416 The Secret To Higher Paying Clients

Listen in, my friends. Today, the secrets to higher paying clients. How to get people that'll just bring you duffel bags full of cash for the stuff that you already do for cheapskate clients that argue with you about fees and you already discounted, but they're still complaining. Why is it that people will pay vastly different amounts of money? You already know it's just because they value the work that you do differently. But how do we attract those folks? How do we get those people to come to our firm so that over time we're not doing more of the same, we're doing better? This is the third part of a little micro series. We're going to land the plane today with just going out and finding your dream clients. Let's do it. I hate to, I. I'm sorry that I'm using a three legged stool analogy because I hate analogies like this because stool dynamics do not ultimately prove any point that you're making, Guy. But forgive me, because it works here. First leg of the stool, we talked about fulfillment, getting the work done. Second leg, lead volume. Third leg, what we're talking about today, lead quality. And oftentimes this sort of framework is framed where the third leg is your close rate. The frequency at which you can actually convert a lead to a sale. But the framing here, like that doesn't really make sense. In fact, that's an awful goal to have. I once worked with a person that took a tremendous amount of pride from having closed like every person that he had ever sat down with and he's like, that means the great. I'm the greatest salesperson of all time. And I'm like, no, that, that means that you're just giving more away than anybody else is. Do you want to be the Hershey bar or you want to be the Toblerone? Yeah, in the checkout line where it costs twice as much and maybe the ingredients are a bit better, but a lot of that's perception, right? I don't want to give you a bigger chocolate bar. I just want you to pay more for the chocolate bar I got. All right, so lead quality, what does it feel like when you are doing this? Right. And what does it feel like when you, when you just aren't? If you are over reliant on this I. E. Overinvesting in it, it's probably gonna mean a low lead volume and a high concentration risk. If there are like only three unicorns in the world that are good enough, high quality enough for you, obviously we gotta balance that out. I don't know a single firm that has that problem though. Symptoms of underutilization. This. This one's a little more likely. Try this one on for size. Doing more without doing better. You take in more clients, but they're more or less like the same as what you already have. Kind of middle of the road. More A clients is good, but more clients across the board from A to C to to to what are the other ones? B to D, jump to C to D to F. More across the board. That's just more. That's not better. In fact, your life usually will get worse when you're just doing more. The goal is more A clients. The goal is finding a new S tier client. Something that's even better than what you already have. As you're churning out the Cs, Ds and F F Fs now, success here sounds like both willingness and ability to pay. Higher rates in new clients is better than that of old clients. So they're both happy to pay it and they have the ability to pay. You gotta have both of those things. Sometimes you have one but not the other. And I'm not talking about restaurant owners. That's just where your mind went. Now a failure in this regard. It's just pulling in a high volume, low quality work or same same work like that whole like a ABCD F like scale. If you think about where all your clients slide into that, that kind of, that really is the North Star. Like only adding A's and shedding the lower grades. That's kind of the goal here. So it's not about close rate. I'm not impressed by your close rate. I, I'm not impressed by how many people fill out the form on your website because that's just a product of how much filtering did the, did the landing page do? If it says the minimum fee is a million dollars to work with me, that's going to be a smaller number of leads. Should I not be impressed by that? No, I would be extremely impressed by that. That's why this stool has three legs. Oh, sidebar. Anybody ever seen a three legged stool sitting on a stool right now? Hang on. Five legs. I honestly. Wow. That's actually surprising. But for the purposes of this miniseries, let's, let's assume they have three legs. All right. Four questions I want you to consider. If we, if we really think about these things, we can get better into the heads of these leads as they're coming in to ensure they're the right people and they're going to pay it. Pay really well, first question, how many alternatives does this lead perceive if they can literally price shop you against anybody else, but you are a price taker and you are in a race to the bottom. This is arguably the case for referrals for people who are like, yeah, no, use my person. Like, this is who they are. Now, not all referrals are made the same. Some are fervent where they're like, this is the only person for taxidermists. But when you're taking a referral, like, you will still get price shopped oftentimes. In my experience, while a referral is oftentimes better than nothing, it's far from being perceived as, as a leader in the specific thing that that business does. Because I can tell you, every business owner thinks there is. That their type of business is unique, that they are snowflakes. And if you disagree, look in the mirror, buddy. You can't. You can apply general business wisdom to running an accounting firm. If you only knew. If you only knew how bad our tax software. If you only knew that Everybody does this man. Like, whether it's real or not. The answer is somewhere in the middle. But we think that our businesses are perfect and unique just like everybody else does. I hope for my sake that there is something different about it, because here I am talking thought leadership about running accounting firms. But we will look at everybody else's business in these domains that we don't know. Like, we haven't seen enough of them to understand what makes them unique. But from the outside, we'll say, like, no, no, no, no. They're the same as anybody else. I heard a really good quote about this the