The 4 Types of Clients of Accounting Firms (& How to Attract Them)
Clients have an expectation for detailed work and seem unwilling to pay for the increased detail.
As an accounting and tax professional, have you ever had this feeling?
You are not alone.
To change the situation though you would want to transform your sales process. You don’t want to create more “C clients” that suck the energy, time and profit like a vortex.
Not sure how to know which prospects will turn out to be “A” clients and which ones “C”?
Take Them Shopping!
If you are struggling to figure out the value of your new prospects, take them shopping – to a trip to the mall, well, not real but just virtual. That’s right – take them through the experience of shopping!
Why? Because when we do shopping, we look for value. We research our choices, we compare features, and we weigh benefits versus costs and then finally choose the products that meet our need, want and criteria. You can gain great insights from the shopping habits of people.
But there is a difficulty.
Not many people shop exactly in the same way. So, you want to look at what impacts your prospects’ shopping decisions and then use that knowledge to improve your estimation of their value to your business.
Let’s take an example.
Let’s say you ask your prospect a question like:
“If you want to buy a new chair, what would you do?”
You would get answers like this: “I’d check what size will fit my home-office desk, the style and color I need. Then, I’d find out five stores that are offering the best deals on chairs and keep looking till I found the cheapest one that fits my criteria.”
Do you think such a prospect is a bargain hunter?
Wait! Don’t jump to conclusion, yet!
Ask another question, like:
“What if you thought one was better than the other, but the price was higher?”
You could get responses like these:
“Doesn’t matter. I want to save money because once I sit on the chair, it’s just like any other chair”. This person is clearly a “Commodity Buyer”.
“If it helps me sit long hours without causing back pain or stretch, I would pay a little more for it. Because I work from my home office.” This person has the need clearly defined and she is a “Product Buyer”.
“I would buy the costlier chair if the seller can help me design my home-office to look more professional and at the same time ensure that the chair is comfortable for a longer daily use.” This person is looking for seller’s understanding of how chairs are used in office environments. He is a “Solution Buyer” that focuses on seller’s core competencies.
“I would be happy to pay more for the chair is the seller is an expert in office furniture and is willing to provide me all the technical insights every time I buy office furniture”. This person wants long-term help as a buyer and is a “Consultancy Buyer”.
Such responses can say a lot about the prospect.
Several research studies indicate that there are four distinct buyer types. Howard Dion, Sales Process Consultant, defines buyer types as commodity, product, solution and consultancy buyers.
Accountants and The 4 Buyer Types:
As an accounting services provider and/or tax preparation services provider, you want to know which are the best types of buyers suited to your business.
1. The COMMODITY BUYER :
Their focus is, obviously, on price. Your first reaction is that you do not want such clients. But there is a positive these commodity buyers bring in.
How to Deal With Commodity Buyers?
They force you to look for efficiency and productivity gains through standardization, integration, automation and technology. They help you optimize your costs.
So, offer them your most standardized, optimized service.
Make sure to separately show the “value added” services and the pricing thereof.
2. The PRODUCT BUYER :
Their focus is on purchasing a state-of-the-art product or service. They are motivated by a clearly defined need. They are, perhaps, not who are seeking value pricing but are the ones who would expect you to be as defined as they are.
How to Deal With Product Buyers?
Provide them a customized package at reasonable rates, rather than offering per hour rates without precise estimates of how much time it will take to complete their work.
Fixed fee model would work with them rather than a variable fee model.
3. The SOLUTION BUYER :
Their focus is on the seller’s core competencies. They are motivated by a critical business issue such as a need to increase revenue and or profitability. Accountants and tax preparers would love these types of buyers.
How to Deal With Solution Buyers?
Make sure you are on top of the regulatory environment.
Tell them how changes to rules impact them and their business and life.
Tell them how you are better placed (compared to others) to help them navigate their business environment.
4. The CONSULTANCY BUYER :
Their focus is on the seller’s consulting experience and willingness to make a long-term commitment to helping the buyer. They are motivated by a strategic initiative.
How to Deal With Consultancy Buyers?
As an accountant, you would need to understand their business and industry challenges, be aware of their industry peers’ performance and how it benchmarks against their own etc.
Convince them that you are competent to understand trends and changes in their industry/profession and will not only keep them informed but you will consistently provide relevant insights that help their business.
Your Firm and Which Buyer Type You Should Attract :
As an accounting firm, if your services are mostly transaction-oriented e.g. month end financials, bill pay, payroll, tax returns preparation etc., you would NOT want the Solution and Consultancy buyers. You could focus on avoiding commodity buyers and instead look for the product buyers. You would need to have enough human resources to be able to process and deliver services profitably. As a firm, your next goal would be to gain expertise by serving them and move towards attracting the solution buyers.
If you are experienced, expert, well informed, niche specialist, with either small office having mostly experts OR you are a bigger firm with long-standing reputation, you would want to focus on both – the solution buyers and the consultancy buyers, avoiding commodity buyers and product buyers.
Step back and work out what you can do to assess how your prospects shop. Prepare the questions related to shopping that you will ask.
Same question will not work with everyone. Be ready with multiple questions.
Prepare your couple of different customized sales pitches for each type of buyer. For example, to the consultancy buyer, your pitch could include “over the last 3 years, the cost of key raw materials for the xyz industry has gone up by an average of 7.3% but the new deregulation rules coming up next year can create competition in the market and the rates can remain steady in the short term or come down in 12 months after that”.
Look for the right moments in a discussion to ask a shopping related question. It should feel natural with the flow. E.g. while in a discussion if the prospect says he wants to buy a new printer for his office or say an electronic equipment for her business, you can ask “what criteria do you generally use to decide what to buy when it comes to office equipment?”.
You would then be able to build a more effective screening process to attract the right buyers for your firm’s strengths.
Every month, I share one idea that can help grow your Accounting / Tax Practice. Click here to receive new ideas in your inbox.