In today’s rapidly evolving business landscape, advisory services have become a crucial component to sustainable growth for certified public accountants (CPAs) and their firms. The truth is, the modern CPA needs to act as a multifaceted advisor across all their service offerings and develop a deep understanding of their clients’ needs.
That said, I believe there are at least four steps CPAs can take to help pave their path to growth.
To effectively advise clients, it’s essential to understand who they are and what they care about. A recent Clearly Rated survey of accounting firm buyers identified key trends that are considered when selecting a service provider. What they found was that clients today are looking to “de-risk” their buying decisions by seeking reputable professionals with strong performance metrics, referrals, and testimonials from current clients. What’s more, the survey found that industry specialization and timely thought leadership play a significant role in attracting and retaining clients.
Consider a CPA or firm that caters to the chief financial officer (CFO) or an equivalent role within an organization. In many small- and medium-sized entities, for example, the CFO is responsible for a myriad of functional areas, such as accounting, payroll, human resources, information technology, risk management, security, and financial planning and analysis. Because CFOs are pulled in so many directions, there are dozens of priorities that consume their time and energy. Therefore, CPAs advising CFOs must diligently stay curious and ask questions to uncover what those priorities are to better understand and serve them.
One of the significant challenges firm leaders face in executing their growth strategies is “cross-serving,” or providing multiple services to a client. It’s often said that it should be easier to extend an additional service to an existing client rather than obtain a new client, yet I’d bet most of us that have led a firm would suggest that our cross-serving efforts have been largely ineffective.
Cross-serving clients requires different skills than providing a single, high-quality, technical service, which is what the typical CPA has been formally trained to do. Beyond the technical skills demanded of the service, effective cross-serving requires curiosity, strong listening skills, and patience, with touches of creativity and vulnerability.
To extend a new or additional service offering into a relationship, it’s critical to understand your client’s priorities for the next 12-18 months. If you’re trying to offer a product or service to a client that doesn’t address one of their priorities, it’ll be an extremely tough sell. This is why getting curious about your clients’ needs, brainstorming how you can help them, and offering solutions that align with those needs is critical. Unfortunately, this doesn’t always happen.
In his book, “Getting Naked: A Business Fable About Shedding the Three Fears That Sabotage Client Loyalty,” author Patrick M. Lencioni addresses what may be getting in the way of building and maintaining such a thriving client relationship:
These fears manifest themselves when we don’t bring a certain amount of vulnerability and empathy into our client interactions. We feel we need to, or are expected to, have all the answers to a client’s problems on the spot. Rather, I’d suggest growth-minded CPAs should be asking clients more questions, even if it’s uncomfortable, to better understand them and their needs. Only then can we adapt our skills and offerings and cross-serve effectively.
I’d be remiss to not mention technology’s role along the path to growth. Many firms are already adopting new technological solutions to help identify client needs, such as Introhive and Propense.ai. These solutions are aimed at improving client relationships and increasing the number of services per client. They also provide insights into what services a client may be interested in based on the buying habits of other clients with similar profiles and other market intelligence. If you struggle to cross-sell and then cross-serve, perhaps these tools or others like them could help. Of course, to be effective, these technologies require accurate client data and proactive learning and utilization of the tools. In short, adopting technologies that support your growth are critical to building a sustainable practice in today’s marketplace.
Lastly, to stay competitive, firms must continue exploring and implementing new and advanced service offerings to support their growth. For example, private equity investments and value creation plans that focus on both organic and inorganic growth strategies are becoming more prevalent. Organic growth could involve enhancing existing services and client relationships, while inorganic growth could include mergers and acquisitions to expand your firm’s capabilities and market reach.
But growth doesn’t have to come at the expense of a merger, acquisition, or private equity investment. By reshaping your firm’s traditional CPA service offerings—whether through increased use of technology or deploying a global talent mix, among other relevant strategies—your firm can free up valuable time for providing better, and more personalized, client service. After all, clients are increasingly expecting proactive and thoughtful advice from their CPAs. Therefore, your service model must change to meet these expectations, which may require additional investments in learning and development to deepen your, or your team’s, industry specialization.
All in all, the shifts that are occurring in the marketplace demand growth-minded CPAs to act now and expand into more advisory offerings. By honing your advisory skills and strategies, you’ll not only create more opportunities for your firm’s sustainable growth, but you’ll also open yourself to “new ways to CPA.”
Reprinted courtesy of Insight, the magazine of the Illinois CPA Society. For the latest issue, visit www.icpas.org/insight.