As a professional advisor you have two main assets – your knowledge and skills and your relationships with your clients.
The difficulty is unless you continually work on developing these assets, the health of your practice will slowly decline.
Let me explain…
Let’s suppose you develop a new service, which is new to your target market. You gain a reputation for this service and charge a premium price for your service. However, as sure as night follows day, over time your competitors will catch up and also become experts in this service. As time goes on, all your competitors will offer this service as standard, and the market place becomes crowded and the fee level you can command for this service drops.
To illustrate this point, let’s look at training consultancies. Ten years ago, most training consultancies didn’t offer coaching as a service to their clients. Now if you look at any training consultancy’s (or even freelance trainer) website – they will all offer coaching. Being a training consultancy that can offer coaching to clients is no longer a point of difference.
I can see that some of you may be sceptical, after all the accountants amongst you, will suggest that every client will need to do VAT and tax return – and so there will always be a market for clients needing annual accounts and tax returns produced. Or will there? What happens if HM&RC produced its own version of Kashflow, (and offered it free to small businesses) that automatically computed and submitted VAT and tax returns? How many accountants would go out of business? Is this a bit far-fetched? May be, but HM&RC already offer free payroll software to allow small businesses to complete their own payroll… Who would have thought that Tesco would have ever been able to offer financial and legal services to it’s customers at the till?
Much research has been undertaken which has identified that it is 7-14 times easier to develop new business from existing rather than new clients. But, what happens if you offer a service that clients normally only need once or very infrequently, e.g. a will writing service or pre-nuptial agreements. So how do you efficiently find more business? Once you have provided this service for your client, unless you had additional services and products of interest to this client, you wouldn’t be able to gain any more fees from this client.
So, if you need to continually develop new services and products to maintain the health of your practice, how do you find a client willing to buy your new service, without the all important testimonials? Very simply, if you have a good relationship with an existing client, they are normally happy to trial a new product or service from you.
Now, nothing I have written here, is probably a surprise to you. But, if you take a long hard look at you and your practice, how much time do you routinely allow yourself, and people within your firm, to deepen client relationships or develop new products and services?
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