Maintaining your firm’s competitive advantage is important in any crowded marketplace. As more and more clients seek DIY solutions when completing their taxes, differentiating your firm, and capitalizing on your strengths are crucial to keeping existing clients and generating new business. Evaluating your firm’s advisory stance is a strong first step to improving your business operations.
Impact of advisory services on customer retention
Many firms are coming to the realization that they need to be offering more than only audit and compliance-based services due to excessive competition and commoditization. DIY solutions, automation, and advancements in tax software have alleviated some of the work for accounting professionals, but clients require advisement more than ever.
Offering advisory services is an excellent way to engage your clients and offer them a more complete financial service experience. For example, if your firm is simply working on compliance, a reactive commoditized service, offering advisory services may keep clients engaged year-round and allow your firm to work proactively with clients.
The leader of a firm in Michigan had this to say about advisory services. “The impact of the advisory mind set on our firm is that we’re constantly being proactive with our clients. It creates a difference, versus typical compliance which is all after the fact and more reactive. We look at how to provide the solutions our clients are looking for, bringing solutions to the table versus waiting for them to come ask us. It involves us in various other areas of ensuring we’ve got better touchpoints and interactions with our clients.”
In fact, a recent survey from the Thomson Reuters Institute found that 95% of tax professionals say their clients want business advisory services, a client demand that was further accelerated by the COVID-19 pandemic.
Leverage your strengths
Any self-evaluation requires breaking down the strengths and weaknesses of the firm. It is also important to evaluate what areas of the business are promoting or stifling growth.
Identifying and then positioning your firm’s strengths and experiences as a gateway to advisory services is a strong method for expanding your business. Ask yourself:
- What are the issues that you have helped customers with in the past?
- What advice have you given clients repeatedly?
- In what way have you had positive impacts on clients’ businesses in the past?
Answers to these questions are an effective way to step into the advisory space.
How to grow your advisory services
Market your services
Simply offering more services is not going to instantly increase your revenue. It’s essential to also market these new services to new and existing clients. It is important to illustrate your advisory expertise through well-crafted content and messaging.
One of the many effective strategies for marketing your services is email. While there are many ways to utilize email, your campaigns should reflect what best suits the services you are aiming to provide. For example, a newsletter providing updates on compliance law could be a great place for many firms to start, proving they are experts in the field and on top of current events.
Once looked at as a tedious unprofitable service, thanks to recent developments in technology, payroll has become an excellent has steppingstone to advisory services. For firms looking to take their client relationships beyond compliance and improve their roles as strategic business partners, payroll is a great way to get a holistic view of your clients’ financial health.
Charging for your services
Pivoting to offer more advisory services comes with the need to know what to charge clients. The commoditization of compliance-based services goes hand in hand with one-time fees for tax services. Finding a new system that allows you to properly bill your clients for continuous work in the advisory space is increasingly important for growing revenue with advisory services.
Any firm that has not yet moved into advisory services should consider making the transition in the upcoming year. With a clear need from clients and much of the marketplace trending in a similar direction, now is the time to evaluate where your firm stands on advisory services.