Build solutions, not services, to drive growth
It’s a new year! And for many firm owners, that means change. If you are like me, you’ve taken some time to reflect on the past year and pinpoint areas for improvement. As I reviewed 2018, I realized that the profession as a whole hasn’t changed much in terms of what we offer. Many firms have stayed true to a core set of traditional services — which are not necessarily what today’s clients want or need. So, now into a new year, I set a new goal: to build solutions, not just services, to drive both firm growth and client satisfaction.
Before we jump into what I mean by building solutions and not services, it’s important to first understand the logic behind this strategy. Essentially, the goal is to offer a premium set of packaged client solutions that are easily understood, that are repeatable, and that are priced consistently with the quality your firm will deliver. To make this a bit more clear, I’ll lean on my go-to business example: Starbucks. Starbucks offers a select and premium set of products ... all priced consistently with the value delivered. The company has clearly identified what they do well — high-end coffee products. Patrons don’t go to Starbucks and expect to get a cheeseburger, Diet Coke or salad. Starbucks sticks with a premium collection of products, supported with superior service. And because they do what they do so well, clients are willing to pay a higher price because of the perceived value ... very similar to our firms.
Further, Starbucks has successfully built their product offering to be easily repeatable, even allowing for custom variations. Whether it’s an order for a cappuccino, a nonfat cappuccino, or a nonfat cappuccino with a double espresso shot, staff can accommodate varied requests via simple adjustments to a core product. The company has successfully productized their offerings in a way that is repeatable and easily understood by their expansive consumer base. So, whether a client is standing in line viewing a menu or ordering from the convenient Starbucks app, they understand their choices and can painlessly request exactly what they want.
About now, I’m sure you’re thinking that Starbucks is nothing like an accounting firm, so why this example? However, if you really study the company’s model ... we are more alike than you think.
To take this example just one step further, it’s also critical to understand just how powerful Starbucks’ business model is. Because the company focuses on offering a limited, premium product set and has productized their offerings in such a way that makes them understandable to millions of customers, they’ve built a strong and ever-growing enterprise.
Now, to connect all this to an accounting firm: First and foremost, most accounting firms are too complicated in terms of service offerings. This makes it confusing for both staff and clients. Traditional services tend to be built in such a way that they are not repeatable. And often services are based on an individual client’s need — leaving any chance at standardization far behind. Forget this old mode of operation and imagine taking the multiple variables from your current services and building out a finite set of solution packages — solutions that are easy to understand and sell ... that are repeatable across clients and support standardized workflow processes. In doing so, firms are better positioned to experience elevated efficiency and enjoy much higher profit margins.
The way it’s always been done
Broadly speaking, our profession has traditionally provided five common service lines:
1. Tax planning and preparation.
2. Client accounting (bill pay, reconciliations, financial reporting, payroll).
3. Business advisory (business start-up, retirement planning, entity structure planning, budgeting).
4. Attestation (compilations, reviews and audits).
5. Succession planning.
And while on appearance alone this list looks finite and structured, what happens is that firms consistently reinvent the wheel with each new client that walks through the door. For example: A new business owner calls and is interested in best practices for getting her business started. What might run through your head is a list of potential service needs, such as:
1. Entity structure;
2. Retirement planning;
3. Owner salary structure;
4. Employee versus independent contractor rules;
5. HSAs and other benefit options;
6. Federal and state laws for revenue recognition, deductions, document retention and proof; and,
7. Recommended technologies to best operate the new business.
Our tendency is to string together disparate service options with each new client, which means we are constantly starting from scratch.
Now, imagine this same scenario, but instead you now have an “off-the-shelf” product to offer — a standardized presentation and proposal that walks a client through all phases of business startup from entity structure to required technologies. This product is repeatable across clients, could have a fixed priced and should provide immense value to not only your clients but your staff. Consider next creating a structured solution for every service you deliver. Can you imagine how much more efficient and effective your firm could be ... and how much higher you could elevate the client experience?
This way of thinking, of productizing services, is nothing new. Firms have been doing this for years with outsourced client accounting. Think about how much firm operations would be improved if we productized all of our services — for example, from an initial business start-up product to outsourced client accounting and advisory services. Repeatable solutions not only make sense in terms of efficiency and firm growth, but also allow us to offer clients the solutions that they really need — packed with focused services designed to support their long-term growth and sustainability.
Like I said, this concept is nothing new. What I’m advocating is that firms start to move beyond client accounting and payroll packages. The goal is to turn nearly every repeatable piece of advice you offer into a packaged solution. This is doable across the services board, including tax planning and preparation, client accounting, attestation, succession planning and almost every aspect of business advisory services.
Moving to this model takes an initial time investment and ample thought and planning. However, once you’ve defined your solutions, it’s simply a matter of maintenance. For example, once you’ve created your retirement plan package (which, remember, offers standardized, repeatable advice), you’ll need to keep current-year contribution amounts up to date. Be sure to apply the same level of maintenance to each solution you devise.
So, where to begin? This is a common question, and my answer is always the same (repeatable): Start simple. Don’t assume you have to create a product package for every single service you offer. Simply start with the services you currently repeat over and over. Begin by developing a presentation and proposal for, perhaps, business start-up services. Once you have one product under your belt, the others will come easy. After a while, you’ll begin to experience the ease of pulling a product “off the shelf” to address a client’s need. You’ll also start to feel the growth potential of operating under a repeatable business model. I’m also confident your clients will feel the positive change as well.
For many in the profession, you’ve been operating the same way for years. Make 2019 the year you move away from offering basic services and into easily managed, repeatable, and highly valuable client solutions.
Subscribe to Darren’s "Better Every Day" podcast on iTunes or listen at rootworks.com/podcast for a deeper dive on the topics discussed in this column.