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There are plenty of opportunities for accountancy firms to win new
There are plenty of opportunities for accountancy firms to win new
David Sloane believes in providing a total client service. He’s found himself sending birthday flowers to one client’s mum, organising a doctor for another with the flu and arranging accommodation – complete with fresh towels and sheets – for a third who had just been released from prison. It’s all in a day’s work for an accountant servicing bands in the pop music industry. It also illustrates an important marketing lesson for accountants trying to build their businesses – understanding the culture and needs of your clients is one key to success. Sloane & Co’s experience could point the way for other small accountancy practices, many of whom are wondering which direction to take in the future – specialism can pay. But it’s not the only way forward for practices that want to make their business development activity more effective. There are many different approaches, but a common theme is that most are founded on well thought-out strategies and adopt effective marketing and sales techniques. Take the case of Independent Accountancy Services. By the late 1990s it had become a leading specialist providing accountancy services to self-employed IT contractors. Rather than assuming it had its niche market covered, it decided to investigate ways to strengthen its position by developing a new brand identity. The firm employed researchers to set up focus groups of contractors and find out more about them – not just their business and financial needs, but their lifestyle and hobbies as well as which other brands most excited them. ‘We learned about the demographics of the contractor market,’ explains Tina Jeavons, the firm’s marketing director. The company also employed consultants to interview its own staff and research the values that underpinned the firm. The result: the company was renamed giant – all defiantly lower case – in a major rebranding exercise. ‘We wanted something that would fit in with the language of our clients but also have a bit of attitude and make us stand out from the crowd,’ says Jeavons. But, significantly, the rebranding is rooted in solid business strategy. Jeavons says: ‘It’s not just words or an artificial strategy. Our brand personality is bright and witty with strong language and visual presence but it also conveys that we have the experience to deal with their accounts.’ As both Sloane & Co and giant have discovered, there are plenty of opportunities for accountancy practices to develop business. But a new research report Winning New Business in Accountancy … the Critical Success Factors (details at the end of this feature) suggests there is a wide gulf between a group of ‘superbidder’ accountancy practices, which win most of their pitches for new business, and the also-rans who tag along behind. The superbidders outperform the also-rans on a whole range of issues from positioning themselves to attract invitations to pitch for new business through understanding and communicating with clients to handling the final details of the negotiations for a contract. Researchers, led by Colin Coulson-Thomas, professor of competitiveness at the University of Luton – and himself an FCA and FCCA – studied the new business development process in 82 firms of accountants. In all, researchers looked at 128 different activities and issues which might influence how successful a firm would be at winning new business. Then, using a purpose-built database, they correlated the results from these 128 issues with those firms which won the highest proportions of new business pitches. Researchers discovered that practices which want to be more successful at winning new business need a combination of positioning and marketing strategies. ‘Successful firms are working hard to differentiate themselves, demonstrating how they add value beyond the basic accountancy service,’ says Coulson-Thomas. ‘Specialising in niches, whether of service or client, is one way to demonstrate that you have more to offer than the general purpose accountant. Other firms have found that, as the Big Five have got bigger, whole areas of the market have been freed from the competition from above.’ Sheena Sullivan, Pannell Kerr Forster’s business development partner, agrees. ‘The big firms are in the process of disposing of their smaller clients. The Big Five are focusing on their best prospects for profitable growth which are large multinational groups. Five years ago, there was a question mark over the future for medium-sized firms, but most people now recognise a place for mid-tier firms.’ But whether small or medium-sized, there are growing problems which make it more difficult to win new accounts. One trend uncovered by the research is for clients to increase the size of shortlists. This means that firms whose acquisition of new clients has traditionally hovered around the ‘statistical’ chance of winning, say, one in three pitches from typical three-firm shortlists, now find the task tougher as shortlists creep up to four or five. The costs of pitching for more accounts – but winning fewer – can be a significant drag on profitability. One important fact uncovered by the research is that those firms that have the best ‘hit rates’ for winning new business qualify potential clients much more carefully than the also-rans even before they decide to pitch. For example, the most successful bidding practices are around twice as likely to rate the potential return from the project as very important as their less successful competitors. Similarly, they attach much higher importance to the quality of the client, the type of project, their experience at similar projects and their knowledge of the client’s business area. So, even before they have started on the expensive work of putting together a proposal and mounting a pitch, the most successful have focused more tightly on those issues which could determine their chances of success. Another area which marks out the most successful, according to the research, is how firms set about preparing a pitch for new business. The most successful firms are more than twice as likely to include staff with special subject or client knowledge in the bidding team than the least successful. And the most successful also put more effort into researching the client and its market. Coulson-Thomas says: ‘Firms that apply the principles of winning new business are finding that not only can they achieve growth, even in flat markets, but they can determine the shape of their own business. ‘Rather than accepting every customer that comes along, they can actively target and develop the clients they want to work with and, thus, have both more profitable and enjoyable careers.’ A brochure describing the research report Winning New Business in Accountancy … the Critical Success Factors is available from Policy Publications – tel: 01234 328448, or e-mail: email@example.com WINNING AT ENGLISH NATURE The story of how Pannell Kerr Forster won the internal audit work for English Nature against 11 competitors illustrates many features of best-practice business development, writes Mick James. The invitation to pitch was evaluated at senior level. Partners looked at the size of the client and decided it would be a ‘good fit’. The next step was to prepare a formal response to the invitation to tender. ‘If you think it’s worth going for, you have to make sure you devote sufficient time and resources to doing it properly,’ says partner Tim Drew. Once PKF had decided to bid for the work, Drew determined to present a custom-built proposal. ‘Clients always know when they are getting a standard proposal document with the names changed,’ he says. ‘I really believe you should start with a blank sheet of paper, otherwise it doesn’t hang together.’ Drew and his team backed the proposal with a great deal of research. Staff on PKF’s consultancy side had already worked for English Nature and provided background information. Drew also asked if he could meet English Nature to gather more background. Meeting the client helped with the decision of who to put on the pitch team. ‘Some people are immediately very commercial and in your face, others are friendly and relaxed,’ says Drew. ‘So you put different people on the pitch team.’ Now the team began composing the proposal document. Says Drew: ‘We go through what they are looking for, their aims and objectives and then how we can help them – in that order. We also try to offer them something they haven’t thought of, but which is related to their need. In this case, it was a particular internal audit service we had.’ Drafting the proposal took several days. ‘We go through stages, drafting, laying it out, checking grammar. I always get someone else to read it to see if it reads well. As internal auditors, you’re going to be producing a great many reports for them to read. If the tender document is a nightmare, then what’s it going to be like working with you?’ A key decision was who to take to the pitch. ‘It’s useful to know how many there will be on the client side – you don’t want to have six to their two.’ The presentation had a tiered format. Drew introduced the team and explained the format of the rest of the session. Next, the engagement manager went through the top-level material – how the work would be organised and his own role. Then, the senior talked through the detail of the work he would do. Finally, the engagement manager talked about the alternative service PKF had to offer. Drew came back at the end to round things up. ‘We talked for 25 minutes and had 25 minutes of questions at the end,’ says Drew. And Drew’s secret of success? ‘You have to ask what they are after and whether we are telling them what they want to hear.’ – Mick James is a freelance journalist.