CHAPTER 2

Where Are You Headed? The Importance of a Marketing Plan

“Road trip!” There was a day when those words would elicit great excitement and anticipation in most of us. But as we’ve matured, the idea of throwing a toothbrush and bathing suit in a bag and jumping in the car with some recent acquaintances isn’t quite as appealing.

Although throwing some caution to the wind might sound appealing, we all know that a good road trip or family vacation takes a huge amount of actual planning. First, where do you want to go? What do you want to see along the way and when you finally get to your destination? What clothing will you need for the weather where you’ll be? Does it make more sense to drive or fly, and which option will cost you less or be more fun? Who are you taking with you? Is this a romantic getaway for you and your spouse or a trip where the kids come along? How long will you be gone and who will take care of the pets and mail while you’re away?

Spontaneity sounds sexy, but ultimately we all know that proper planning is important. This goes for most things in our lives really. You wouldn’t buy a house without looking into the neighborhood, insisting on an inspection, and assessing whether it will fit your family’s needs. Your car purchase involves much more than going to the lot and plopping down some cash. For most people the process includes online research, talking to friends and family, and looking at the interest rates you can get on a car loan. You even plan your lunch hour so you can get the food you are craving and still have time to run by the pharmacy to pick up your prescription and a gallon of milk for tomorrow’s breakfast cereal.

Admit it: we have to be responsible planners or else very little gets done. Yet I find that the same attention is rarely devoted to the way accounting firms market their services. This isn’t meant as a criticism because most CPAs simply don’t think about marketing this way. But it’s a serious oversight because careful strategic planning is vital to getting the results you want. Too often I’ve seen firms jump on social media because the competitor down the street did without thinking about why they decided to make that move. Or they might add a new service to compete with that firm that drives them nuts because that firm seems to be growing at a much faster pace than their own. This “fly by the seat of your pants” type of marketing strategy might work from time to time in the same way that tossing darts blindfolded may eventually turn up a bull’s eye. But wouldn’t you rather spend your money and time doing things that are well planned and more likely to yield the results you want? This is where a marketing plan can help your firm.

So what does creating a strategic marketing plan entail? Don’t worry; it’s not as hard as you may think. More than anything else, it requires that you take a very close look at your firm and what you want to accomplish. In this chapter, I will go into some of the sections that your plan should contain and the questions you will need to answer carefully and honestly to uncover the best marketing strategy for YOUR firm. Marketing plans are not one-size-fits-all.

BUILDING YOUR MARKETING PLAN

A marketing plan should define what your firm is going to do over a period of time, perhaps one to two years, to secure your place as a recognized firm in the industry and with the markets you want to serve. Always keep in mind that marketing is a process, not an event. I hate to break it to you, but you never get to check marketing off your to do list completely.

Additionally, your marketing plan should not be a big document that sits on a shelf collecting dust once it’s written. It should be your frequently consulted road map for how you are going to make clients and prospects aware of your services on a continual basis. Just having a marketing plan does not guarantee success either. If the plan isn’t carefully considered with input from all supporting functions, it will most likely fail. The same is true if the goals, objectives, or action plan are unrealistic or not measurable.

Business Analysis

Services

It’s important to clearly define your services. Now, before you roll your eyes at me and say, “Duh, we offer accounting services,” let’s take a deeper look at what you really do. Make a list of your primary services as well as those that you offer from time to time. Go into more detail than “tax” and “audit.” Do you focus mostly on pure compliance work or do you offer quite a bit of planning as well? Do you offer accounting services like bookkeeping and back office outsourcing for your small business clients? Have you recently added a risk advisory offering that you want to see grow? Take a bit of time and be as thorough as possible.

Now think about the benefits that these services provide to your clients. As with nearly everything in this plan, it is important to think about what you do from the clients’ perspective, not just yours. Are you simply keeping them out of jail by filing tax returns on time, or are you doing more for them and their businesses? You may want to ask a few of your clients what they see as the benefits of the services you provide because their perspective might be different than you expect. Peace of mind, time to focus on other functions, and important financial advice may rise to the top here. Your clients might surprise you with completely different answers. Either way, they should have no trouble identifying what it is they get out of the services you’re providing. You can offer all the services in the world, but if your clients don’t see value in them, it’s wasted effort.

