In this week's episode of The Wize Guys Podcast, discover the secret to nurturing long-lasting client relationships. Join Jamie, Kristy, and Ed, as we unearth the treasures of self-leadership and the art of building client relations. We shed light on the power of referrals, emphasizing that it's surprisingly 20 times harder to lure in new clients than to retain the existing ones. We dive deep into the realm of emotional bank accounts, explaining why positive interactions are vital for your client relations. Ed offers invaluable insights on being the first choice when your clients are on the brink of changing accountants. We also discuss the nuances of sales and marketing and how they can impact your client relationships.
Ever wondered about the long-term value of your clients? We take you on a journey that explores the strategic considerations when investing in client relationships. The discussion emphasizes that the lifetime worth of a client goes beyond a single transaction, and how today's investment in efficient systems can be a game-changer for future success. We contemplate the balance sheet implications and the goodwill factor when deciding to invest in marketing or not. So, gear up and join us to find out how to elevate your client relationships and position yourself for long-term success.
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Ed Chan:
You've got to master leading yourself. So that's about self-discipline, that's about experience, that's about controlling your feelings. So you've got to lead yourself.
Wize Mentoring:
From Wize Mentoring is The Wize Guys Podcast, a show about accounting and bookkeeping practice owners and the many stories, lessons, and tips from their experience of transitioning from a time-pull practice to a business that runs without them. I hope you enjoy and subscribe.
Kristy Fairbairn:
As Jamie says, it's 20 times harder to find a new client than to keep existing clients. That is definitely true, Jamie. With your quote there, can you take us through a little bit of what that means to you and also your laps steps?
Jamie Johns:
Going back to your quote, Kristy, it's much easier to keep a client because you've already got the rapport and the trust built. Bookkeeping and accounting firm owners are all about relationships. That's really number one. Ed, you always talk about the emotional bank account and Dr. Stephen Covey talks a lot about that in his book as well. So if you're always depositing into the emotional bank account, often when you do make a mistake, you'll be able to keep the client. So that emotional bank account concept is very important and actually, there's a good video on that, Kristy, and the Wize Vault. Rachel Robinson talks about that as well at XeroCon one year. It's always the contact point with the client. So every time you think about the power of now, every time you contact a client, are you contributing to the client bookkeeper slash, account relationship? So in that sense, it really is easier to keep an existing client than to find a new one, because when you find a new one, they don't know you, they don't trust you, and that's really where that quote comes from. Yeah, that's right. So, yeah, it's 20 times harder to find a new client than to keep an existing one. So that's what that quote is all about and it definitely relates to sales around, how hard it is to find a new client. Again, there's a video on the WIAS Vault that shows you the acquisition cost of new clients. So referrals are great, but when you're spending money on marketing and then the number of times you're in the sales process, it can be quite difficult and quite costly and time- consuming to find a new client.
Jamie Johns:
T hink of the sales process in, I think someone said to me once or I must have read it laps of the pool. It's just going over and over and over. So I've seen some people have their CRM set up like this so you've got a lead and so you go from a new lead to an appointment. So you should book an appointment with a lead. Once you've booked the appointment you can do your presentation around your services and then from your presentation, you then send them a proposal and so from the presentation it goes to the proposal or to the sale. So that's why I like the concept of laps and doing it over and over and over.
Jamie Johns:
And years ago I remember Ed saying to me Jamie, can you document your sales process? I think I sort of tracked it for two or three years there and I probably converted about 80% of the new leads and prospects and referrals that I got. Ed said to me can you document what you do from the first point of contact when you take a lead or a referral? What do you actually do? I documented all that.
Kristy Fairbairn:
That's awesome, thank you, and are there any particular points in there that stand out for you on focus or systemization? Or when you get your playbook in place, it starts to flow into each other.
Jamie Johns:
I think it's like everything else in business, Kristy. You must follow a process every time, whatever it's been in running my firm, every time that I moved away from a process that worked, the less successful I worked. So that's what I love about why it's really a blueprint, and if you follow the process, you'll get the best results. And then, every time I didn't follow the process or every time I missed a step, it always reduced my ability to get the outcome I wanted. So I think the whole wise philosophy whether it's marketing or whether it's sales, or whether it's building your audio team is just to follow the process because the process works.
Kristy Fairbairn:
Yeah, that's awesome. Thanks, Jamie.
Jamie Johns:
When you scale it to Kristy, you've got to have others to follow a process.
Kristy Fairbairn:
Yes, I did love sharing a lead with you the other day, Jamie. You straight to your client manager to get it sorted. I can't wait to be able to have a system in place that a lead will come in and it's not me that needs to handle it. So, yeah, I look forward to learning a bit more on that one soon. And, ed, love to hear from you on this quote that you say you cannot make a client change accountant, but you can be top of mind when they eventually decide to change. How important is being at the top of their mind and the speed at which you get back to those clients?
