382 PAID ADS To Find Accounting Clients… Let’s Debate!

Man, the world runs today on paid ads. It really does. But for accounting firms, I mean, I think that the reaction of 99% of accounting firms here is, is what I. I have more than enough work to do. I would ever pay for more work. It's a good point. Is it? A valid point is also, there are actually a growing number of firms that do paid acquisition as well. So today we're going to dig into the nuance. What are the right ways to do paid acquisition? What's the way the most firms do it, which is not right? And how will you know if it might be for you? Because there's people listening to this right now who could probably benefit from it. There's even more people who could take a few steps to be in a position where it could actually become a useful tool. But there's also a lot of people who have waded into this and burned a whole lot of money doing it. And I don't want that to be you. So come on in, take my hand, put the wallet away. We don't need to burn any cash on paid ads yet. And let's talk about it. Honestly. Stuff like social media ads and, and Google adsense, stuff like that, it is the most unbelievable business. It really is the notion that you just put money into it and things just kind of happen and then the money disappears. Like, if you've ever run paid ads, that's truly how it feels like they dress it up in all these different, you know, methods for targeting and stuff like that. And it really is impressive. And, you know, stuff like what LinkedIn does. Even though LinkedIn is definitely the most premium platform like this right now, because it can be so targeted like it is, it's pretty amazing the level of control that you have over who ads get put in front of. And obviously there's a lot of incentives to innovate here, but the business is literally put a payment method in, set up a budget, and money machine goes burr. And now your balance is at zero. Like, it's wild. And we all. Honestly, it's weird that, like, we all blindly trust that behind the scenes, like, oh, yeah, no, 20,000 people. We. We totally showed 20,000 people your ad. And obviously there's a lot for these platforms to lose by people not trusting that. But it truly is an amazing invention of society, how paid ads work these days. Okay, pros and cons of paid ads, arguments for, and arguments against, arguments for, arguments against. It is the most vast discovery engine that exists today. The only thing standing between what you do and Your and, and you and your identity being in front of a whole bunch of people right now is your checkbook. It is the ultimate pay to win scenario. That's not true. I guess pay to win implies that you're actually going to win. You'll definitely pay. And just think about like how much of the economy is advertising. There is a reason for that. Another argument for we actually do, in the grand scheme of things, pretty high ticket stuff and generally retain clients for years. So the normal calculus here is like, what is the lifetime value of the customer and what is the acquisition cost? When your LTV for a customer is like, say you charge 1200 bucks a year to this person is probably a tax firm example. And on average, you keep those clients three years. I mean, if the lifetime value of your average customer is three to four grand, you can run a lot of ads with three to four thousand dollars. Our last argument for it could still be a path to find better work. And this is, this is the problem with anyone that says we're not taking on clients big time red flag or we already have enough work. Welcome to the situation that most accounting firms are in. It's not something to pride yourself on. Honestly, being busy, I don't know, I don't want to. I don't discount that too much because there is something to be said for having the courage to go out and run your own firm and like actually get to a point where you are independent and running a firm, like, I don't want to diminish the value or impressiveness of that at all because that's a really hard, really scary thing to do that not many people can do. But to be on the other side of that and run a mature firm and pride yourself in how busy you are, oftentimes that's a trap. It might mean you're saying yes to do many things, but it definitely means you don't have your eye on the real prize, which is how do we continue to do better? Because most of these firms that are at capacity, like, they are treading water, people are burning out. I mean, you see it all over the profession. But they're like, we don't need, we don't need any more. We're doing good. We already got too much. But then to bring this back to yesterday's podcast, the whole notion of making time, if all you're doing is treading water, you will not stop just treading water and being overwhelmed until you hit pause and you find a way to do better, not more better. That's the Only escape from that situation. The passage of time won't get you there. And if you know what better looks like, and that's kind of step one is how do we even define better if you know what better looks like? A potential upside of paid ads is being able to target those people who are better. If you have a very clear notion of like what that demographic is and the ad platform gives you a way to target just those types of people if bad. If Beekeeping ended up being a super profitable niche for me, I mean, in my managed accounting business where we were doing like back office and accounting stuff, the average client there was like two grand a month. And I mean those clients were super, super sticky where I would even say the average, like on average, we would keep one of those clients probably five to seven years. And so if you do some math, 2,000 bucks a month, five to seven years. I mean, the lifetime value of, of one of those clients is basically 100k. That is a