What Shopping Habits Reveal about Accounting Clients?
Tax season is over and you made it through the home stretch, significantly tired but scraped through!
Now is the time to rethink your business model on the new learning from the tax season and restart looking for new clients. You don’t want to create more “C clients” that suck the energy, time and profits like a vortex.
Not sure how to estimate the value of your prospects? You may want to learn of their shopping habits!….
If you are struggling to figure out value of your new prospects, you should take them 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. 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 better 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!
Let’s say you ask another question, “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. 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.
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. They force you to look for efficiency and productivity gains through standardization, integration, automation and technology. They help you optimize your costs.
The PRODUCT BUYER: Their focus is on purchasing a state-of-the-art product or service. They are motivated by a clearly defined need. You would do well if you 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. They are, perhaps, not who are seeking value pricing but are the ones who would expect you to be as defined as they are.
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. The big challenge is to make sure you are on top of regulatory environment and how changes to rules affect them, and how to keep them informed.
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. 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.
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.
Your Firm and Which Buyer Type You Should Attract:
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.
Take that well deserved break from the tax season tiredness, step back and work out what you can do to assess how your prospects shop. You would then be able to build a more effective screening process to attract the right buyers for your firm’s strengths.
Please share your thoughts.