Price vs value – stagnation vs growth… You choose!
I’m obsessed with helping firms of accountants run a better business – this means growing your firm’s profits. This means keeping all your valuable clients and winning new valuable clients.
Are you serious about growing profits?
A few years ago I ran a workshop for all the partners in the firms of accountants I consult with.
The workshop – held in a lovely little hotel by the river Derwent – was focussed on challenging these firms on the way they deliver value for money for their business owner customers.
Looking back, what stood out as the shining insight of the day was the need to establish crystal clarity on what your business owner customers’ expectations are.
It still occupies my mind to this day because there’s so much to be gained from this important insight if you only put it to work in your firm. It’s worth revisiting now…
This blog post is about your firm’s processes for capturing, recording and exceeding your clients’ expectations. Why are expectations so important?
1. Because only your clients can determine whether they receive value for money or not.
2. The value they receive is determined by the expectations they have before you start.
Whether your client’s expectations are high or low, if you under-perform then value is below their expectations.
This situation will prompt your client to question whether your price is too high and maybe even choose another accountant.
If their expectations are met (not exceeded, just met) then they might feel OK about the value received.
They may not question the price, they may not consider other accountancy offers.
But they might!
They might consider alternative firms because you only just delivered on their expectations.
You were nothing special.
…when you exceed their expectations (whether they are high or low), they feel as though they received a wonderful deal and happily use you again and even recommend you to others.
It’s unlikely other firms will get a look in and so you’ll secure their business for another year and lock in the GRF and their goodwill value to your firm.
You keep them.
You also increase the chances of them recommending you to other business owners and as a result grow your firms fees and profits.
Jan Carlson, in his excellent book Moments of Truth, about his transformation of Scandinavian Airlines, captured this insight best when he described 3 customer experiences:
- Miserable – expectations were not met
- Neutral – expectations were met
- Magical – expectations were exceeded
Jan Carlson took over the reins of Scandinavian Air at a time when the airline was suffering an $8 million loss and turned it around to a $71 million profit within one year.
Are you interested in expectations now? 🙂
Here’s the rub…
If you don’t know what your clients’ expectations are, how can you even think you can give them a magical experience?
So what is your firm’s process for identifying, capturing and recording your clients’ expectations every year? Focussing on your A-class clients first, does this help?
1. Add ‘expectations for next year’ to your pre-year-end client meeting agenda (add it to your post year-end meeting if you aren’t having pre-year end meetings)
2. Then have a discussion about the 9 things David Maister et al suggests you talk about in the book The Trusted Advisor in your pre-year-end meetings.
He recommends the following…
- Clearly articulate what you will and will not do
- Clearly articulate what the client will and will not do
- Define the boundaries of the analyses you will perform
- Check with the client about areas and people with whom the client does not want you to be involved
- Identify precise working arrangements
- Agree on methods and frequency of communicating
- Decide who should get which reports, how often those reports will be delivered and how they will be used
- Decide what milestones and progress reviews are needed
- Decide how success will be measured, both during and at the end of the process
OK, I know this looks onerous, but…
…continue with no expectations processes and you’ll continue to run the risk of losing valuable clients because you do not exceed their expectations.
You’ll also continue to be challenged on price.
And you’ll be missing out on positive word-of-mouth recommendations to grow your firm.
According to Jan Carlson, Moments of Truth are those critical times when a customer forms an impression of you, deciding whether your offerings and their standards see eye-to-eye.
The moment you start discussing expectations is a jugular moment of truth don’t you think?
Time to install your ‘expectations for next year’ processes?
Let me know your reaction and thoughts on this important subject, will you?