In this classic from the AccountingWEB archives, Mike Platt and Mark Lloydbottom challenge the conventional thinking of many professional services marketeers.
For some reason, the accounting profession is riddled with marketing myths. These can be quite damaging if taken too seriously. This article offers an antidote to some of the popular misconceptions within the profession:
Myth: The best source of new business is from new clients - The theory is that your new clients will be so ecstatic with your service that they will gladly refer you to other clients, allowing you to gradually phase out older clients. In fact, it is easier to sell to your current clients. The referral relationship is more established with current clients and they are more likely to purchase additional services. Sales and marketing expenses are cheapest when cross-selling. It is far more expensive to get a new client than to keep an old client.
Myth: You must keep all of your clients - Many accountants feel that they should keep every one of their clients. Many also feel that all fees are equally important. The accountant who feels that he must keep all of his clients is buying market share, and is failing to capitalise on potential fees. Buying market share is a failed marketing strategy and is not advisable.
Myth: Your biggest customers are always your best customers - This is probably the one most invisible marketing myth for accountants - and most dangerous. Many accountants are tempted to attract and keep large clients, typically because he or she feels that fewer client relationships are easier to handle and that the clients are more prestigious. On the surface this is true. But it is essential to avoid a situation where clients become the tail that wags the dog. A client whose departure could take away an appreciable part of the practice income is potentially dangerous.
Myth: Personal sales calls are the best marketing weapon and their use should be encouraged above all else - Personal sales calls are very expensive, very time consuming and amount to a hidden cost. The best marketing weapon is an ability to develop qualified leads. With qualified leads, you can focus your sales skills and develop more business.
Myth: Price sensitivity is a function of the customer’s personality - Price sensitivity is a function of the customer’s estimation of an accountant’s value. If an accountant, or any other professional service provider uses low fees as the main thrust of their marketing argument, then that person can be assumed to have a low skill level.
Myth: An accountant has to match a competitor’s rates - This myth suggests that in essence, an accountant is a victim of the pricing structures of other accountants. This is potentially a very damaging misconception.
Myth: Price is the consumer’s ‘bottom line’. In a recession, pricing becomes paramount - Pricing takes on additional importance during a recession, but it does not turn a normally value-conscious client into a generic, “commodity-pricing-only” company. Clients who seek a low fee will seek it in good times and bad.
Myth: Detecting a prospective client’s problems is the best way to position yourself with them - This is not completely untrue. Standard sales theory holds that the best way to impress a client is to solve his problems. But detecting the problem is only the first step. Before you can be perfectly positioned with the client, you must ensure the client realises that he has a problem and that your firm is the best one to carry out the solution.
These are some of the more common marketing myths that are held within the accounting profession. Although some do contain an element of truth, it is important not to take them too seriously, or allow them to obscure the truly effective marketing ideas and techniques.