You’d think that a strength in accounting practices would be the measurement, recording and analysis of the key metrics of business activities important to future prosperity.
After all, recording, validating, calculating and benchmarking financial and other data is a key core competency.
However, cobblers’ children tend to be the worse shod. And cobblers certainly is the case when it comes to attempts by the typical accounting practice to measure returns from their marketing expenditure.
An odd photocopied compilation of press cuttings circulated around, some anecdotes about how a seminar generated a good lead, a bought-in generic survey on name awareness. This is typically as far as it goes – certainly little attempt to relate expenditure and activity to results.
This failure leads accountants – who generally regard cutting activity as money saved rather than an opportunity lost – to view marketing as a cost rather than the necessary investment to achieve their ambitions.
Hence the knee-jerk reaction to cut marketing expenditure in the face of a tough economic climate.
Only mugs believed Gordon Brown when he said there would be no more boom and bust in the UK. Many accountancy firm clients are now suffering and freezing their expenditure.
But this is not permanent and they will be back buying at some point in 2002 (2003 if you are a real pessimist). Either way, many sectors are less affected by downturns or are counter-cyclical.
There is still work out there, but firms need to be more aggressive and resourceful in getting it and more, not less, skillful marketing and sales support is required.
Developing partners and building up practice areas is expensive. Axing teams because of a temporary downturn seems a high-cost solution when the costs of redundancy payments are set against the modest size of a marketing budget – particularly given many will reappear as competitors at other firms.
Practices that cut back on their sales and marketing every time the economy hits a rough patch will find that, when the upturn comes, others will have formed the critical relationships with the decision makers and will have the pole position for appointment.
I predict firms storming up the next Accountancy Age league tables will be those which have looked for the opportunities currently in the market and invested in seizing them.
– Tim Prizeman is director of media relations advisor Kelso Consulting – firstname.lastname@example.org
ADDED VALUE BEATS RECESSION
One of the major mistakes of the last recession was the knee-jerk reaction to offload staff which left partners completing much of the day to day compliance work that their managers should have been doing.
Sadly, across much of the mid-tier things haven’t changed much since then, partners are still up to their necks in work that should be occupying a manager’s time.
With the possibility of the current downturn transforming into a full blown recession it is vital that partners are doing the right jobs and that a practice has a team of partners that can provide the right services for their customers.
Marketing is crucial. It’s usually underrated but it is wasted money unless a practice has the right configuration of partners to sell. What practices have to remember is that their survival is dependent on the survival of their clients.
In a contracting economy those clients will want more from their accountants than the man who comes in to do the audit. They’ll want less compliance and more real business support. In short clients will be casting round for real business partners, those that can provide added value.
Practice leaders will need to find the partners who can do that and put them in the frontline of driving the firm through recession.
In other words a practice needs the people who can stabilise or turn around a client’s business in order to ensure his firm avoids the ravages of recession.
This in turn will mean some hard choices and firms will not be able to duck the fact that they may have to lose some of their partners. Crucially this will mean that senior partners will have to ask whether they have the right balance of value adding partners to assurance and compliance men. Most firms will find themselves top-heavy with technicians and general practitioners.
Those who can add value in a business sense will have to be rooted out and tasked to concentrate on doing just that while leaving the more mundane work to managers.
In other circumstances firms may find themselves having to off load compliance partners in order to make room for the people who can help save businesses.
Undoubtedly these will be hard decisions and unpleasant ones. But for the firms to survive and progress they will be necessary.
– Phil Shohet is managing director of Kato Consulting.
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