lot of paid ads. Obviously there's no point in burning 100k worth of paid ads. But if I'm serving beekeepers and I can Target people on LinkedIn that run beekeeping businesses within a certain revenue range and are like, you know, association members of this specific body, that's probably worthwhile if those are the path to better for me. Now, arguments against paid ads, the most obvious one, do you really need more work? It is a new thing to learn. And the biggest counter argument these days with organic discovery on social media, do you even need it? And that's actually the most valid of the counter arguments here. So how do we do it and when do we do it to kind of continue on that last point, Ultimately paid acquisition still has to convert. Everybody has ad blindness these days. And so you scroll past things that aren't interesting and if you don't have the power to get somebody to stop scrolling, you going to have the same problems with your ads that you do with organic stuff. So if you can't get organic content to convert with the audience that you want to see it, then don't plan on your paid content working either. And so if I think about the social media stuff that I do, what's the, what's the highest converting stuff that I've ever done? Stuff that always converts really well is tech discovery stuff. Everybody's. And that's, there's like an element of FOMO there where they don't want to miss out on the tool that can be transformational for their practice. That is something that always converts really really well. So if I had a product and I started, you know, selling a digital product or something like that, and it was $200 and I'm considering doing paid ads, I would have to have a post or a graphic or something like that that was so high converting and so attention grabbing that I knew that I could pour more money into that to get it to more eyeballs, to get to where the cost of acquiring that next customer was less than, you know, the $200 or whatever they're going to pay me for that product. And even that is a little bit short sighted because that's not even capturing what the lifetime value of a potential buyer would be in a business like mine. Like if I'm running a proper sort of Internet creator business, there is a value ladder there, just like there needs to be in your accounting firm where the first thing that you sell somebody isn't the AAA gold platinum tier package. It is, you know, maybe that $200 product, but then you've got, you know, a $600 thing and then a $2,000 thing and then your big dollar, like $12,000 thing. And each step of the person that kind of goes through that process, you have a smaller and smaller percentage of people that go to the next thing. Right. And this is just a value ladder in any business. As we've talked about on the pod quite a bit, firms right now are too weighted to the middle of that value ladder. We don't come down with products that will attract more people than ever before to what you do so that they even know that you exist. Because we think, oh, if we have to serve them, we can't serve any more clients than we do right now. Well, right now there's high scale ways to serve through products that are not you preparing somebody's tax return or doing their accounting. But then we also don't go high enough up the value ladder. You have a hundred people in your most premium service offering. Without a doubt, there are people amongst those, a hundred who would pay you more to do more for them. And so the lifetime value of somebody that you attract via a paid ad, it's the average kind of total spend of that person. So even if the ad is only to sell the thing that is at the bottom of the value ladder, say that's 200 bucks, it may still be okay if it cost me 300 bucks to acquire that customer, if they eventually go on and spend, you know, 500 bucks on average or something like that. And this is kind of one of the things that makes a more compelling case for service businesses leaning into paid ads is just the massive lifetime value of finding a good client this way. So it's gotta start with something that converts really, really well. Organic and this is actually one another a really powerful argument for learning how to write online and create content consistently and making a deal with yourself. I'm going to post on LinkedIn every single day for the next 365 days is a year from now you're not only going to understand all that better and have unlocked all sorts of opportunities, but if you wanted to, you will be able to create much more compelling stuff that can be run as paid ads. If you really wanted to pour gasoline on whatever you were building and in a good way light it on fire in like a yeah, you know what I mean. This episode is brought to you in part by the fine folks at Live Flow. I am a unapologetic lover of notion. In fact, my whole like personal and business life runs on notion now. And the reason I like it is it's just like a very open ended tool for like doing data and database stuff, but also narrative things like writing. And if you're a notion nerd, you get it. Okay. Live Flow's new financial dashboards are the closest thing I have seen to finance notion in terms of I can build like open ended narrative docs that I send to my clients with all the words and explainers that I want to include, but embedded with very real financial Data from their QuickBooks or their Xero file. And I can publish these reports either as snapshots that are static and never change or even publish like continuously updating reports that are pulling in live data from the ledger. So as long as the accounting file is up to date, it continues syncing that stuff in if that's a, you know, a dashboard that the client looks at on their phone every morning or report they check in on every week. Super flexible reporting platform. Not like this, sort of pretty