Four case studies in marketing: CPAs share solutions to common practice development problems.

When it comes to marketing accounting firm services, it is easy to spend money--and even easier to waste it. To ensure that a firm's marketing efforts are successful and its practice development dollars well spent, CPAs must be both sophisticated marketers to their clients and skilled managers of their employees' marketing efforts.

Why do some campaigns yield extraordinary results, from generating significant new revenues to delivering a host of intangible benefits? This article answers this question by examining four programs launched to solve common practice development problems and describing solutions that practitioners can adapt for their own needs.

SOLIDIFY RELATIONSHIPS AND EXPAND MARKET SHARE

At the end of 1987, Marvin & Company, a two-office firm in Albany, New York, with 6 partners and 61 total staff, made an unpleasant discovery. A veteran provider of audit and accounting services to long-term health care facilities, nursing homes and organizations providing services to the developmentally disabled, the firm discovered that other CPA firms were bidding on work that once came to Marvin & Co. almost exclusively.

After evaluating the situation, the firm decided the best defense was a good offense: It formed a marketing team, made up of most of the members of the firm's health care practice and led by the senior partner, that developed a marketing program designed to cement existing client relationships, secure greater market share and establish Marvin & Company as a leading provider in its market.

To achieve these objectives, the firm rolled out a bimonthly newsletter, Health Care News & Views, devoted exclusively to long-term health care management and sent to both clients and prospective clients. It also launched an annual, two-day conference for the industry. Together, the newsletter and the conference helped to increase awareness of the firm's capabilities among prospective clients and to establish it as a leading provider.

The firm also wanted to ensure existing clients were highly satisfied, so firm members organized a series of informal roundtable discussions to discover what executive directors of client companies thought of the firm's scope and quality of service.

The results? According to Warren Garling, the firm's marketing director at the time, accounting and audit billings to this market segment expanded to over 40%, up from 20%, against an overall firm expansion of 71%.

The cost? Out-of-pocket expenses for the newsletter averaged $3,000 a year and the annual conference paid for itself. Roundtable costs were mainly time spent organizing them in-house.

Why did a small investment in newsletters, conferences and focus groups reap such large dividends? According to Frank Venezia, a firm director, the drive to understand its target audience and a willingness to invest in the long term were the key ingredients.

The newsletter, for example, is written by members of the health care practice and produced in-house. Venezia said this enabled Marvin & Company to speak directly to the topics and issues that matter most to its target audience. He advised others to "investigate your clients' needs and interests and write about them. It also is important to write articles that are cutting-edge. If something big hits a week after you've published, be ready to write it up and mail it as an industry alert." Firm members keep up to date through publications and by monitoring trends in clients' businesses.

As for Marvin & Company's two-day conference, the opportunities it offers to create new business are not left to chance. Each year, the participant list is reviewed carefully and an effort is made to schedule a breakfast, lunch or dinner meeting with each prospect. After the conference is over, prospects are assigned to the partner or manager who had the most contact and rapport. Action items are defined and firm members report progress to the firm marketing director.

To produce an effective conference, Garling surveyed the key decision makers in his target audience to identify the issues that most concerned them. This yielded the twin benefits of ensuring the conference would be topical and that senior managers--not lower level personnel--would attend.

The presenters were firm partners and industry experts, including state officials who influenced regulations. "Always give participants the opportunity to meet with people--and get the kind of information--to which they would otherwise not have access," says Venezia.

PENETRATE A NEW NICHE

Herbert Kaplan, a marketing consultant and the president of Ridgefield Consulting Group, worked with another firm that achieved spectacular success in a selected market niche. While Marvin & Company's goal had been to consolidate gains in a market segment in which it already had a considerable presence, here the goal was to penetrate a niche that, at first, accounted for only 1% or 2% of firm billings.

The firm, a New York-based practice with one office, 11 partners and 75 total staff, chose to pursue not-for-profit, voluntary health and welfare organizations, a market segment in which it had a small but thriving practice.

To reach the goal of generating 10% of firm revenues from this practice area, the firm recognized it had to improve visibility, build credibility, increase the number of face-to-face contacts with key decision makers and win more proposals.

To accomplish these objectives, the firm began publishing a bimonthly newsletter for not-for-profits. It also began sponsoring three industry-specific seminars a year and created a package containing partner and firm credentials and illustrative engagements.

What did these efforts cost? The newsletter cost about $15,000 per year, the seminars $5,000 a year and expenses for the capabilities statement--which was generated in-house--were negligible.

The result? In a little over two years, the firm's billings in this area have gone from under $100,000 to in excess of $500,000. Thanks in large part to its enhanced credibility and visibility, the firm also has received many more bidding opportunities.

As was the case with Marvin & Company, the marketing tools used to achieve this growth were not extraordinary. Why, then, was this effort so fruitful?

