Now, what do you do about it?
By Hitendra Patil
There is a shift in how people make their buying decisions and actually how they buy. Accordingly, there is a total transformation how people sell their products and services. And it's impacting the CPA business... in at least 10 ways:
1. Social Media: Ten years ago, “media” was some music that all of you enjoyed at “social” events like weddings, parties or maybe pubs. Now if your firm is not on Facebook, Twitter, LinkedIn and even Instagram, your firm might be facing the music.
2. Customer Ratings: Ten years ago, you got referrals due to word-of-mouth customer ratings. You probably lost a few clients because of the same thing. But now you can get or lose customers without any referral as they can see your independently authenticated customer ratings on several websites.
3. Cloud: Ten years ago, you were annoyed by clouds that blocked the view of the stars and full moon at a late evening open-air dinner with your loved ones. Now you can get annoyed by cloud (software) in the daytime, at your office and at your home.
4. Software Costs: Ten years ago, you paid once for software and maybe a little more for annual updates. Now you pay every month. Being an accountant, you suddenly see break-even time and total cost of ownership being quite a challenge, most likely because you may not have built these changes into your pricing.
5. Handheld Devices: Ten years ago, clients and staff came to your location. Now your firm has to go to the client and many times, even to your staff’s location! This has its challenges of coordination management.
6. Non-Local Competition: Ten years ago, you were worried about the firm next door or down the street. Now you are worried about your competitor from 400 or 4,000 miles away.
7. No One Else Can Do What You Can Do: Ten years ago, people came to you because you were the specialist who knew how to create books and prepare taxes. Now accounting software has become powerful, intelligent and easier to operate, enabling many people to do their own accounting fairly well. Ten years ago, 14.6 million taxpayers e-filed their returns from home; 46.5 million self-filed in 2014.
8. Fee Information: Ten years ago, not too many of your clients knew how much you charged others. Not too many prospects knew much about the “going rates” in the area unless they did a lot of footwork and visited multiple firms. Now national averages, local averages and pricing links are available in an instant with a Google search.
9. Managing Generation Y and Generation Z: Ten years ago, you dealt with generational changes. Now take a look at these detailed articles:
10. Value of Your Practice: Ten years ago, you could have sold your firm for 1.5 to 2.0 times your gross revenue. Now most thought leaders think and recent sales data indicates that if you get 1.0 time, you are lucky.
Worrying about the shift in market realities will not lead to a solution to these challenges; adapting your practice to higher-value capabilities that are insightful and interpretational will.
Listen to one CPA who has weathered 35 years of changes in the marketplace and two generations of clients. Alex Alvarez of Business Management Services LLC, CPAs, in Cincinnati says, “I am an entrepreneur whose business is accounting and taxes. I tell my business clients that their financial statements are nothing but the story of their business.”
Notice the distinct difference in his perspective of looking at his practice and his belief as to what is behind his durable success.
Or, listen to this management partner of a large regional firm tell his prospects: “I am not a great accountant, my partners are; but if you want to grow your business successfully, I am the man who you want to talk to.”
How do you meet market shift challenges like these?