other day. Something like, you don't learn to fill in the cracks of your knowledge. You learn to discover more things that you don't know. And that's so true. Like, the more of the world that you see, the more you realize how complex things are, the more into a space you get, the more you learn what nuance there is that the business owner understands that you don't understand yet because you're not there. You don't do it if a client looks at you. Oh, in fact, this happens all the time. Oh, I got a YouTube video where I talked with one of these people and it made everybody mad. If a client tells you, like, says anything, alluding to, why can you not run your accounting firm better? You tell them, if you only knew what went into running an accounting firm. And we're right. But usually they're right a little bit too. Like, the answer is always Something in the middle. We all have these blind spots, but we all think that what we do is very different. And that is why your client perceiving you as someone who can serve somebody, you, somebody different, somebody who can serve like the, the uniqueness of that type of business. That's why that is so very important. And if they think that the dude across the street can do the same thing, then they're just shopping you on price and that sucks. Question number two. How painful is the problem that you're solving for them? Oftentimes, you know, if you're just doing compliance books, if a, if a business just needs a set of books to be able to file a tax return, that's not a painful problem. And, and they're going to get that done probably as cheaply as they possibly can, knowing that the tax pro is going to review the books and they'll make sure that they get all the deductions that they're entitled to. Right. And obviously we know that that is problematic. And so bookkeeping and in that situation for many people is not a very painful problem. And what we try to do oftentimes is educate the entire world on the value of bookkeeping. We're going to move that mountain ourselves rather than finding the other thing that we can do for them that actually is really valuable. So every type of business has all sorts of adjacent things that we get sucked into. Where the client sends you the email, you're like, buddy, I don't have the first freaking clue what you're even talking about. What's that have to do with accounting tax? And before you know it, you're like 12 pages into some regulations trying to figure this thing out to prepare this little like half page sized form for them because the client's not capable of reading instructions obviously. And so you figured that thing out for them. Every type of business has that thing. And oftentimes it is those like low hanging fruit sort of things that they just despise that are much, much more painful than the, than the core things that we do. You look at employees with stock options, yes, we do the tax reporting for them. But if you specialize in that, the valuable thing that you're giving them beyond just getting the tax forms done, right? So actually a whole heck of a lot of advising, your understanding of it and the tax implic implications of the different things that they may do, that's really, really valuable. That's what's keeping them up at night, is not having an advisor to know how to navigate that stuff. Easiest way to find the most painful pain that you're solving inside of your firm is to look at who are my happiest clients, who are happily paying me top dollar and why. That's a really useful thing to dive into. Have that conversation, get a deep understanding of why they value you so much. Oftentimes it' in their history where maybe there was a problem that they had to deal with for a really long time. And whatever that tells you, that client that you have is not the only one in the universe. It's the only one that you have today. And your life would be so different if your entire client list was a clone of today's best client. And best client is not. I do more for them. Best client is they value more what I do and so they will pay more for it. And buddy, I mean we talk a lot about just like basic arithmetic of the margins of your firm. All it takes is one client who will pay you more. You can, you can get rid of two legacy projects. All of your problems, from capacity to getting home by dinner, remember your kids names. Like all that stuff is solved by better paying clients. And clients will pay you more when the problems you're solving are more painful. This episode is sponsored in part by cloud accountant staffing. Do you ever wonder why offshore staffing agencies sponsor so much of my content? Because I'll be honest, it's not cheap. Like let me just do some like mental math here for you. Most of the brands, like software companies sponsor my content these days. Like they're pretty kind of the bigger platforms because like it's not the cheapest thing anymore. And so how can these little offshore staffing groups afford to advertise and advertise on my platforms for years? I'll tell you how. Because it's worth working. Not like the ads converting. I mean the ads are converting but firms are going to these groups and they're having fantastic luck and they're going back again and again and again. Cloud ACCOUNT STAFFING STORY they were an accounting firm that started hiring accountants in the Philippines, had fantastic luck with it and then like just started doing it for some other firms. And it is one of the fastest growing trends in running small accounting firms right now is the world is getting smaller. You know how hard it is to find like really talented onshore accountants. For me, the last four hires that I made in my firm were all in the Philippines. If you want to work with a group that feels like an accounting firm that's going to help you find people because that was truly cloud accountant Staffing's origin story. It's worth checking them out. Linked cast down in the show notes. Today's episode is sponsored in part by Canopy, the practice management system Canopy. They're one of the earliest, like really solid cloud PMs that the accounting space got and they continue to somehow be like very progressive and kind of at the leading edge of cool new stuff. Unlike a lot of very early cloud tools where they just kind of end up looking long in the teeth, man. Canopy has one of the, if not the most complete