512 How Overselling is Costing Accounting Firms Millions

Today we're getting into probably the biggest, dumbest mistake I made in selling accounting work. And it's an easy trap to get sucked into. In fact, a lot of today's thought leadership, I think, pulls us down the wrong direction where it's like we need to be, you know, very opinionated on kind of these big boilerplate packages we put in front of accountants and say, you don't even know this yet, but here are all the things that you need when that's actually like, the worst way to sell something because the client sees that and they're like, well, for one, that looks like a lot of money for. For two, let me just pick this package apart because I don't think I need this. I don't need that. But for three, they're like, buddy, I came to you with this one very specific pain. Can you cool it with this whole cornucopia of other things, like, can you. Can you just make my tooth stop hurting right now? That's all I want. So how do you navigate that? The fact that you know what a client needs better than they do? Is that a call then to sell them a bunch of stuff they don't even realize that they need? I would argue no. So we're going to dig into the nuance of that. Well, then what do you do? Because we also don't want to let them just go like, walking into the volcano because were ignorant to. To things that we may be aware of. Right. What's the balancing act? What's the version of that that leans into, like, making the most of people's buying behavior and kind of the psychology of all that. Let's talk about overselling and. And how to better navigate all this stuff. The biggest place this rears its head, and we've talked about this quite a bit before, is when we stand up a website and we talk about what we do and we. My name is Jason, and I will do your accounting. Or yes, my name is Jason and I will do your tax return. And this is what we do at Jason and company Be Boo bop. Here are the services. Come work with us. We will give you peace of mind and you will love it. Great. You look like every other accounting firm. Right. And we put out the laundry list of all the things that we do, which is the way that we think of our work. It's all the stuff that we do behind the scenes. It's all the stuff that I just spent my entire day on. This is how I do the work. But what that client could ultimately evolve into and all of the things we could potentially do for them are not the same things that will simply get them through the door. And what is your website's job? It is to get that next client through the door. And I'm not talking about like, like your client portal and logging in and doing all these other things. Talking about your website, your landing page where people learn about you. That thing's job is to get somebody into the next step in the process. It is as if you set up a Tinder profile and you say, here's the thing is I think the toilet paper roll should be pulled around the back, not over. I will only use Heinz ketchup. I can't be bothered to separate darks from whites. Meanwhile, the lady of your dreams is swiping through options right, gets to your profile. She's like, dude, why do I need any of this information? I'm just hungry and I got to eat dinner today. So how do we instead sell in sequence? Just solve the problems that they're having right now, even though we know that, yes, there will be more problems down the road. And you know this, I think there's this misplaced. We want to feel like an expert. We want to be as helpful, helpful as possible. And so we throw all this stuff on them to say like, oh yeah, then you're gonna need this and this and this so we can do it all. When they're just like, man, my, my tooth just hurts right now. I would love you to fix it. So how do we get to kind of a more sequential selling process here? The best way to attract your next client is around like a very specific offer to a pain that they feel. And it's, yeah, I talk a lot on the podcast about like saying that we do tax and saying we do bookkeeping. That's not enough. Saying that you do tax, that you do bookkeeping. For a dentist, better than nothing, right? Better than the last one. But in any domain where you are serving a specific type of client, better than saying, generally what you do is saying, here's a common, nuanced, rare problem that we will solve for you. If you're an accounting firm, they already know that you're probably going to do their bookkeeping and their tax. But what's the signal that you deeply understand a problem that a lot of those folks are struggling with. That is how you get to a specific offer that will feel like a no brainer to them where they're like, yeah, man, I've got two people working on this problem and it's We've struggled with, you know, this weird compliance thing for our type of business for the last few years. I would just love to pull in an expert that does this for 100 other people because this is, you know, creating risk for our business. Maybe it's consuming a bunch of time of my team where I'd rather use those folks elsewhere. To be clear, bad bookkeeping, bad taxes, it can create all sorts of problems. But they're not rare problems. They're problems that can be created for any type of business. We want to attract folks with rare problems. And if the counter argument is like, no, it's enough to say I'm the only tax pro for phlebotomists, great, you're going to get those same people anyways, talking about very specific phlebotomist problems. And so that, that very first problem that we solve for them, that is your kind of attraction offer the thing that gets them in the door, which is going to be different than what you do for them long term. And this is the trap we get caught into is all the long term stuff. We push that all out in front when they're like, buddy, buddy, I'm not there yet. And in fact, like, we've all done this man before. You got a client that's