Do you know which of your service offerings is the most profitable? I’m surprised that many accounting professionals can’t answer this question for their own services even though they may spend all day helping their clients figure out this information. Much like the benefits we’ve already discussed, if you are losing money or merely breaking even with a particular service, should you really go out of your way to promote it? If you haven’t already, take a careful look at what percentage of your revenue comes from the different services you offer and the realization you get from each one. Go back at least three years on this exercise to ensure you aren’t focusing on anomalies but instead getting a clear picture of your firm’s revenue sources and the services that are most profitable.

On the flipside, which of your services earns the most positive feedback? Your clients are a great source for this information, and it may help you determine which service(s) should be the focus of your marketing efforts. You may be the best provider for litigation services, but if your clients don’t need it or think you excel in this area, it might not be all that important for your firm to focus its marketing efforts here.

Finally, which of your services would you like to see grow the most? You may offer many more services than those that you actively market. This is common and, in most cases, recommended. You don’t have to create campaigns around everything you do. Ideally, you want to focus your marketing efforts on no more than a handful of your services, otherwise it’s hard to develop clear messaging, and your efforts will get muddied in the mind of your target audience.

By answering these questions and those that we will include in the rest of this chapter, you should be able to clearly identify the services that bring in the most revenue or, ideally, create the most profit for your firm. Hopefully those are the same services that your clients most value. If you’re very lucky, they are the services you enjoy providing and have the staff to support. See exhibit 2-1 to help you make your own list.

Competition

Everything would be a whole lot easier if we didn’t have to deal with those nasty competitors, wouldn’t it? Why in the world do businesses that could be perfect clients for your firm pick the competition instead? Who do they think they are, claiming to have “great people” when you clearly have the best team in town?

Although we may not like to think about it, we all have competition. Some competitors are obvious, and some may fly a bit under the radar. Regardless of how you feel about your competition, it is important to know who it is and what these providers are doing at their firms so you can counter effectively with your own marketing efforts.

First, make a list of your primary competitors for each of your services. In most cases, this list will include other local accounting firms—you know, those guys you nod at politely at social events but secretly wish would just go away. This list may also extend beyond your geographic area for some services depending on what you do. For things like bookkeeping services, your competition can be your client’s internal staff or cloud solutions like QuickBooks Online or Xero. Be as thorough as you can and make sure you get input from the firm members who work at client sites in the field, if available. They will have even more inside information than those who tend to stay in your office.

Now we should look at how each of these competitors, the main ones at least, position themselves in the market. By this I mean: what is their reputation or “personality”? What is their marketing strategy? Are they the super buttoned-up, navy blue suit firm that targets only white-collar, high-net-worth individuals and the companies they own? Or do they have a more laid-back reputation, host an annual pig roast, and work with the blue-collar professionals in town? Do they serve a particular industry niche(s) or distinguish themselves as the firm with a high level of expertise in a particular service offering? Are they the firm where college grads go to cut their teeth then move on, or is their employee turnover hovering near zero? Don’t let your frustrations with them color your comments. Take an honest look at their positioning and discuss them openly with your team to ensure the list is accurate and complete.

Market Analysis

By now you should have your services clearly defined and have a good picture of your competitive landscape. Let’s focus for a few minutes on the bigger picture of the market in which you operate. You should include both macro- and micro-elements in these observations to determine how each may affect your firm and also help you determine where it makes the most sense to focus your marketing efforts.

What do I mean by all this? Simply put, you live and operate in a market of some sort and outside elements can affect it. Macro-elements are things like the economy as a whole and the situation faced by the industries you serve. Back in 2008, if you had a real estate focus, it would have paid to determine which other industries you could serve because that one was hit hard and companies were going out of business left and right. Now, if you offer retirement planning or other services valued by the huge baby boomer market, you should be golden. Additionally, look at micro-issues like the prevalence of the type of client you want in your geographic area. Does your target market value the services you provide and can they afford the prices you charge? Where are your potential clients likely to be? Are they large companies in large cities or small start-ups in the suburbs? By taking a bit of time to look at the market as a whole, you will better understand your place in it.

Clients

Now let’s take a bit of time to carefully analyze your clients. First of all, take a look at your current clients and see how they compare to your ideal clients. Which ones can serve as a template for the type of client you truly desire? If you could clone one or two of your clients, which ones would you choose? Who is the most profitable, or easiest to work with, or the first to pay his invoices? What type of client stays with your firm year after year? This is about who your favorite clients are and what services they purchase from you. What industries are they in and why do they choose to work with you? Dig deep and you’ll uncover those ideal clients. Others like them will be the ones you want to target with your marketing efforts.

