If you ask 10 CPAs for their definition of business development, you may get 10 different responses.
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But where they are likely to reach unanimous agreement - or at least an overwhelming majority - is that business development has evolved to become a critical function to the growth and profitability of today's accounting firms.
Whether it's soft-selling an existing client for extra services, strengthening an established practice niche, priming the merger and acquisition engines, or embarking on the often-arduous process of prospecting for new revenue streams, business development has matured by light years from when responsibility for firm growth often was thrust upon the shoulders of an already-overworked managing partner or director whose sales and marketing pedigree, more often than not, was lacking.
"[Business development] might be the most misunderstood word in professional services," said Thalia Zetlin, principal and chief marketing officer at New York-based Berdon, and one of the early advocates of business development, having made a presentation on the subject back in 1989. "Now it's taking on a life of its own. Twenty years ago, no one knew the word business development. It was called practice development and it basically consisted of what I call 'country club' marketing. That's how business was generated for accounting and law firms. But it's really one of the five components of marketing, along with communication, strategy and planning, database, and promotions and programs."
She added that communication and training are needed to create an efficient business development strategy so that each partner conveys a unified firm message - that of bringing together what the firm has to offer: "Whatever campaigns are undertaken have to reflect what you as partners do."
Marc Busny, managing director and chief marketing officer at CBIZ Tofias in Boston, agreed. "The two functions running independently doesn't make sense. We have integrated marketing and business development for over 10 years. Marketing executives create the campaigns and generate the leads, and the business development people follow up on them."
TAKING IT TO NEW LEVELS
Lisa Cines, who served as chief executive at Rockville, Md.-based Aronson for nine years, has now transitioned to head up business and corporate development for the 26-partner firm, which has a large specialty practice in government contracting that comprises more than 40 percent of the firm's niche mix. "We felt we needed to place more of an emphasis on business development," she explained. "We had to better understand the metrics of what was needed to grow the firm."
Under Aronson's new business development strategy, the firm found opportunities to lead with consulting work, as opposed to the more traditional engagements.
"Part of our business development initiative came out as a result of the fact that we needed our people to remain billable, as well as getting them out in the marketplace. And we could not do both. During busy season, many of your people basically disappear."
" We used to lead with the tax and audit engagements, she added. "But now we look for small consulting projects first - for example, such as whether a client's accounting systems are government-compliant. That began to open the door for us. By the time we were bidding on the audit, we had built a solid relationship with the client."
She revealed that over an 18-month period, consulting engagements garnered an additional $800,000 in revenue for the firm.
Cines said that the firm now has three full-time salespeople aligned by industry niches - government contracting, real estate and technology - and has augmented its corporate development strategy with niche reviews, expanding new and existing product offerings, and a "cutting-edge" CRM and sales-tracking system, along with business development-centric webinars, briefings, white papers and blogs.
She recalled that within one month of a new business development salesperson coming on board, the hire went with one of the partners to see a client. "The partner was wondering why he went on the call, because he didn't know anything about accounting. But he connected that prospect to three other potential areas in our firm. The business development folks are now getting invited to these type of calls."
"It used to be up to the managing directors and partners to spend time in the marketplace developing business," recalled Busny of CBIZ Tofias. "Now when they go on a call, it's to see a qualified lead. That limits the amount of time partners need to spend on non-billable activities."
"People didn't and don't go into accounting so they can go out and sell," maintained Nicholas Keseric, who heads up business development for Mulcahy, Pauritsch, Salvador & Co. in Burr Ridge, Ill. "But the profession is moving in that direction - similar to what happened to banking and in legal firms. Referrals are not necessarily coming in the front door, so you have to go out there and find them."
Like Cines, Keseric explained that it often becomes a question of billable vs. non-billable hours: "It doesn't take just one phone call to get an appointment, but several. And then there's the follow-up. It may take a prospect five to seven 'touches' to feel comfortable. That may stretch out to a one-to-three-year dance with a prospective client. It's hard to tell partners they will be responsible for 60 names they have to cultivate. All of a sudden a firm finds that it has up to 400 hours of non-billable time cutting into the revenue stream. As a firm you need to examine what's out there in the marketing and sales pools and bring someone in. The marketplace is too competitive not to."
He advised that the firm itself must make the commitment to a business development culture, requiring buy-in from everyone. "If a firm decides to go in and bring in a professional - they have to be committed to that. It's going to take a couple of years before there is any traction. Accounting, law and banking are commodity businesses. Accountants are going to have to think more like marketers."
Said Aronson's Cines, "The Big Four have been doing it for years. The challenge in business development lies in your return on investment."