come in and maybe they've never paid for bookkeeping before or something like that, and you put your package in front of them, which includes monthly bookkeeping and a monthly advising call and all these other things, and they're like, holy goodness sakes, this is one, a lot for me to get my head around. But also two, that's a lot of money. As opposed to, they come in, they need bookkeeping, you sell them bookkeeping, you get a few months in, you're sending them, you know, PDF financials at the end of each month and they're like, I'm going to level with you. I'm glad that I have bookkeeping now, but I just don't know the first thing to do with this information. Great, let's talk about advising you as the advisor. You know, the next pain that they're going to feel before they feel it. And it's why you don't sell them the next thing until they feel it, right? The person with the toothache where it's actively hurting, they're going to value your solution to that a whole lot more when the tooth is hurting than if you're like, yes, sometimes people get toothaches from this. If you want, we can just go do this service right now. So you won't get it. Some people will say yes to that, but the people whose teeth already hurt, they're. Yeah, they're going to value that way more. Right. And so let me just give you some practical examples of where these pains kind of reveal themselves and we make the mistake of pre selling all the solutions before that person even actually feels that pain. What. What got me thinking down this line is Horosi's new $100 million money models book. I'll put a link to it in the show Notes. Very, very good book. They talk about the example of, you know, a guy that owns storage units and, you know, you get the first two months free or something like that with a contract, but you come in and, well, now you need a padlock, you want insurance for your stuff, all these different things. Right. And for every example I'm going to give you here, there's slimy examples of this that take it too far where you're like, I just wouldn't feel good about doing that. And as with all things professional services, I am one who wants to live between the definitely, like, psychology optimized, kind of more hardcore version of selling things. But, like, I want to live somewhere between that and the very outdated, antiquated professional services model. Like, the right answer is something in the middle. I think most of us can agree on that, but we got to look out for the reality that folks are going to happily pay for something when they're acutely feeling that pain. And so if we can sell more sequentially, you can end up selling the same work and getting much more. Yes. And actually sell that work at a higher price that people are more excited to pay for. Okay. Examples, show me someone that launches a fractional CFO practice, and I'll show you someone that ends up begrudgingly having to do bookkeeping. So you say we're going to do your CFO work, and you get into the first month's work, and you realize, okay, the bookkeeping is a total mess. We can't actually do anything with this. It's rationale for many firms to say we require both. If we're going to do your CFO work, we got to do your bookkeeping work too. But when somebody comes to you, they have CFO pains, they may not realize they have bookkeeping pains yet. And if I just sell them a solution for the CFO pains, month one, I can put a very detailed report in front of them and say, here's all the things that we're trying to show you right now and get you to Here are all of the problems in the books that are preventing us from doing that. But if we could, if we get this stuff fixed and if we, we had a solution for this, here's all the really cool outcomes we could enable for you. Which of those two timelines is going to have you being better paid for your work? The one where they see the opportunities and you've clearly pointed out like here are the holes and here are the issues. This is blocking us from going further. Or the scenario where somebody comes to you wanting to buy CFO stuff and then you have to talk them into also buying bookkeeping. That's, that's the trade off. And I'm not going to say there aren't upsides to both, but that's the downside of trying to sell everything up front versus selling the things once those problems reveal themselves. Some other examples, we talked about selling bookkeeping to someone who's never had bookkeeping before. That person doesn't know that they also need advisory, like somebody telling them what that stuff means every single month until they see the results. And they're like, yeah, no, I'm having a hard time making this actionable in my business. You go from them probably walking away if you give them a bookkeeping and advisory package up front because they're like, I can't pay for this to three to six months down the road being like, okay, I could see how this could unlock some stuff for me, but I actually need some help. Today's episode is brought to you in part by Carbon, the practice management system. Couple big announcements from Carbon over the summer if you've missed them. One, a totally brand new client facing portal, like a beefed up client experience called Carbon for clients. You can push tasks to it documents, E signatures, all that stuff for clients with multiple like entities and they're 1040, it's easy for them to quick switch between those accounts because I mean any business owner client we have, that's a problem, right? They've got their business. If you got the 1040, they've got eight other LLCs. Carbon for clients makes that easy to access. But then another big announcement was a first of its kind, super deep integration with Stanford Tax. Another tool we really like on this podcast because you got these really cool tax workflow tools but then none of them talk to your practice management system, right? Carbon wants to change that. Carbon's like