Now, describe your ideal clients. Go into as much detail as you can and rank their characteristics in order of importance to your firm. Sometimes it helps to think of them in terms of how you would describe your neighbors down the street. How old are they? What type of car do they drive and where do they send their kids to school? Do they pay close attention to the latest fashion trends or stick with sweatpants and sneakers? Are they homebodies or always out at the newest restaurants? Are you more likely to find them at the local pub on Friday night or at a fancy wine tasting? What types of business are they in and how much time do they spend working in the average week? You get the picture. Now create a description like this for your ideal clients.

Differentiators

What if I told you I don’t care how great your client service, staff, or firm is? Would you be surprised or offended? Well don’t be, even though it’s true. If you have managed to stay in business and grow in any way over the years, it’s fairly safe to assume you know what you are doing and are probably pretty good at it. I’m also going on the assumption you never intentionally hire mediocre people or deliver sloppy service. So when I hear a firm talk about how great they are it just looks like navel gazing to me: professionals patting themselves on the back and stroking their own egos.

As a client, I want to know what you can do for me and what you have done for others like me. What makes you different from the other firms I’m considering, and where do you excel? What do you do that others can’t or don’t do well, and how will that make my life easier? What do you do best or better than all of your competitors? Can you deliver it over the long term, and does this translate into a meaningful benefit for your potential clients? In other words, should they care? It might be something that you think is vital, but if those who are paying for your services simply don’t care about it, your differentiator is irrelevant.

I don’t mean to sound harsh here, but this is one of the most important—and admittedly most difficult—things a firm can identify. You can talk until you are blue in the face about your greatness, but as a potential client, I can’t wrap my arms around that. It’s soft and subjective. But different is something I understand, and so will all of your other potential clients. That is something that can be defined, described, and proven. And it will help you position your firm through your marketing efforts and become the core of your messaging. I can’t stress this enough. Every one of these areas is important, but if you have to cut corners, don’t do it here.

It’s now time for a deep breath because we are finished with the overall business analysis portion of your plan. Have you gained a bit more clarity about where your firm fits in the market, who you want to serve, and the services you should market more actively? It is not uncommon for firm partners to be surprised by the results of this activity and for unknown information to surface in the process of answering these questions. This is good! Embrace every new truth you discover because if you don’t have a clear picture of your firm then there is no way anyone else will. Next up is the portion that is often referred to as “marketing therapy”: the SWOT analysis.

See figure 2-1 for a quick reference guide on how to identify your firm’s differentiators.

Figure 2-1: Differentiator Flowchart

SWOT Analysis

You may be familiar with a SWOT analysis, and you may have taken part in one previously. You may have learned about it in a business class, or maybe you are wondering what this all means. A SWOT analysis is simply a way for you to identify your strengths, Weaknesses, Opportunities, and Threats (see figure 2-2 for an example). Why would you want to do this? So you can build on your strengths, overcome your weaknesses, take advantage of your opportunities, and address any threats. It puts you at a better competitive advantage and allows you to create better marketing strategies.

Figure 2-2: SWOT Analysis

Here’s the thing though: you have to be completely honest here. I don’t mean politely honest. I mean painfully, brutally, no-holds-barred honest. If you aren’t, there’s really no point in going through this exercise because it will not provide any benefit. Ready? Let’s dive in.

Strengths

This is where you get to toot your horn a bit and create a list of all the things you do well. What advantages do you have over other firms? What valuable assets or resources do you have? What do clients identify as your strengths? This can include things like services you provide, unique ways that you deliver those services, the people you have on your team, firm assets, and more. Be realistic, though, and always think about it from the client’s perspective. Give the most focus to the strengths your competitors don’t have or, even better, can’t get.

Weaknesses

This is the part of the process where the cat tends to get your tongue. People don’t like to think they have weaknesses, and those who run accounting firms are no different. You also need to decide up front that all participants must resist having their feelings hurt and agree that this is a time for open and honest dialogue. What could you do better? What have you been criticized for or received complaints about? Where are you the most vulnerable, and what causes that vulnerability? Don’t tiptoe around this part. Think about it in a way that is constructive and positive. Look at your firm the way an outsider might; you may even want to get input from a few trusted advisors or long-term clients. It might not be fun, but uncovering your weaknesses is one of the most productive things you can do. If you don’t know where you are weak, you can’t strengthen those areas.

