Accountancy firms need to take control of client relationships rather than letting partners keep an unhealthy grip on them.
Firms need to put the emphasis on their brand and avoid allowing individuals to build their own mini-empires.
Fareeda said: “I know from my conversations with a number of Managing Partners in accountancy firms that one of their biggest frustrations is the lack of team spirit among their fellow partners and fee earners.
“Rather than individuals owning a client relationship and building their own mini-empires, the relationships should be with the firm and the firm should be focussing on building brand affinity.
“Many accountancy firms are simply shooting themselves in the foot by not seizing control of client relationships. If the relationship remains the sole preserve of the individual partner, they will naturally look at what they personally can offer their client.
“Whereas, if the relationship is owned by the wider firm then it opens up multiple other opportunities to cross-sell the rest of the firm’s services and products.
“You cannot underestimate the value of clients – they are a key asset in any firm. Partners need to work together to understand that the future growth and health of their firm will be that much greater if they talk about the firm’s brand rather than the individual.”
Fareeda said that another related issue was the failure of many firms to understand the importance of applying the “80/20 rule”.
In simple terms, this is the adage that 20 per cent of a firm’s customers produce 80 per cent of total sales.
Fareeda said: “The good firms are the ones which get the 80/20 rule and have the best systems in place to ensure that they are putting the maximum possible focus on the 20 per cent of clients which are essential to their business’s prosperity.
“Accountants are like any other business in that sales are everything. It therefore follows that you need to understand where your business comes from, who is spending the most money with you, what products and services they are buying and any trends and patterns in sales.
“You then need to ensure that the firm is making sure that those 20 per cent of clients are receiving as much love and attention as possible.
“I am constantly amazed by how many accountancy firms and businesses in general fail to grasp the importance of collecting and mining their sales data, especially as there is some very cost effective software available these days to help speed up and streamline the entire process.”
Another new trend was the growing number of accountants which were choosing to outsource their marketing rather than recruit in-house personnel.
As many businesses continue to keep a tight grip on expenditure, a popular option is to hire experienced independent marketing professionals to handle specific projects.
Fareeda, said: “We have seen a surge in enquiries from firms of accountants. We have had enquiries from larger firms where there have been recruitment freezes or redundancies and where there is significantly less marketing resource available, while we are also kept busy by smaller SMEs which couldn’t even contemplate recruiting a full or part-time marketing manager in the current economic climate.
“By outsourcing to companies such as FRJ, companies can still go ahead with certain marketing projects or campaigns, but without having to incur a long term overhead. We are finding that more and more clients are looking to work with us on a specific piece of work within a defined time frame, rather than longer term retained relationships.
“Traditionally, a lot of accountants have viewed marketing and business development as a cost rather than a business generator and it is often the first thing they will look to slash and also advise their clients to cut in difficult times.
“The outsourced model provides them with a kind of halfway house – allowing them to have marketing support but avoiding over commitment. There continues to be a need to change the mind-set of accountants, but this trend is definitely a step in the right direction.”
Read the published article in Director of Finance Online.