feature sets in the biz. And everything that they've got in their practice management system, just super polished, super professional, something you can proudly put in front of your clients and your clients not have to be like, like give you some grace because they just expect that the tools that you use will suck. Oh my gosh, how long has that been a problem in the accounting industry where they're like, yeah, it's cute. Wow, look at that portal. I'm just impressed. My accountant has a portal where it's like, no, like we should have really good tech that is professional and works as well as any other apps that that person uses. That's been my experience with Canopy. Just polished from end to end. One of the most comprehensive systems out there. To learn more about Canopy, check out the link down in the show notes. Can you build an accounting firm only ever talking about bookkeeping and tax? You absolutely can. You truly, truly can. But the fact that you can does not mean that that's the most optimized path to finding people who will pay you even more. Like that's, that's the goal, man. Third question to consider. Do they have the money to pay to solve it? Again, I didn't bring up restaurant clients. That was your mind that went there. If you're thinking about where to specialize, this is a really is a big consideration. It's why 80% of accounting firms specialization is dental, because they've got the money to pay for it and they could honestly care less about the books. They just, they want to be chairside. Sometimes you will get down into a space and you just realize the money's not there. In fact, I've talked with folks that serve like, you know, creators and streamers and stuff like that. And that's just really hard because as visible as those things are and as cool as they can be, there's just not an abundance of money there for professional support. And maybe there's a level that you just haven't gotten to yet. A scale of business there that can Justify that. Oftentimes there will be a threshold below which you can do, you know, kind of digital products and thought leadership and all that. But you're not going to take them on as like a one on one sort of ongoing client. But it's definitely worth getting those people in the pipeline so that when they do develop they can come on board. There are also people who, who do have the money to pay but will pretend that they don't. And that goes back to question number two. It's just because they don't value what you're doing enough. And it's not generally because they're bad people. It's because the problems that you're solving are just not super painful or they once were. And over time you've done such a good job that they no longer feel it as painfully as they once did and they forget that pain and they don't value you as much. That's a really sad one, but it's kind of human nature oftentimes. So number one, how many alternatives do they perceive? Number two, how painful is the problem you're solving? Number three, do they have the money to pay? And number four, have they gotten a taste? There's a reason the drug dealers give you the first one for free. It's a proven model that has worked for decades. But accounting firms, these days, the vast majority of accounting firms will only bother taking on a client if they're bringing them everything. But the reality is, we talked about this yesterday on the lead volume episode. You will oftentimes find your way into better clients when you sell something that their current provider won't do. And this is because you're able to do this one off project with them while they still haven't dumped their current provider. If you're in a business and you're very dependent upon your provider, it's very, very risky to just like pull the plug and think that the next one is going to be better. And so for them to have a peek into what it's like to work with you and they see that you're better, you have a greater depth of expertise, then they can imagine moving all the other stuff. But if the only thing that you're offering is a full sale switch of supporting them on everything, then the people that you will attract are the people that don't have an option. Oftentimes the folks that are out perusing the market, they are either firm hoppers or somebody who did something dumb, maybe lost their professional help, and now they're like, oh, I got to figure Something out, like, think about this for yourself. Would you find yourself in that position very often? Probably not. Now there are a lot of crappy practitioners out there that don't take great care of their clients and clients get fed up and they leave. But you also know that there's a whole lot of people out there that are firm hoppers. And if you look at all the folks that are changing firms this year, what percentage of all those prospective people looking for a new firm are either firm hoppers or just got fired? Like, what percentage do you think that is? Probably I, I'm totally pulling a number out of thin air. Probably 2/3 to 3/4 of the folks going out there shopping firms are firm hoppers. Like they change, you know, every three years or less or they just got fired. Which means the people hitting up your lead form, maybe not the best option. It's the folks who still have professional help that you got to put a little doormat out for, show them the side door, go out and talk about not the core stuff, not the bookkeeping, not the tax, but that adjacent thing that you will also do for them that is a problem and pain specific to that type of business that the current provider doesn't do, where they can come and do that and get that level of support from you. And now that they have that comfort level, they're happily going to bring you the rest of their business that's oftentimes a more premium client. I've also really pushed this just through the lens of pre dazzling people when, when folks come in, they don't know anything about you. And if you're really good at what you do and your firm is great, they're usually not ready to pay for that because they haven't had an experience with a great firm. And we're not all there yet, but there's a lot of great firms that listen to this podcast that are astronomically better than the normal distribution of accounting firms, which you know, is not super, super impressive. And if you're doing really high level stuff for