Focus Article- Bruce Van Vreede and Hannah Kubik

Building and Measuring an Effective Client Expansion Plan

As the pressures of understaffing and increasingly complex engagements continue to mount in accounting and advisory firms, revenue growth through expansion of existing client relationships — also called cross-selling — is an imperative.

But it may require a change in mindset for some.

“It’s not cross-selling, but cross-serving,” said Art Kuesel, president at Kuesel Consulting. “The focus needs to be on making the clients' businesses better and helping them make better decisions. None of this says selling.”

Strategic account management requires ongoing conversations with clients about their needs and well-defined goals and objectives, according to 2022 AAM Summit panelists Mark Homan of Intapp, Charlise Hyatt of Armanino and Chris Lazzuri of Cherry Bekaert. Their top recommendations are:

• Change the mindset in your firm, if necessary, from partners owning (and feeling possessive of) client relationships to the firm owning client relationships.

• Identify and focus on key clients that align with the firm’s priorities and goals.

• Organize clients by industry, rank by revenue, and identify the number and types of services the firm provides.

• Evaluate current relationships with partners, staff and the firm, and ask staff who their favorite clients are to work with. Then rank them from strongest to weakest.

• Develop an account plan for each key client. The account plan is like a road map to help guide internal strategic conversations, identify real opportunities and manage follow-up.

Build the Roadmap

A client expansion roadmap sets the stage for practitioners to have effective, focused conversations with clients that yield valuable information. If done well, the team can uncover what the client is ultimately looking to accomplish instead of reacting only to what they may have asked for.

“When I talk to my team, I often mention the rule of one layer of adjacency,” said Jeffrey Thompson, a Cloud Solutions Architect at NetApp. ”That is, understanding the adjacency of who you’re talking to and their connections with the business, the people in it and the overall go-to-market strategy. The transition from product to solution to outcome equals solving to adjacency.”

Once you understand who your client answers to or influences in their business, you can map out services that might help them be more successful. The map will not only demonstrate to the client their needs were heard but may also result in uncovering needs the client didn’t initially realize. For instance, a client who owns a distribution warehouse may be looking for cash flow solutions and tax-saving strategies to help finance a building expansion. Steering the client to a cost segregation study can help move their project forward and contribute to your firm’s client expansion goals. Such a roadmap is key to facilitating marketing’s role in supporting cross-selling.

Marketing’s Role

A large-scale client expansion program or strategy is not always needed. Marketers need to be discerning and realistic about how and where to implement cross-selling opportunities.

“Don’t aspire to get 100% participation,” Kuesel said. “Aspire to get 30% and approach it with a limited lens. If you’ve got a third of the partners focused on one strong cross-selling service, it is a win. You may have some resistance but that’s normal. Work with the willing.”

Listen

Firms may want their clients to know everything they can do for them, but you will be more effective if you listen to what clients say, then help them find specific services and solutions to meet their needs. It may look good on paper to list everything you can do for a client, but you can’t expect a client to go on a hunting expedition to find just what they need. A successful cross-selling program requires trust, which is grounded in listening to what clients say. Marketing can help structure a reasonable response and work with partners who are willing to take the solutions back to the client.

Build Trust

A second, critical technique is to build trust that works both within your firm and externally with your client.

“It takes time to establish trust. External trust starts by understanding and listening to your client’s pain points and their business,” Thompson said. “Once it happens, you can map out solutions that fit their needs.”

From there, internal trust needs to kick in.

“Most partners are protective of their clients. That’s the traditional approach to selling accounting services,” said Bruce Ditman, managing partner of Chief Seconds, a professional services marketing consultancy. “But if you are not willing to talk to your client about their needs that might be served by other members of your firm, you can be sure that someone else is. Cross-selling is a defensive posture.”

Education

Marketing can help partners understand that approaching clients with services they need is a business strategy, not just marketing. To accomplish that, there should be more open internal discussions about clients so marketing, technical and advisory professionals within the firm can develop a holistic understanding of their needs. Awareness of the firm’s services needs to be shared across all teams, who should also develop client profiles, buyer personas and be honest about which clients fit a particular service team the best.

“Firms do not do a good job of educating internally what the firm does,” Ditman said. “Marketing can be that change agent to not only develop a process that creates an account-based strategy but also to keep the firm focused on that long-term approach. Marketing is a business ally.”

Client service teams also need to share information about services that clients have engaged in the past, and why they did so. Replication is more likely to happen if the team clearly understands how the process worked in the past.

Measuring Effectiveness

With an effective client expansion road map focused on clients’ needs, how do firms measure cross-selling success?

During their strategic account management presentation at the 2022 AAM Summit, Homan, Hyatt and Lazzuri said strategic account management requires well-defined goals and objectives. Their top recommendations are:

• Identify and track revenue from new clients and revenue from client expansion. If you are just beginning to track client expansion efforts, zero in on the best candidates for expansion opportunities and just track those to begin.

• Set goals for the number of strategic conversations to have with key clients each year and track them (e.g., 12 per year). A strategic conversation is not about a current engagement but the client’s overall business.

• Track and provide incentives for team selling. Break down goals by new revenue and client expansion. Partners should continue to be responsible for most new revenue and junior staff can be responsible for selling and meeting client expansion goals. Distinguish between initiating credit and closing credit.

• For new revenue from current clients to be counted toward client expansion goals, it must come from ideas the team brings to the client. If the client initiates additional work, consider it an unsolicited RFP, with no initiating credit given.

• Revisit revenue estimates at the end of the year and compare actuals to estimates (year over year).

• Do not count annual fee increases toward client expansion goals.

Crafting an effective client expansion strategy requires fostering a one-firm mentality, setting clear, achievable goals and using effective KPIs to identify the most promising clients. Marketers can help their client service teams create and follow a strategic roadmap, listen and respond to what they hear and achieve revenue growth in an increasingly competitive marketplace.

Bruce Van Vreede, Brady Ware. Contact at bvanvreede@bradyware.com.

Hannah Kubik, EisnerAmper. Contact at hannah.kubik@eisneramper.com.