1. The firm successfully identified the one small part of the not-for-profit market (voluntary health and welfare organizations) that made the most sense for it to pursue. Market research conducted early in the planning process revealed the firm had a good grasp of this segment's service needs, there was a large and ready market in the New York metropolitan area and the competition was limited. "A lot of people talk about not-for-profits as though they were all part of one market," said Kaplan. "They're not."

2. The project was managed by a small but dedicated team whose leader had committed himself exclusively to pursuing business in the health care arena. "It all comes down to leadership," Kaplan explained. "You must have a partner in charge (of the marketing effort) who is entrepreneurial and who has real expertise in the chosen area."

3. This marketing program had the full faith and support of the firm's managing partner. All of the consultants interviewed for this article said this was possibly the single most important factor in the success of a marketing initiative.

MOTIVATE CPAs TO SELL

For another Albany-based firm, Bollam, Sheedy, Torani & Co. (one office, 9 partners, 52 total staff), the challenge wasn't to create more opportunities to sell but, rather, to convert them into new business.

According to managing partner Joseph A. Torani, the firm didn't have to look far to identify its problem. "In an average firm of 50 or 60 people, 3 or 4 will be really good at developing leads," says Torani. "We were no exception."

Recognizing that the ability to sell doesn't always translate into the ability to teach and inspire others, Bollam, Sheedy retained Tammy Linn of Phoenix-based Tammy Linn & Co. to provide needed sales training.

Linn's first task was to interview members of the management group and help them discover where their marketing strengths and interests lay. "For years I kept hearing, |We can't do it; we're not as good as you....We don't have the network,'" said Torani. But this process "made people see they had the ability and they already had a network, even if it was their church congregation or the volunteer group they worked with."

Linn's second task was to develop personal marketing plans that were geared to each firm member's strength. "Until then," explained Torani, "we had been trying to get everyone to do the same kinds of marketing--writing articles, making speeches. But with the development of personal marketing plans, each person had his or her own path to take."

The result? "This program got people who weren't good at marketing to get better and it helped people who hated marketing to realize that it is an essential part of being in this business," said Torani. As an example, he cited a highly talented tax specialist who had resisted the pressure to market for years. "Just last year," he reported, "she brought in her first client--worth $15,000 a year. Having her tell me that she really likes marketing now--that alone is worth the cost of retaining a consultant."

Linn thought personal marketing plans, combined with just the right amount of pressure in the form of monthly marketing reports by firm members on their activities, were seminal to the success of this initiative. Torani concurred. "Without those individual marketing plans, we would have been right where we've been for the last 20 years."

Personal action plans should contain statements about the amount of time to be devoted each week and how it will be used. For instance, a senior staff member's plan might say, "I'm going to spend three hours on business development each week. I'm going to use that time to call, visit or correspond with two clients and one referral source (each week). By the end of the year, I hope this activity will produce highly satisfied clients, $x,xxx of new work for existing clients and two new clients, each valued at $y,yyy in annual fees."

The cost in terms of staff time varies depending on each person's marketing commitment. Launching such a program would probably require one to two days of a consultant's time for initial training plus monthly individual coaching time for individuals.

TARGETING A MARKET

While a senior member of Coopers & Lybrand's national marketing department in New York, Bruce Marcus was asked to promote an audit division service called preemptive auditing. This program helped companies involved in large-scale construction projects to monitor planning and construction phases closely and anticipate delays, changes and related costs. Marcus said his mission was to sell the service and at the same time establish long-term relationships with companies that weren't using Coopers & Lybrand as their auditor.

His first act was to find companies with ongoing or pending construction projects and to identify, by name, the executives who managed them. He decided direct mail, coupled with a publicity campaign that consisted of interviews, profiles and bylined articles in trade journals, as well as seminars and public speaking, were the best way to reach these decision makers.

The results were tremendous. Within three months, 50% of the letters he sent had created opportunities for a Coopers & Lybrand partner to make a personal presentation to a prospective client.

Why did this effort yield such positive results? According to Marcus, the intense initial research effort was crucial. "Our research enabled us to identify, by title and by name, the three executives who would be involved in the decision to purchase our product and to name the construction projects they would be worrying about when they got our letters," said Marcus. To find these people, Marcus used the Dodge Report, a periodic report published by McGraw-Hill that lists all construction projects pending or in process in the United States and names key players, such as the-developers, funders and owners.

All of this research, he concluded, had a strong influence on how the direct mail letters were written. For instance, the salutations were personalized and, to improve the chances the letters would be read, they were sent on high-quality stationery. Each letter was hand-signed by a senior Coopers & Lybrand partner and contained an explicit reference to a current construction project. "It was vital to demonstrate an understanding of the prospect's problems and to do so when the prospect was feeling the pinch most strongly," Marcus said.

He advised CPA firms to combine direct mail with a very strong follow-up, usually through telemarketing. "Never send out more letters than you can follow up on personally in one week," said Marcus.

