Revenue Enhancement Innovation

I am proud to brag about one of my clients, Wall, Einhorn & Chernitzer, P.C., winners (for the second year in a row) of a Practice Innovation Award sponsored by Practical Accountant. Wall, Einhorn & Chernitzer, P.C. formed its Revenue Enhancement Committee (REC) about 18 months ago to focus client retention and acceptance, and on pricing. The REC meets monthly as well as communicates via e-mail between meetings.

Activities of the REC include:
· Establishing client acceptance criteria.
· Strategizing pricing options for clients and new business prospects.
· Evaluating the lowest realization clients (largest write-offs) for each partner and manager and brainstorming ideas to improve work efficiency and job profitability.
· Developing a Client Evaluation Form (and process) for use by managers to identify problem clients and solutions.
· Reviewing WIP adjustments.

The REC’s efforts have resulted in 10% improvement in realization. This is attributable to many factors initiated by the REC including better pricing, more discussions with clients regarding preparation they can complete to make our work more efficient, more up front discussions with clients about fees, and better management of fees incurred while work is ongoing.

The benefits of the REC’s efforts also include:
· More input from managers on client billing and about clients, in general.
· Many procedural features that improved WEC’s own quality control.
· Identifying additional service opportunities that were communicated to clients resulting in better client service and extra fees.

What I've learned so far is that marketing plays a role in enhancing a CPA firm's revenue. Understand how your firm works and how it makes money. Know your firm's client base. Assist your firm's partners and managers with revenue-enhancing ideas and implementation.

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"Your call is very important to us ..."

I recently received an e-mail to renew my online subscription to a well known greeting card company. Since I didn't use it very much (I still like to buy cards in a store and mail them) I decided to cancel my subscription. They didn't make it easy.

1. I couldn't cancel online. I had to call the company. If I didn't call my subscription would automatically be renewed.
2. I was placed on hold for nearly eight minutes and had to endure their on hold messages: "Never miss an occasion ...," "Ask about our print and mail option," and the popular favorite, "Your call is very important to us and will be answered in the order it was received."
3. When a company representative finally came on the line I was offered a free 90-day extension to my subscription. Of course, I declined because I'd only to have to go through this miserable experience again - if I remembered to cancel it in the first place. This is where the sneeky automatic renewal comes into play.

What I've learned so far is that client service is vital to the success of a business. This experience was quite annoying and left me with negative feelings about this company. How do your clients rate your firm's client service? When was the last time you reviewed the processes your firm has in place regarding client contact?

John McEnroe Fires His Accountants

Tennis legend and insightful sportscaster John McEnroe recently fired his accountants (“John McEnroe Is Still Pretty Complicated,” The New York Times Magazine, August 24, 2008) “only after his former numbers men of 10 years ‘dropped the ball’ several times.” Known for his high expectations and “You can’t be serious!” attitude, I find it interesting that he endured several mistakes before making the change. What I've learned so far is that client retention is an important business strategy. How many dissatisfied clients are hiding in your client list? What are you doing about it?

Marketing Budget Wastes

A couple of months ago I had the pleasure of presenting “Beyond Basic: How Your Marketing Budget Impacts Your Firm’s Strategy and Your Career” to the AAM-NY Metropolitan Area Chapter. It was an interactive session including how to build a marketing budget, how much CPA firms are investing in marketing, and the impact a marketing budget can have on a marketer’s career. Here are several ways that marketing dollars can be wasted:

• Spending money to reach the wrong prospects/contacts.
• Generating leads that aren’t appropriate for your firm.
• Failing to follow up on leads.
• Overemphasizing new leads.
• Investing in passive initiatives without active participation.
• Losing people on your Web site.
• Failing to get the most out of your email marketing.
• Not knowing what you get for your money.

To receive a free copy of my presentation e-mail me at jcaragher@capstonemarketing.com. Simply put "Free Presentation" in the subject line.

Summer Reading #2

Arrogant, self-centered, stubborn, and insecure - words that most people associate with ego. But, authors David Marcum and Steven Smith argue that the upside of ego is as powerful as the downside and answer questions that have been a mystery to most people. They provide compelling evidence and matter-of-fact answers on striking the balance between ego and humility to reach the next level of leadership. Case studies are used to illustrate how ego subtly interferes with success but also how ego sparks the drive to achieve, the nerve to try something new, and the tenacity to conquer adversity.

Egonomics: what makes ego our greatest asset (or most expensive liability) makes a great "book club" selection for your firm. With the strong focus on recruiting and retention in the accounting profession today it's important that you learn not only about your behavior but the behavior of your colleagues. "Often the hardest side of business to master is the human side, and nothing is more human than ego. How we manage ego on the human side affects everything we do on the business side, one way or the other."

Visit http://www.readegonomics.com/ to download a free book discussion guide and find links to buy the book.

Summer Reading #1

This book is a must read for all CPA firm partners and marketing professionals. The authors offer an integrated leadership model that they believe is necessary for professional service firms to remain successful. They identify four critical activities effective leaders must carry out:

- Set strategic direction

- Secure partner and associate commitment to this direction

- Facilitate execution of strategy

- Set a personal example of behavior

Many examples are used from CPA firms, law firms, consulting practices and investment banks.

Put aside the latest murder mystery or "chick book" and read When Professionals Have to Lead. You and your firm will benefit greatly.

Getting a Seat at the Right Table

I recently had the pleasure of speaking for the Greater Philadelphia and New York Metropolitan Area chapters of the Association for Accounting Marketing (AAM). While the topics were different - Managing Your Marketing Career and Marketing Budgets - a common thread ran through both presentations. How do we get a seat at the table? My initial response to this question is, "Be sure that it's the right table." If it is consider the characteristics of chief marketing officers (CMOs) and how to think strategically:

Chief marketing officers:
• See themselves as strategic thought leaders with an emphasis on the client.
• Their reputations hinge on the ability to demonstrate return on investment.
• Have a chief executive in their corner – someone who gets it and is a very public proponent of a more expansive, influential, and results-driven marketing organization.

Be certain that you are in synch with your managing partner’s vision of where the firm is headed.

Understand the “big picture” of your firm:
•Who are we?
•Where are we now?
•Where do we want to be?
•How will we get there?
•How will we know how we’re doing?

Determining strategies:
•Are we doing the right thing?
•Does the strategy meet/address critical issues?
•Is this aligned with our mission?
•Is this approach financially doable?