Firms that grow consulting revenue know the seven secrets to perpetual success.
Why advisory services will fail without a sales strategy
You already know that to achieve growth – “beyond glacial pace” as one four-partner firm said – accountants need to incorporate advisory services and consulting into their services suite. Our core compliance services have grown long in the tooth and are now thinly margined.
To provide clients the value they demand, remain relevant and expand, all signs point to consulting. For decades our profession – and most likely your firm – has been relying on traditional accounting services: mostly renewable annual engagements centred on tax and audit. In many firms, compliance work represents as much as 90 per cent of total revenue.
However, the shift to advisory services brings with it the requirement to continuously develop and manage opportunities that do not necessarily happen every year. As a result, a consistent pipeline process supported with professional selling skills will be the key to driving successful revenue growth.
Why professional selling skills?
Advisory services are not bought, they are sold. Statistics suggest the pivot to advisory services is under way but while we’ve seen consulting revenue inch up over the past three years within the Big Four (from 38 to 40 per cent of total revenue) and some substantial increases in the next 20 or so firms, for the remaining top 100 consulting revenue has stayed flat at about 17 per cent of revenue.
It seems there is more talk about doing it rather than actually doing it. What will take to substantially grow consulting revenue?
After 30 years of helping directors and partners of accounting firms achieve their goals, dreams and aspirations I’ve witnessed a common thread running through the handful of these firms that are bursting out the top. They meet and exceed their goals. They realise their visions and aspirations. They are always over and above expectations.
These robust, energised, continually successful firms seem to have a formula: “We will be one of these firms in this very small select group that achieves perpetual success.”
The common thread is seven-fold and more obvious than you might expect.
- Lead like a boss
What is it that leaders do that makes people want to follow them? What makes a leader effective?
The simple answer is a leader leads. They treat people with respect and value, and they lead their people and their firm as they charge forward.
- Put your team first
Sir Richard Branson says if you put your employees first they will work harder and ultimately become your most important brand ambassadors with your clients. The idea is employees come first, clients second and shareholders third.
Other CEOs like Craig Jelenik of Costco find similar success by putting their employees first. Costco goes head-to-head with brands like Walmart, Amazon and Target. Costco’s stock has doubled since 2019 and it is now the second largest retailer in the US behind Walmart.
Team first will have your people saying:
- I can’t imagine working anywhere else.
- I’ll never go back to working at a traditional accounting firm.
- It’s clear why people want to work here – everyone is encouraged and supported to be successful.
- Their business model allows teams to bring their whole selves to work every day.
- The culture here is irresistible.
- Get on the same page
When teams are not on the same page, things go wrong. Time, money and resources are wasted. Frustration builds and spreads throughout the team, and everything slows down. Mistakes are made. Quality takes a nosedive. Client loyalty is compromised. Blame, finger pointing, justification and throwing people under the bus emerge as a new skill set.
How can you attract and retain great people when some or all of this is happening?
Conversely, imagine a place where everyone is on the same page and the four major challenges of leadership and management – people, process, product and profit – work positively and in harmony.
- Make retention a growth strategy
The ultimate growth strategy has been in front of you all this time: Your existing clients. All you have to do is make them happy and then figure out how to provide even more value to them.
A KPMG study found that client retention was the most important revenue driver for businesses while Bain & Company calculated a high client retention rate could improve earnings by up to 95 per cent.
Furthermore, it can cost up to five times more to attract a new client than it does to keep an existing one.
- Sell, sell, sell!
Firms that are bursting out the top close the gap between limitations and possibilities when it comes to their business advisory services. They have found the missing piece: advisory services are not bought, they are sold.
When you think about it every business is two businesses. There’s the one that does the work and the one that sells the work. You know that if you don’t, won’t or can’t sell the work, there’s no work to be done. No work, no clients, no sales, no cash, lights out.
If advisory services are on your growth agenda then training your team in professional selling and having key team members’ sales managed is critical.
- Rely on a structured referral program
We all know how powerful referrals are. Together with word-of-mouth marketing and advertising they make up about 90 per cent of all new lead opportunities for small to medium size businesses.
You also know there are few guarantees in business, but if you already generate 20-80 per cent of your revenue from referrals and word-of-mouth using no formalised referral strategy, them imagine what you could do with a structured, formal, scalable referral method that delivers as many referrals as you want, when you want and of the type you want.
- Believe in personal and professional development
I have to confess to something here because it is an all-consuming belief I have about leadership, business, and life: leaders are readers.
I’m not alone in this belief. It was Harry S. Truman who said, “Not all readers are leaders, but all leaders are readers.” Many world-renowned business leaders often quote Truman’s philosophy as one of their keys to success.