LESSONS LEARNED

Although the situations and solutions described here may not suit all firms, they are based on basic steps--such as good research and consistent follow-through--that are valid for any practitioner. The marketing directors and managing partners involved offered these guidelines for success that will apply in nearly every instance:

* Think of marketing expenditures as an investment, not an expense. To make real headway in a targeted market segment, it may be necessary to wait, sometimes for two or three years, before seeing any impact on the bottom line.

* Maintain relentless commitment to the process. When it takes two or three years to get results, it is easy to see why so many marketing programs lose momentum. To prevent this from happening, firms should break down long-term goals into short-term objectives with predetermined start and completion dates. They should celebrate the completion of those project segments even if they haven't begun yielding financial dividends.

* Never leave business development opportunities to chance. Conferences, direct mail, newsletters--these programs only stimulate interest in a firm and its services. CPAs must always couple them with active efforts to convert interested and informed prospects into clients.

* Invest marketing dollars in personnel. If partners, managers and staff are to convert new leads into prospects, firm leaders must begin by defining expectations about marketing and selling efforts. Then, firm members must receive the training and personal counseling that enable them to fulfill those expectations. Finally, accountability through reports and meetings must be combined with just the right amount of pressure to get people moving.

* Remember that the quality of the effort counts. Market research can help identify the firm's very best prospects and the key decision makers, their industry jargon, their perspectives and needs.

* Be willing to take risks and to learn from mistakes. CPAs must make risk-taking and failure an integral and acceptable part of the learning process.

* Create a caring and committed leadership. Don't even try to launch a program if firm leaders don't have an innate hunger for success. The firm's managing partner cannot merely acquiesce to the decision to launch a marketing effort--he or she must be the impetus. The partner in charge of a specific marketing effort also must have a personal stake in the venture.

By following these guidelines, firms of all sizes should be able to achieve better results from their marketing investments.

TOP TIPS ON: Producing an industry newsletter

1. Prepare articles that have real value executives and senior managers. Monitor the industry closely by reading trade publications, attending industry conferences and talking to clients.

2. After the newsletter has been published several times, ask for feedback from the target audience.

3. Have articles bylined by firm members to showcase their expertise.

4. Find ways to highlight the firm's service capabilities within the articles.

EXECUTIVE SUMMARY

* TO ENSURE THAT a firm's marketing efforts are successful and its practice development dollars well spent, CPAs must be both sophisticated' marketers and skilled managers of firm marketing efforts.

* THE KEY INGREDIENTS for achieving success usually can be applied to different kinds of firms and programs. They include viewing marketing expenditures as an investment and expecting a two- to three-year delay before initiatives yield significant financial results.

* FIRMS MUST COMBINE marketing programs with specific strategies for converting new leads into clients. * MOST IMPORTANT, the program must have the managing partner's full and enthusiastic support if it is to be successful.

TOP TIPS ON: Forming a marketing team

1. Make the practice group head the team leader. If there is no practice group head, the effort should be directed by the firm managing partner.

2. Provide team members with training in specific business development tasks, such as public speaking, business writing and consultative selling skills.

3. Schedule regular marketing meetings and don't let client work be an excuse for putting them off.

4. Offer incentives (both tangible and intangible) for active participation.

5. Make all team members part of the decision-making process. Solicit and act on their suggestions.

TOP TIPS ON: Running an annual conference

1. Survey the target audience to identify seminar topics.

2. Bring in industry experts who offer participants something of value.

3. Use in-house specialists as well--they'll highlight the firm's expertise.

4. Screen all speakers carefully. Make sure they are effective presenters.

5. Organize a business development strategy that identifies important clients or prospects among participants. Make sure, a firm member follows up with them after the conference.

TOP TIPS ON: Organizing a client roundtable discussion

1. Invite trusted clients and tell them the truth: You want to solicit their input on ho to serve them better.

2. Choose a time of day that is most convenient for guests.

3. Keep the number of firm members present to about half the number of guests.

4. Don't do a presentation of the firm's capabilities. Instead, ask good questions and sit back and listen.

5. Summarize what you learned and communicate your findings (and how you plan to act on them) to participants in a thank-you letter.

TOP TIPS ON: Waging a direct mail campaign

1. To capture readers' attention, identify and speak to an issue that is very important to them--not you.

2. Conduct advance research to identify key decision makers and verify their names, titles and roles in the decisionmaking process.

3. Plan to send at least three separate pieces of correspondence.

4. Have a follow-up strategy in place and respond to all inquiries quickly and professionally.

5. Be realistic about the anticipated response rate. Many direct mail campaigns are considered successful when 3% of those targeted respond.

COLETTE P. NASSUTTI, president of Colette Nassutti Associates, San Jose, California, is the editor of The Marketing Advantage: How to Get and Keep the Clients You Want, published by the American Institute of CPAs management of an accounting practice committee. Most of the programs described in this article were conceived and executed by individuals who also were contributing authors to The Marketing Advantage.