02 Aug August 2017
But if we’re to survive, it’s not optional.
I recently pulled out my copy of Tribes, by Seth Godin, for another read. It’s a personal favorite, as well as a favorite of our staff here at Rootworks. I once again became enthralled by Godin’s passionate obsession with the concept of leading people through change. And I think obsession is a fair word to use. In 151 pages of his writing, the word change appears no fewer than 167 times.
Helping our firms be leaders in the process of change has been an obsession for us at Rootworks, as well. Look no further than the mantra carried on many of our member firms’ websites: Leading Our Clients Through the Next Generation of Change.
That slogan is a perfect reflection of what Godin’s book is all about. He says the world is practically begging us to be remarkable—to lead and present new ways of thinking and doing. Yet, so many firms are stuck in what he calls a “factory mentality” with owners who behave like managers or employees, rather than true leaders.
And it’s no surprise. The status quo is like an addictive drug for factory-mentality people in business, industry, government, and every other organization and enterprise in existence. It’s intoxicating and debilitating, convincing them that they can continue to reap the same rewards for doing things the same way, without disruption. And they continue in the status quo until the pain of doing so finally becomes untenable, and they enter a crisis—the crisis of being irrelevant in the modern world.
It’s in the depths of such crises that companies will either fail (think Blockbuster Video), be absorbed in fire-sale acquisitions (think Nokia), or reorganize and re-emerge as shadows of their former selves (think Kodak).
More often than not, it seems to take a crisis to dislodge people from the old ways of doing things, when they should’ve had the vision and leadership to act long before.
So why don’t they?
The answer takes me back to 2014, when I delivered a keynote address at the Thomson Reuters User Conference. I talked at length about how the forces of opposition deflect change and keep firms mired in the ways of the past, like water following the path of least resistance. The theme of my keynote then was “Choices.” And I think it’s still relevant when we consider it in the context of embracing change. But here’s the difference: The crisis I described then was about the quality of life for firm owners. Making a choice to change was optional—you could choose the status quo, and your firm could still survive, albeit with your life probably headed toward burnout.
But now we’re talking about a different kind of choice—a choice that isn’t optional, if you want your business to survive. Yes, it’s still a choice; you must choose to take an intentional course of action. Or, as Godin says, “Leadership is the choice to not do nothing.” Choose to do nothing—status quo—and you’re essentially choosing to go out of business. Slowly. Not with a bang, but with a whimper.
Think about it this way: In 1963, Louisiana State University business professor Leon C. Megginson paraphrased Darwin’s theory of evolution when he observed, “It is not the strongest that survives; the species that survives is the one that is able best to adapt and adjust to the changing environment.”
We can’t afford to be laggards, drunk on the status quo. We need to meet the future squarely, ready to lead the way, and ready to reap the rewards. Ready to thrive, not merely survive. The world is changing, whether we like it or not, and the world wants leadership.
The choice is yours. Choose to change.
The Power of the Subscription Business Model
We are in a subscription economy. From streaming media for entertainment, like Netflix or Hulu, to meal delivery like Blue Apron, to Dollar Shave Club, and of course QuickBooks Online, Office 365 and other software, recurring purchases are increasingly made in a subscription model. Accounting firms can turn their current services into products and sell them on a subscription basis, as well. There are benefits to both the firm (easier to market and sell, recurring revenue, standardized processes) and clients (better client experience, consistent fees).
The first step is to define your products. Use our new “Turning Your Services into Products” spreadsheet, available here, to help you think through your potential offerings. The instructions are in the document, but the way we think about turning products into services is as follows:
- Make a list of all services that you offer and/or want to offer. Note whether they are done on a recurring basis—like a payroll or income tax return—or if they are more of a one-time or one-off (ancillary), like a business valuation.
- Think of your ideal situation where you are doing everything you want to do for a client. This is your most comprehensive package. Put these recurring services into your “Ideal Product.”
- If there are services you are willing to let the client do (or someone else for that matter), peel them out of your Ideal Product. This becomes your second product.
- And, if there are then even more services you will peel out of your second product, this becomes your third product.
- Ancillary services remain to be charged on a per-project basis, outside of the subscription.
Think of your business in the framework of a subscription model, and consider the implications on customer experience, long-term relationships, and reliable, recurring revenue.
- Academy and Advantage members: If you missed it, you can watch our “Turning Your Services Into Products” recorded training available in the Staff Training Video Library.
