic activity, and track their performance against those measures.”
Mobile and online communication
Some of the most interesting innovations came from new and small firms that have built up their firms around the latest technology. So many useful tools are available and the costs of entry are so low that this is a natural evolution, said Ric Payne.
For new firm nominee AWR and a couple of other small firms, the simple expedient of giving their mobile phone numbers to clients brought them closer in touch.
Small firm nominee Gordons Knight was more creative - circulating coaching videos to clients via email every fortnight and producing videos analysing their financial results that they can view and return to when they like.
“Clients seem to love it,” the firm said, pointing to a consistent level of referrals and a retention rate in excess of 99%. It also said its YouTube channel generated an average of a client a month.
As well as embracing social media, large firm winner Milsted Langdon caters for clients’ technology preferences by delivering its management reports in forms that suit their clients’ preferences whether via email, mobile phones or tablet devices, such as iPads.
Judge Ric Payne was impressed, “The initiatives should improve the quality of communication with clients which is an important aspect of service quality,” he commented.