Opportunities

Now we move on to external factors and get to list out the opportunities your firm has. Are there emerging trends on which you can capitalize? Are there areas where you can expand or change your service offering to better address client needs? Is there a way you can package two or more services together to upsell your current clients and appeal to prospects? Are there areas where you can provide services that you simply haven’t been able to address or expand to yet? Look for changes in the industries you serve, technological changes, government policies, and socio-economic and demographic changes. Often, key opportunities may come from unlikely and seemingly unrelated sources.

Threats

Now that you are in the glow of all the opportunities you listed out, moving on to threats can be a bit of a buzz kill. But it must be done. Are any of your weaknesses likely to make your firm critically vulnerable? What external roadblocks exist that block your progress? Are your competitors doing something different and compelling? Is there significant change coming in your industry or those you serve? Is technology dramatically changing in your industry (the answer here is “yes”) impacting how accounting services are delivered? Are economic conditions affecting your financial viability? Keep an open mind and expansive perspective. Back in the day, the buggy whip manufacturing association probably didn’t see automobiles as a threat, but they certainly were!

Whew! That was probably a difficult task, but the information should be enlightening. The goal of this exercise is first to paint a realistic picture of your firm and now look for ways to build on your strengths to minimize your weaknesses and take advantage of opportunities that you may not have realized you have, while at the same time overcoming the threats that you can address. See how we did that? Now you can create your own by using exhibit 2-2!

Exhibit 2-2: SWOT Analysis

OBJECTIVES

Look what amazing things you have uncovered and learned about your firm (and probably your partners too). You should now have an even clearer picture of who you are as a firm and where you need to go. So let’s talk about why we started this whole process in the first place. What are your objectives? Do you want to grow your revenue by a certain percentage? Do you want to see a particular service offering or industry niche grow more than others? Do you want to add 20 new clients in the next year? Do you want to increase awareness of your firm or a particularly remarkable partner? Would you like to expand the average revenue you receive from clients by increasing the services you provide to them? Would you like to get quoted in the press more or improve the placement of your firm in a Google search?

Again, honesty is important here. Some of your objectives should definitely be measurable, like an increase in revenue or number of new clients. Some might be softer and even ego-driven, like more awareness in a particular market or speaking engagements for a vivacious partner. Whatever they are, list them out and discuss them as a firm. You may want to identify the priority of each, marking some with a 1 for super important, 2 for those that are less urgent but still critical, and 3 for things you’d like to have once the more consequential objectives have been met. Be realistic and a bit aggressive here. You may not meet all of your objectives, but you still want to be clear about your goals. Try your best to come to a consensus on the top ones because this is how your efforts will be measured and is the foundation on which your tactics will be determined.

TACTICS

Now for the fun part. At this point, you should be able to state who you are and what you want to accomplish. So what tactics will you use to get there? The rest of this book will be spent discussing mostly online tactics (this is a digital marketing guide, after all). But also consider the more traditional marketing techniques. Not everyone likes to receive their information online, so it pays to deliver your message in a variety of ways. Don’t neglect things like print materials (brochures, stationery, and business cards), direct mail, traditional public relations, and even promotional items and tchotchkes to give away to clients and at events. A true marketing plan will encompass every way in which you promote your firm, not just the online methods, even though that is the focus of this book. Here’s a partial list of tactics you should consider:

• Client satisfaction and opportunity research

• Branded materials

• Public relations

• Media advertising

• Website

• Information resources

• Direct marketing, newsletters, and e-blasts

• Event marketing and seminars

• Industry conferences and meetings

• Promotional items

• Social media

Your firm may not need to have all of these things in its plan, so don’t get overwhelmed. Ultimately you need to consider what your clients are most likely to see and respond to. If you are targeting senior citizens, Twitter might not be the best place for you to spend your time and money. You get the picture.

NOW IT’S YOUR TURN

Creating a plan for your firm may not be an easy process, and it might require some honest dialog between partners who disagree. In most cases, it pays to carve out a day or so to go through this process (often off site) and have a third party facilitate it. Someone from outside of the firm can ask the hard questions and keep the conversation focused. The facilitator won’t be as worried about hurt feelings and can follow up on good points with targeted questions that really get to the bottom of the matter. But regardless of how you choose to make it happen, just make sure you do. The value that this process and the resulting strategic plan will bring to your firm can’t be overstated.