- Want to read more? Check out The Automatic Customer: Creating a Subscription Business in Any Industry, by John Warrillow.
The Importance of Your List in Email Marketing
In the last couple of issues, we’ve covered the basics of email marketing and the techniques of writing effective messages. Now, we’re going to rewind and look at the most important part of your email marketing efforts: your mailing list. It’s been said that the success of your email campaigns (and this holds true for snail mail marketing, as well) is 80 percent dependent on the quality of your list.
Think about it this way: A mediocre message has a chance of working, if it reaches the right people; but even the most astounding, compelling message will fall flat, if it’s delivered to people who find it irrelevant. Your list matters!
So how do you assure your list has what it takes? First of all, a marketer never works with just one list—you’ll want to segment your audience in logical ways. For example, you’ll maintain a list of your existing customers, so you can communicate messages that are relevant to them. And you’ll want to segment that list even further into various categories, such as clients in niche businesses, or clients who meet criteria for upselling or those who should receive certain periodic reminders or other notifications.
And then, there’s your prospective customers—people you don’t yet know. You’ll want to segment this list as well, according to qualification criteria (i.e. How closely do they meet your definition of ideal clients?) and the level of interest each has displayed (i.e. Have they responded to any previous communication?).
But…how do you get a list of those unknown people to begin with?
That’s the challenging part—compiling a list with contact info for people you’ve never met. There are several ways to do it; each method has its advantages, disadvantages and pitfalls. Here’s a quick look at each basic technique:
- Build it yourself. We’ll start with the hard way. Building your own list takes a lot of legwork. You need to create mechanisms for people to opt into your list (i.e. a sign-up sheet, a fishbowl to collect business cards, or even an online opt-in form provided by your ESP—your email service provider, such as MailChimp or Constant Contact). The object of the game here is turning acquaintances into subscribers so you can stay in communication with them and possibly nurture them into a client relationship. Pro: Good quality of list info. Con: Takes a lot of time and effort to build a good-sized list.
- Share it. Reach out to your network (i.e. other professional service firms, financial institutions, chamber of commerce, etc.), and see if anyone is amenable to sharing mailing lists. It’s not always easy, as many organizations have restrictive privacy policies for their subscribers, but it’s worth a shot. Pro: Easier to get a sizeable list established. Con: No direct opt-in; no way to control list quality. Could result in high numbers of undeliverable messages (“bounces”) and/or spam complaints.
- Buy it. There are many list brokers who specialize in assembling both email and snail mail lists for direct marketers. InfoUSA.com and ListFinder.com are two examples. Be aware, however, that most ESPs’ terms of service explicitly prohibit using purchased lists whose recipients have not specifically opted-in to your mailings. If you get a list with quality problems, it might result in a large number of bounced messages and/or spam complaints, which could lead to suspension of your account. Pro: Ability to tightly focus your target and build a large list. Con: Requires out-of-pocket expense; list quality problems can result in spam complaints.
A Numbers Game
Email marketing is a business of rejection. Response rates for your campaigns will likely be in the neighborhood of one percent or less. (Don’t be discouraged; this is typical.) Therefore, having a list with plenty of records is important in order to deliver the results you want.
Do the math: If your goal is to add 10 new clients, and you’re confident that you can successfully convert 100 percent of the people who respond to your emails with face-to-face meetings, then you’d need to start with an email list of no less than 1,000 prospects to find those 10 new clients.
As you’re busy working with that list, keep in mind that you will eventually exhaust it. You need to be planning on how to replenish it, if you want to keep the marketing machinery moving. And remember, your list is of utmost importance when it comes to direct marketing—be it email or snail mail.
Next issue: “Understanding Your Client Journey”
Summer is in the home stretch—here’s what’s coming your way:
All Members—Select Upcoming Webinars:
August 17—Summer Technology Webinar. This quarter’s webinar will focus on MS Office 365 and G Suite. We’ll discuss our transition away from MS Exchange. Specifically, we’ll cover:
- Feature comparison of MS Office 365 vs. G Suite
- Why we ultimately chose G Suite
- Pros and cons of each
- Challenges to overcome if you are considering making the move
August 25—Special Member Webinar. Members of the Barene DenAdel firm will share their experience hosting Client Technology Seminars. Erin DenAdel and Alysia LaTourette from Barene DenAdel will share the insights they gained while helping their clients this summer.
September 7—Summer Resource Update Webinar. See what new materials we’ve created and how you can use them.
You’ll find more details and registration for each of these events at https://grow.rootworks.com/events.