Ed Chan:
Yeah, thanks, Kristy. It's so important that you're at the top of mind when they do decide to change, because it's not when you're ready to do business with them, it's when they're ready to do business with you that you've got to be at top of mind. And how do you get to be top of mind when they do decide to change? Well, to understand that, I'll just take a couple of steps back just to get to the understanding of this different difference between sales and marketing. Sales is what Jamie just talked about selling to an existing market. So you've got a demand for something, a demand for bikes, and you just sell to a bike, to someone who wants to buy a bike, right, so that's sales. And then you go through the process, the laps, as Jamie pointed out, to get that person over the line.
Ed Chan:
Marketing is a little bit different. Marketing is either creating a demand that's not there or doing things that you're going to lead a prospect in front of it, and then you still have to convert that through a sales process, which is the lapse process, but you're still. Marketing is more about getting the lead in front of you so that you can get the opportunity to convert that lead or that prospect into a client. Now the saying is, the more marketing you do, the fewer quality sales person that you need. The less marketing you do, the more quality sales person you need to get in front of the prospect to convert. If you do no marketing, then when that prospect gets in front of you have to put your best salesman in front of that person, because that person doesn't know anything about your firm, and you're starting from scratch. So obviously the more impressive person you can put in front of that person, the higher the chance of converting it. But if you've done enough marketing right so that the prospect finally comes to see you, then you don't need as high a sales person to do the conversion.
Ed Chan:
And the reason for that is that there is a process that you go through when it comes to sales and marketing, and the first thing is you've got to build familiarity. What I mean by that is that if you're looking for a telephone company, Telstra presented itself to you those who are not in Australia. Telstra is another phone company that we have here that's been around a long, long time, so they're very familiar with Australians. Or a new person you know, I'll just call him a new telephone company. They try to sell you something. You're a lot more familiar with Telstra than you are with this new telephone company. So the old person that you're very familiar with will have a bigger chance of winning you over because there's a lot more credibility.
Ed Chan:
So the first thing is to build familiarity and the second thing is to build credibility because where you're trying to get to is to trust. A person won't come across your organization unless they trust you. And in order to build trust it's a long runway. So you build familiarity with your brand or with yourself and then you build credibility. Credibility is either what we do, is you know, do these kind of sessions, writing newsletters, writing pieces in the newspaper, holding seminars. That builds credibility and then from there you arrive at trust and then, when they're ready to change accountants, you'll be at the top of mind. And it is a long runway. So it requires investment and most small firms don't see the investment. They see it as a cost, as an expense, and not as an investment. So a lot of firms don't do it.
Ed Chan:
If you've been coming to these sessions, you know that I talk about building a garden that attracts butterflies and not being a butterfly catcher, and building a garden that attracts butterflies is this process, this marketing, sales process that you've got to invest up to 5% of your turnover into, to create a database of prospects and often the other mistakes accountants make or businesses make.
Ed Chan:
The other mistake is that when they see a prospect and they don't buy from you straight away, then get rid of that name and it's gone, instead of realizing then that when they're ready to buy, you need to be at the top of your mind. So you need to keep them in a database and continue to engage with them, either through a newsletter or through some value that you can give them to keep them warm, so that when they're ready to buy from you or when they're ready to change accountants, that you're at top of mind. So this is what I call balance sheet stuff, not P&L stuff is investing into the balance sheet. And, as I said, the more marketing you do, the more you don't need a partner to go and see a prospect convert them. But if you don't do any marketing, you need to get the partner in front of the best person in front of the prospect to convert them. It is a long runway and you need to invest. And if you're thinking of it as an expense and not an investment, then you won't do it.
Kristy Fairbairn:
Yeah, I think too in our industry we're really lucky that the lifetime value of a client is more than one-off a service generally. So, in knowing that it's a balance sheet play, it's a long runway. It's worth that investment in time because for some of us, we could have these clients for 15- 20 years at least. It's really worth betting down the systems now.
Ed Chan:
Yes, it will set. And also there's a good will factor attached to it. So not only do you get the lifetime value of that client, which is a minimum of five years, if you look after the client, if you add up, the fee you get from that client for five years gives you context to how much that client's worth, but then on top of that there's good will, and currently it's a dollar per dollar or your turnover is a goodwill factor. So you'll get to see your market. You have to approach it from that perspective to help you decide whether to invest in the marketing or not.
Ed Chan on “You cannot make a client change Accountant, but you can be top of mind when they eventually decide to change.” -- How important is being at the “top of their minds” and the speed in which you get back to the client?