Warning that the ‘clock is ticking’ towards annihilation for bookkeepers who don’t adapt to the new technology, commentators fail to grasp the real challenge facing the profession. What many are hesitant to say, but know is an issue, is that they are operating in an environment that is commoditising data entry and forcing fees down. And that doesn’t play to their real strengths of the professional.
Retaining clients is real challenge. The SMB customer pool may be expanding but so too is the pool of flat-rate solutions providers who are packaging low cost services and winning business direct from the SMBs. The threat is churn – where clients switch providers who offer these low cost solutions or more contemporary packages.
There’s a two–pronged approach which can not only provide a defence against such threats but also – for the savvy, business-minded bookkeeper – open up new revenue streams.
A glance at the infographic here reveals what many already instinctively know.
Value is appreciated when you bring more knowledge, you have more skills, you have more expertise and you have more training and experience. If the professional doesn’t place a value on these, the client is not going to value them. If you are only competing on price it’s going to be a race to the bottom and nobody really wins.
So strategy number one in the war against client attrition is to offer new services or you take existing services and add more value on top of it. The doomsday scenario will not stop the business-minded professional who brings value to a client as a trusted advisor: that’s what creates ‘stickiness’ in the relationship and mitigates against churn.
A bookkeeper is not just a data entry person, yet the treat of commoditisation is real. But a business owner is willing to pay more for an expert or consultant versus another data entry person. It’s now over to the industry to get real about data management, data analysis and reporting. It’s prime time to be that trusted advisor for the client and not to be viewed as the bookkeeper ‘doing the books’ and the BAS return. There’s a myriad of value add services that technology is making possible. .
Marketing 101: getting referrals
“I’m not a sales person,” is an oft-stated mantra from accountants and bookkeepers. As client-stickiness is built by adding value services, so too is the opportunity to ask for referrals. In the professions it remains one of the effective marketing methods, whether it’s online referrals or in line person referrals. It’s another defence against churn.
Professional services is a relationship-building activity and setting time aside for reporting is also a good time to add new services and/or ask for the referral. It does seem that many overlook their own client base (as reflected in the infographic).
Business owners are looking for someone to help them; to know if they are doing the right things. If you have been working with them for a while, you should already know how their business operates and their key ratios. Hence the opportunity to raise the importance of regular reporting of actual results against budget. That’s a win-win.