When you need petrol where do you go? Despite TV ads promising lower emissions or whatever, chances are you will still buy at the station with the cheapest petrol prices, assuming the station is close at hand when you see a need. It is typical for customers to evaluate available, commodity products (like petrol) and choose the service provider primarily on a price basis. You buy petrol because you have to, not because you want to. Simply put, when competitors offer the same product, lowest price almost always wins.
Accounting firms and bookkeeping practices operate in a highly competitive market, and if your firm only offers commoditised services like BAS returns and basic bookkeeping, you will inevitably lose customers due to price sensitivity. The good news is that you are in a unique position as the professional who is (usually) the first responder to your SMB client. In short you are the trusted advisor.
That’s a level of trust that offers you the potential to move beyond traditional bookkeeping services and into higher value, advisory or packaged-services work.
What do clients want?
Some SMB clients may believe they want a low cost, reliable provider to do their books and to ensure they are compliant in GST and tax, but good clients want more; they want one of two things – to have the best business in their industry or to improve their business so they can sell it. How then, does this include the bookkeeping professional or firm?
The trusted advisor should play an integral role in helping them determine how to do each of these things and to value this support. Yet business owners are often so wrapped up in their day-to-day operations that they lack the time to invest in gaining a healthy understanding of themselves.
Services for sale
A laundry list of advisory services will not sell itself. It’s likely that the more proactive business owner will be the prospective customer for higher value, advisory services so focus on proactive clients who frequently ask questions about improving their business. These clients tend be more appreciative and willing to pay for professional advice.
It takes time and a plan; but help a client do better business and you have locked-in a client for life. Quality advisory services help you forge deeper relationships with clients and also boost word-of-mouth referrals.
Identifying key clients
Each bookkeeping firm will have clients with which they already have a strong relationship. You will be more comfortable and they will be more receptive as you introduce new services. This is especially the case where a client is experiencing poor financial health. These may not be short-term fixes; but the client will perceive your services as a need rather than an extra expense.
In an environment where price commoditisation is the norm, there are compelling reasons why firms are shifting towards value-add advisory services, not the least of which is a service that can justify higher rates. Most firms we spoke to in April reported that advisory engagements are more profitable than traditional, compliance -based services. For more insights on how profitable bookkeeping firms grow their revenues, register for our Benchmark Report 2016, Australia’s first benchmarking survey for bookkeeping business owners.