How To Impress Your Potential Clients Part 2
In Part 1 of our blog, we examined that how accountancy firms frame what they offer is an extremely important skill to cultivate and in part 2 we look at how few outcomes that an accountant can create for a client, match their ability to improve cashflow within a client’s organisation.
The ability to reach out to propose the idea of supporting a client in the areas of their unfamiliarity such as cash flow forecasting, tax planning and other forward-looking disciplines is statistically, one of the fundamental reasons that growth businesses choose to change their professional advisors.
There is a step before this can happen though. A step that so many accounting firms trip themselves up over.
This is the desire to ‘lowball’ in order to win work.
What is Lowballing?
The Wikipedia definition of ‘low-balling’ is:
The low-ball is a persuasion and selling technique in which an item or service is offered at a lower price than is actually intended to be charged, after which the price is raised to increase profits.
Lowballing typically happens on compliance work, not advisory work. It occurs when the overheads are low or outsourced in trying to win work.
There have been many arguments over the years to make a case for lowballing as a way of building critical mass in the practice. I have never been convinced by any of these arguments. However, lowballing as you may or may not know, is still a very common tactic.
How Does Lowballing Work in Practice?
In some cases, a firm will lowball their price in order to win work initially before trying to up their fees in Year 2 or Year 3.
Failing that, they may assign the work to a junior member of staff or outsource it overseas in order to keep the price down and the profit margin at least static.
If lowballing is something that you are guilty of in your firm, it is important to know that you are not on your own in this.
There is no silver bullet way of winning new clients but the question to ask is ‘How do we stand the best chance of winning new clients beyond being the cheapest?’
If we choose to offer a superior service rather than a cheaper one, how can we combat lowballing from those of our competitors who offer a very poor service for a very cheap price?
Here are the steps we can put in place to combat this problem.
How Can we Combat Lowballing?
1. Educate the client so they can make a truly informed decision because the proposal that you submit is one that makes a clear commercial case for why working with your firm is in their best interests.
2. We can demonstrate the outcomes that we have delivered to our clients previously. Those of a similar size of business and industry sector to the prospect that we are speaking to, are the most effective in convincing a prospective client to change to your firm.
If you compete purely on price, the firm’s profitability is only going to go one way.
Your margins will be eradicated over time, you will not enjoy what you do and run the risk of becoming resentful of the ‘PITA’ clients that you act for (PITA = Pain in the ….. yeah?)
Only when we understand that we are playing the long game in our firm to build relationships that will provide us with 6 to 7 figures of lifetime value, do we understand the importance of impressing our clients by demonstrating how we can impact their long-term prosperity and that all starts with improving their cashflow starting today.
One of the ways you can help your clients to improve their cashflow immediately is by helping them collect cash from their overdue debtors. Satago has the solution that makes this simple. Book your demo today…