templatized. Here are the 12 different types of reports you can present. It's totally open ended. You can connect it back to anything in the accounting ledger. But because it's liveflow they also give you a bunch of templates if you don't wanna have to build it from scratch. Gives you a much easier way to get started. And that's why I like liveflow. Learn more Check out the link down in the show Notes this episode is sponsored in part by Ramp Gang New Year's resolutions. They are just around the corner. They're gonna creeping up, creeping up Any old day now. And my resolution for you is for your clients to stop using stanky old financial products. Okay? So many bookkeeping, workflow issues and even fraud issues can be easily presented today. Presented, prevented. That's what they could be today. Easily prevented by a better banking and card stack. Did he just. What did he just say? Yeah, banking and card stack. It's tech buddy, your client that just bumbled on into the Wells Fargo across the street. The Chase, whatever it is, is a better option. Ramp. It's a spend management platform. It's gonna save you a whole pile of headaches when it comes to BO bookkeeping workflows. And when it comes to your clients being able to allocate spend to members of the team, I'm not talking about the office card that they can go out and get donuts with and buy staplers. No, like responsible spend manage. And you, the accountants. Like, we're actually in a pretty good spot where we could be advisors here and help them modernize their money. Tech stack, okay. I'm a happy user myself. We actually use Ramp internally. Good tool, good platform. Learn more. The link down in the show notes. Now, oftentimes those paid ads don't even need to be for a paid thing. It could be for a giveaway. It could simply be. Here's a framework. Give me your email address and I'll send you the framework. And now you've got them on an email list. The lifetime value of somebody that subscribes to my email, like that is a number that I can calculate. The only things that I have right now that people can pay me for are as my online community. Is that it? I think that's literally the only thing I have that accountants can buy. And so I could see like from that email list how many people signed up to the accountant community. And I don't really promote the account community. If I was more like serious and hardcore about this stuff, you know, I'd have a plug for realize in every single newsletter that I sent out. And I could see that like, okay, X percent of accountants that come through and sign up for this, they sign up for the community and they're there an average of X weeks. And so their lifetime value is this. And I could actually back into a value to every single email subscriber to, to be able to then justify, to say, like, okay, we could spend 30 cents to acquire a customer or $30 or whatever that is. And so if you've got an email list in your firm, especially the more targeted and specific that it is, If I can make really good money on beekeepers, then there's a high probability that if I get another beekeeper on that list that I could convert them into other paid services. So that paid ad doesn't even necessarily need to be for a paid thing if I know what that person is worth, you know, just getting on my email list, for example. Now the biggest trap here and what people get wrong is they don't know. Like they haven't done the work of knowing what will convert with people and they write something generic or something uninspired and then they do paid ads with that and it won't convert in a paid context for the same reason that it's not converting in an organic context. Like when I last year we did a huge research project, a big old study of kind of the 14 leading practice management systems and did a feature comparison across like 240 features for all these things, things. And it's still the biggest social post I've ever had. And on LinkedIn it had like 1800 comments or just something outrageous. And, you know, over 5000 firms have used this report now. And when you have something completely off the charts like that, that's a good signal. That would be a pretty darn good paid ad, right? I mean, it connected with way more people, probably five times the people that any of my other posts ever did. And so if there were ever a bit of content to pour some paid ads into, it would be that. Now, ultimately I gave that report away and I didn't even add those people to my email list. But like, the proper businessman way to do that is I've got a report like that for beekeepers. Like, I know dental clinics have a really hard time with their practice management systems and knowing what to pick. So they have some of the same struggles that accounting firms do, especially with a growing number of systems coming into the space and not being able to kind of make heads or tails of what's going to be the right one for you. If your space has a similar problem like this and you initially put it out organically and it can even be free and you just give it away in the beginning, but then it really picks up a bunch of traction organically and you see that, that people are really resonating with the problem that it solves, you can still then put it behind an email wall to say they have to give you their email address or, you know, charge 100 bucks for it or something like that, and, and then use that as a paid ad. But at that point you validated that there's a tremendous amount of interest in this thing that you have out there. And so what people get wrong with paid ads is they don't have this thing. And I don't want to make it sound like it's trivial to have that thing and find it. But you're not going to go out and hire an ads expert and the ads expert create that thing for you. Like it needs to be based in what you know about the people that you work with. And