an ecosystem first player. If you want the PM that's going to integrate with best of breed. Take a Look at carbon PMs right now. Are Kind of like separating into we're going to build our own versus we're going to integrate. Carbon's going hard down the integration path. The whole Stanford taxing is a good example of that. Got some videos on the YouTube channel about carbon if you haven't seen it in the wild before. I know folks down to like solo firms clear up to like some of these PE roll up platforms are using carbon one of the most mature options in the game in a, in a good way I would say. More information about Carbon down the show notes. Today's episode is brought to you in part by Mercury. Mercury is the FinTech that over 200,000 companies now trust for banking and running their finances. I'm a happy user myself. Long before they sponsor this podcast. My money has been with Mercury because it's just like man, traditional banks, they don't really seem to be going anywhere or getting any better. And you know all too well that struggle in fact, and it's dumb to even say out loud, but the greatest upside of your clients using better banking solutions might just be access. Not having to do two factor authentication Olympics, not having to have clients like forward you codes, you know the codes they get over text, the text that say never share this code with anyone. And then the process that we communicate to our clients is hey, when you get this, send this to me. Just the janky things we gotta do to get access to things. Because traditional banks, they don't let you handle like micro user stuff. Did I say micro user? Multi user stuff, granular permissions for the different people in your team. And even in the scenario where a client does give you your own login, then your entire team is like sharing your login buddy. There's like so many problems with that and so much risk in that where if you're just a little more opinionated and we're like hey, hey. Just so you know, all this fuss and headache around like getting access to this thing, there's a better way that we recommend come over here and check out Mercury. Sometimes we're like apologetic about what a pain it is to do this banking stuff. Stop apologizing, say client, go use this better alternative. There's a solution to this and it is your fault that you're not on the right platform. I'd encourage you to give Mercury a look. It is, it's genuinely really good. More information about Mercury down in the show notes. Another example is why a lot of firms historically have gotten into like QuickBooks training. That's how you get them in the door they think what they need is to know how to do this stuff better. Or the business owner wants a person on their team to get good at this stuff. They think that's the solution is if this person just takes a couple of QuickBooks courses, then they'll be able to do the work. But what would you say to that? Right? You already know the next problem they're going to have after that they're a little bit better, but they're still not a professional bookkeeper. So I selling bookkeeping training is a great way to drum up bookkeeping work. We had this with dentists big time. Every dentist thinks, oh, their, their practice manager can do the QuickBooks. It's trivial. You just go and you classify stuff. Creates all sorts of problems, right? So next step is like, okay, maybe we invest in some training for this person. Even though they could be doing other things. Invest in QuickBooks training is like, great, now they know where all the buttons are. But they're still bookkeeping professionals. They're certainly not like a controller. They can think about how to build a tech stack and a functioning back office. That's an entirely different set of skills. So what do you sell them? You sell them the QuickBooks training and then you got a plan for the next problem. Again, there are unethical ways of doing this, of being sneaky about it, but the reality is people are coming to us, giving us their money for this solution because they're acutely feeling this plane that they need some sort of solution for. And when the next problem reveals itself, you're going to be there to help them. And I mean, and you can even do stuff like, you know, roll the, roll the money they spent on that QuickBooks training into hands on help. And if, if this feels unfair to you to sell them one thing knowing is a very good likelihood that they'll just want you to do it themselves. Then when you do it for them and that costs four times as much as the training course, roll what they spent on the training course into what they're going to pay you to do the work. Like if that helps you sleep at night, that's totally fine. That's, that's, that's probably something I would do. Just from the standpoint that we would convert a bunch more because they're not going to deal with that feeling of, of, of that lost money. The, the investment they put into the training that may keep them from paying you to do it. You're like, we'll just take all that money, we'll roll it into a New engagement. I'm losing, you know, 400 bucks off the top of a thousand dollars a month engagement. That's not going to keep me up at night. Payroll services. Somebody comes to you wanting payroll, and the first time you're on the payroll, you realize, okay, the way that you're organizing all this, like the hours that people are working and all that, this is a bit of a mess. You need some help. I can see that. You need a better time card solution, time tracking software, something like that. So the payroll service leads to them needing a time tracking app recommendation, which then leads to them needing time tracking app implementation. So two ways of selling the same thing. When they come to us asking for payroll, do we sell them payroll, the payroll app, the implementation of the app, or do we sell on payroll? I'm going to sell on payroll because