- Services can be packaged as products to increase advisory revenue.
- Change the client’s perspective of what your practice can do for them and gain greater long-term revenue
- Selling services as differentiated products encourages earlier engagement, allows for fixed fees and involves the team
By William Pegg
What are recognisable products for you? iPhones? A Mercedes? Jimmy Choo shoes? Perhaps the Star Wars franchise? But your accounting practice and the results you are known for can also be packaged as a branded solution that the market will recognise and value.
When you lift the hood on your business, you may see a proportion of earnings originating from a certain client type or industry. Identifying this group of clients is vital for productising a service. You need a common audience whom you can help, because you cannot be all things for all people.
Let’s imagine 30% of your earnings come from restaurant industry clientele. You enjoy working with these clients, you’ve helped them wrestle with their issues and so you’ve become known for delivering a certain result. A service built as a product takes your knowledge of the most dominant hurdles, flags challenges and opportunities, and elegantly guides clients to their desired outcome through a structured and methodical process.
“A service built as a product … guides clients to their desired outcome”
This service will be branded. It will have a defined start and a clear process, can be offered at a fixed fee and your whole team will be competent in its application so that clients can consistently be guided to an outcome that they never thought possible.
So how may this look in practice? Let’s assume your firm wants to offer outsourced CFO services to your clients in the textiles industry. They consistently tell you that their three largest challenges are fluctuating supplier expenses, the need for better revenue forecasting and accurate asset management.
In response, you might create a product called “Ready Retail”, a 12-month service offered at a flat quarterly rate that provides this niche group with structured yet practical answers on how to resolve those three areas of contention. It empowers the clients’ team with knowledge and is built to deliver measurable improvements to the top and bottom lines.
How would clients view you now? You would surely cement your firm as their commercial advisor for all their future decision-making.
What to expect for your Business
Let’s be clear: productising services is not for everyone. Take note of what it would mean for you.
1. Productised services reshape your revenue mix between compliance and advisory. In Xero’s Australia 2018 Accounting Industry Performance Report, Doug LaBahn from Xero says practices that offer advisory services report higher overall revenue per client. Productised services position you as a sage for your clients, helping them to achieve what matters most to them, and growing your advisory income.
2. Do your clients come to you late for advice? Do they have a narrow perspective on what you can do for them? A branded solution can show why your firm should be consulted when a plan is first hatched, not simply sought out to clean up the aftermath.
3. There are masses of accountants in public practice, so how do you differentiate? A 2018 NAB study reported that 54% of SMEs would prefer a fixed-fee service, while only 16% would prefer time-based billing. A structured product lets you offer your clients the fixed-fee service that they prefer.
4. Practice partners can’t do all the heavy lifting; team involvement will increase advisory earnings. A client of mine recently educated about one-third of the team in their new productised solution. In one year, they experienced an 11% increase in advisory revenue – two-thirds of that increase from the team that sold the product!
Every professional services firm needs to provide services that are truly valued, in a repeatable and cost-effective manner. A market-recognisable product can transform your clients’ results and build your legacy.
William Pegg specialises in working with public practitioners to help them differentiate and increase their advisory revenue.