you have to have already proven that this is something that converts really well. Now even in this context, like the blocker can be the last thing that I need then is a thousand people to want me to do their tax return. Right. Like even like at the end of the day, I still run a service business. And the accounting firms are not sales engines. We actually saw it was Matt Patrick when he came on the podcast talking about how they've scaled a really big payroll practice. And it's like really payroll practice? Like isn't everybody kind of steering clear that super big, super profitable and people are actually paying really big multiples for payroll practices? He said something really smart. That is payroll practices are more of a sales engine. They are more sales dependent than say a tax practice which is going to be blocked on fulfillment and being able to get that work done payroll because people don't want to have to change payroll providers and because it is not as technically demanding to fulfill your bottleneck. And a payroll practice is going to more likely be the sales process than your ability to actually fulfill it. And so counter argument here to paid acquisition is even if you do have a killer ad and a thousand beekeepers now want to work with me, what the heck do I do? I can't even, I can't even serve a thousand bookkeepers. Well, if you're going to do a bunch of paid acquisition, I think you have to look beyond the basic like linear service delivery now for sure, there's probably a world where they could still attract better clients. Paid ads attract better clients than the ones that make up your client list today. And, and you evolve a traditional firm in this way. But there's also ways to sell higher leverage services and products which we talk about quite a bit on the podcast. Like what is a digital product that these people could buy that's you know, 400, it pulls them into your web a little bit more and is like passive income for you. Like it is something that you can sell without having to lift a finger, without having to do any more work. There's a lot as you get a little bit more into the service realm, there's a lot more versions of that thing that only require like a single consulting call. I mean we've, we've talked to Brandon hall where they will do, you know, 10 to $15,000 tax planning engagements. And they are not even their tax clients. Like they don't do the tax work for this client. So there's all sorts of things that you can package up here that are not necessarily like recurring traditional services. But there's also a high likelihood here that it leads to you finding better clients, which is kind of the ultimate goal is more premium recurring work. Because at the end of the day, running a firm just boils down to how do I find the next client that'll pay me 1.5x to do the exact same work? It's twice as profitable and I can cut three legacy projects. Like that is the North Star for running a small accounting firm. So all that is to say be mindful of what you're selling. If you're pouring a bunch of gasoline on that fire and doing a bunch of paid ads, it may behoove you to have a product that they can buy that doesn't require you having to lift a finger. Lots of big examples of people making really good money with that from like, you know, Justin Welsh has kind of a LinkedIn content creation course that's I think 400 bucks or something like that. And he's done, you know, three or four million dollars in the last few years just selling that course. And he doesn't have to lift a finger every time somebody buys that course. It's also, I would argue a case for communities inside of firms like me launching a community for beekeeping business owners and being attached to my firm or at least associated with my firm. I probably wouldn't put it in the same entity, but that's an example of a one to many service that is more scalable than just sitting down and doing tax work or doing bookkeeping. I think that's all I got on this subject. Again, the biggest mistakes people make is saying like they're going to go out and hire an ad, an ad person, somebody that knows how to hustle like the dashboard of a meta ads thing and how to optimize that stuff. That's not going to be the same person that can create a super high converting ad. You probably need both. So like in my case, if I were selling something new accountants like I would start with that study that super blew up and then I would probably engage an ads person to work through. Like, what's the best way to target this so that we're only putting it in front of the most relevant people? And then depending on what your goals are, if it's to sell digital products versus just to attract some slightly better clients, then you design kind of a funnel there to say like, do we want them to have to provide an email? Do we design an email sequence that they get automatically after they go through this process that continues to kind of warm them to what we do? I would still probably pull in an ad person, but the prerequisite to that ever working well is to have something that's going to convert and resonate with a very specific type of person. And if you try to do that with like a, like a general firm, like never in a million years, not going to happen. At that point, you're up against the ads that like TurboTax Live and QuickBooks Live Bookkeeping and stuff like that are running like, I'm not going to beat an ad with Danny DeVito in it. I got to have a specific angle that's interesting to a specific person to get them to stop scrolling that feed. Right. If you've had success with this, actually, like if you've done this in the past, successfully run paid ads, drop a comment. Be interesting to hear from you because it's very foreign for almost all firm owners these days. That's all we got for today. Thanks for coming and Hanging Gang.