almost inevitably they're going to end up at the same destination and be much more happy to pay for those subsequent solutions. Y' all know I'm a total nerd on renewals. And buckle up for a whole bunch of renewal content the next couple of months because it is the single greatest driver of profitability in your practice. And I think me having some more comprehensive content around renewals will actually make a huge profit difference in your practice. So I'm actually really hot on this stuff right now. Tune in, tune in for that because I actually think it's going to be a really exciting few months where we actually enable transformations of so many practices by changing our approach to renewals. But in my firm, very fast growing firm, but the largest source of new growth was always upsells from existing clients. And once clients open their mind to, oh boy, like, yeah, having you just do a little bit more of this, rather than me having to hire somebody or take up another 10 or 20 hours of this person's time, that refactoring is one of the most powerful transformations you can take your clients through because they look at accounting help at through the lens of what traditional accounting firms do, which is piecemeal ad hoc work at more or less a set price. They have an expectation for what that costs. But if they start seeing you through the lens of FTEs, these are the people I would otherwise have to do for this work, buddy. It blows the ceiling off of the fees that we can command. This is how I grew my cast practice to one and a half million in 18 months. You're not paying me for bookkeeping, you're paying me for Jim's time back. That guy who's wasting a bunch of time on this and go do something else. You're paying me six grand a month because that's a whole lot cheaper than the cost of a controller. Who's not going to be very happy about having to do your bookkeeping as well. People aren't bought into this the first time they come to buy something from you. Usually, even though it's something that we're really hot about and we look at our best engagements and we're like, oh, man, these work really well because we do everything for these people. People just. They just don't start there. And so we can't, like, tell them that we'll only. Only Heinz ketchup when they're just looking for dinner. Right. We'll see how I feel about it tomorrow. That whole tender thing may be one of my better analogies. Other examples, business tax prep leading into business book cleanup. There's a reason that TurboTax, full service tax, whatever they call it, is just charging people to do their tax work. You go to that landing page, you just see a price for doing tax work. But you know that doesn't include books cleanup because most people don't realize they have that problem until somebody shows them. So it's very hard to come out of the gate and be like, you need to pay us to fix all the bookkeeping work that Mema just did for you. They're like, what do you mean? Meemaw's great again, it is kind of an ethical thing, right? Like, do you feel like you can actually get into that when you know what the problem is going to be? I think there's a way to do that effectively that isn't us trying to convince them of a thing that they need before they realize it. Because I can tell you then when they're wrong, then they've got to deal with the whole notion of them having to admit that they're wrong to buy more work from you. And that's a whole nother barrier to them saying, yes. I've heard Brandon hall talk about how they do these big workshops towards the end of the year for real estate folks to DIY their sort of sort of tax planning and tax strategy. And if you hear that as a tax pro, you're like, okay, you're going to give somebody a spreadsheet and that's going to help them do their tax planning. I think there's a little more to it than that. But the whole reason is it leads to a whole bunch of done for you tax planning. So is the DIY version as good as A tax pro doing it for you? Of course not. But do people realize they can't do it themselves before they get into that? No, they think they can. They think there's, there's probably a way to do this. I just got to figure it out. Oh, here's a workshop I can attend to show me how to do this. And for many people that will be enough. And that may be the most surprising thing actually is they're like, okay, cool, thanks for this thing. We're going to go and use this now. You never hear from them again. But many of those people will be like, nah, I don't want to make the time for this. You roll that money into a proper engagement and you got someone in the door who wouldn't have otherwise come in because he didn't realize the down the road problems that you knew would be there, but that they're not ready to pay for upfront. When we talk about like my, my service library content, which is kind of like having an internal language for all the work that you do for people, like, what's bookkeeping? One, bookkeeping to payroll one, payroll two, bill pay three, stuff like that, every single one of these ought to have a logical upsell path where it's like, okay, we're doing bill pay for these people. We can now do a really cool version of cash advisory for these people because we can see all their short term cash outlays. And so when we did renewals, we got super tactical about like, this client has XYZ service now. We're pretty sure the problems they're feeling are this. And now we can sell them a solution. That stuff happens gradually over time, but oftentimes we see the very best engagements where they are three years down the road and we're doing 20 different things for them. And the next client comes in the door that looks like that client, and we're like, hey, Here are these 20 things you should be really excited to pass to do. And they're like, chill, bro. I just, my, my bookkeeper just got sick and so I just need somebody to do my bookkeeping. