Marketing value: a well-rounded marketing plan can showcase your Type-2 services

California CPA, June, 2005 by Chris Frederiksen

The CPA profession is undergoing numerous changes that are reshaping the way we practice and require increased attention to marketing.

One key change is the migration from total dependence on Type 1 (historical) services to a blend of Type 1 and Type 2 (future-oriented, value-added) services.

VALUE-ADDED SERVICES

Most progressive CPA firms are offering value-added services, which are more interesting, add more value for the client and are more profitable.

Value-added services that offer the greatest leverage are financial services and strategic services. Financial services include investment advice, money management, insurances and mortgages, and focus on all areas of a client's financial well-being.

Strategic services include strategic planning, profit improvement, benchmarking, cash management and KPI analysis.

These financial and strategic services are comparatively low risk, high reward and relatively easy to add to a practice.

But they are discretionary purchases for clients and therefore have to be more actively marketed, unlike historical services, such as accounting, tax and audit, which largely sell themselves because clients need these services.

The first step in your marketing program is to determine your marketing focus by considering the following:

* Can we (or do we want to) focus on a particular industry, business or profession?

* Can we (or do we want to) specialize in a particular service or product?

* Can we do both?

A MARKETING MANAGER

The most crucial step in ensuring marketing success is hiring someone to manage and coordinate the effort. In small firms, this is usually a part-time position and, if you have a minimal budget, a student sometimes can successfully fill the role.

What doesn't seem to work is a split position, someone who works half-time as an administrator and half-time as a marketing manager--marketing always draws the short straw.

A marketing manager should have excellent social and writing skills, database management skills, event organizing skills and, most important, a willingness to do phone follow-up work.

Your marketing person will need some basic tools, the most important of which is a contact management database system, such as ACT, Goldmine or Maximizer. These systems, which cost less than $500 for a stand-alone package, are custom-built for marketing. Each person, company or contact entered in the system can be tagged with an almost unlimited number of attributes and allow the database to be sorted in various ways.

THE FIRM'S IMAGE

If you haven't done a client satisfaction survey in a while, your marketing person can tackle this chore to get to know your clients and collect useful information. A client survey should find out:

* Services clients are buying and whether they are happy;

* Services clients are buying elsewhere;

* Services clients have no interest in; and

* Services clients think they might need or want.

One question the survey should ask is "Have you, in the last 12 months, thought about using a different accounting firm?" If the answer is yes, you have an opportunity to do something about it.

Another initiative is to focus on the firm's image--developing or upgrading your logo, tagline, collateral and "look."

As you develop and market your value-added services, collateral materials become a necessity. No one is likely to believe that you are a specialist in a service or industry unless you have brochures and booklets that document your expertise.

You also need a dynamic website, which is updated constantly with new and interesting information. There are a number of commercial companies that will develop, maintain and regularly update your website at a reasonable cost.

MAINTAINING RELATIONSHIPS

There are various ways to maintain relationships with clients, including:

Letters--Send three to four letters a year on different subjects.

Postcards--These are less expensive to prepare and send, and many firms report better results than with letters.

Newsletters--Periodic newsletters can include everything from a partner or employee spotlight, to a client interview or a calendar of upcoming due dates.

E-newsletters--E-newsletters are a simple, effective and affordable way to build and maintain a huge recipient database. E-newsletters should be short--one or two paragraphs--and focus on one subject, such as 529 plans.

Marketing experts say to "touch" your clients once a month--here's an easy way to do it: phone follow-up.

Your marketing manager should periodically phone clients to make sure they are happy with your services--or to identify additional services your firm can provide.

As more CPAs depend on value-added services rather than historical services for their livelihood, an effective marketing program will be a key to success.

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BY CHRIS FREDERIKSEN, CPA

Chris Frederiksen, CPA is a Mill Valley-based consultant to CPA firms worldwide. You can reach him at chris@frederiksen.com.