people, if somebody's coming from a normal firm, they're not ready for that. Like they're not ready for just how good that can be. Which means they're not ready for like just what they would be willing to pay for that and the value of a limited scope project as much as it feels like a waste and work that I don't want to do. Like really, I have recurring work over here, you're going to make me do one off work. If you can bring those engagements in at 20% higher day one, that makes a huge difference because that's not just 20% year one, that is 20% more in perpetuity, not just revenue profit for as long as you have that client. You also get the opportunity to learn if this person's a maniac or they can't follow through before you bring them in. And those maniac clients, the ones who won't give you stuff on a timely basis and all that, they're oftentimes the ones that are totally bungling your workflow. So you're also weeding those out as a result of doing that upfront project. But if that pre dazzling exercise means that you can convert them at a 20% higher rate for ongoing work, that's huge. I mean, if you're in a 40% margin firm, which is pretty normal in a 40% margin firm, if you're bringing in projects at a 20% higher level, that project is 50% more profitable than the ones that you have now. That's it, man. That's the goal. That's the whole game is finding clients like that. And if that same client would have only paid you that base amount without the that upfront project, like that's the default for most people right now. That's how most firms bring in their work. That was how I brought in a lot of my work. And it honestly, it was, it wasn't until we did like, you know, you end up doing some work with somebody around a transaction or some kind of weird one off thing where you're like, I really want to take this. And you're like, okay, okay. And then they really like you and then they're like, you realize, like, wow, they have a very different appetite for what they will pay us compared to the random person that comes in with no context. Now, there's lots of ways to juice this even further from, you know, being perceived one of one from like this being a bit of a, like a parasocial relationship. They follow you on social media, they listen to your podcast, they've seen you speak, stuff like that. There's a whole lot of things you can do around that. But I know that's, that's uncomfortable for a lot of folks. The goal is one way or another to be perceived as being unique. What's the shortest path to being perceived as like, you know, top two, three people in the space? And it doesn't have to be on raw technical capabilities as we like to measure them, as we measure ourselves against other professionals. Oftentimes, even though this is kind of Wrong. It is just a product of persistence, of always being there, of being the first person that people think of within that space because they heard you on the podcast, because they heard ads or they saw ads in their favorite industry newsletter. We all. We all want this to be like a meritocracy, like, for the folks who are the technical, biggest brains to always win. The reality is, like, that's just not how it works. Does it make a difference? For sure. But fulfillment, it's only one leg of the stool. And how good you are at the technical stuff is one pretty small part of that leg, I hate to admit. The operations, the efficiency, the getting the work out the door, the like, helping the client in a compassionate way, where they leave with a smile on their face like, that is really good fulfillment. But if all of our extra time goes into CPE for technical training, not only are we missing the other two legs of the stool, we're missing, like, 80% of the fulfillment leg. Because it's not just about the technical. Do you have to have it? Yes. Do I wish that was a hundred percent of running an accounting firm? I honestly do. Because there's, like, a certain purity to that of, like, you know, it's the thing that we take pride in, the technical abilities, but it's not the thing that gets you home in time for dinner and daddy's gotta eat. I'm sorry. That was. I shouldn't have said that. Hey, thanks for joining me on this little, little miniseries here. We all have a. One of these legs that is most comfortable for us. We are naturally drawn to this, and it can be hard not to, like, then build an argument around, like, stop telling me not to do this thing that I am. That I am most comfortable with. Reality is it requires balance. And there's a lot of ways to get to that balance. You don't have to put it all on your back. I. I mean, you can pull in a partner that will help with this. You can staff, you know, parts of your firm that will support these other things that maybe you don't enjoy as much or you aren't as naturally inclined in. But the optimized firm is the one that is doing all three of these things. It's doing fulfillment well. It has a strategy for lead volume and a strategy for lead quality. Because it's not just about getting the work done. It's about who's on the list. It's about what they're willing to pay you. It's about ensuring that the next client that's an a client or an S tier client. And until we are pushing the boundaries of that. I mean, like, maybe the. One of the greatest moments in firm running is when you put a YOLO price on a three, three tier proposal and somebody says yes without batting an eyelash. And you're like, look, look, be cool, be cool, be cool. Okay. Nope, Sounds good. Talk to you Monday. And you're like, oh, I didn't, I didn't realize that this universe existed. But I'm here now and I want to meet some of this person's friends. For me, I had several layers of that in my firm running journey where like, if I looked back 36 months before, I'm like, wait a minute, What? That's impossible. But there's always a bigger fish. Like, accounting firms are just at a big old food chain. There's always a bigger fish. Don't ever tell yourself that, like, we're here, we're comfortable, we're going to serve these people until the end of time. You certainly can do that. But in my experience, it gets hard. Like, that is the path to burnout, because you end up doing more, not doing better. That's it for today, gang. Thanks for coming to hang. We got a Q and A coming tomorrow. Any questions, drop them down in the comments and I'll see you there.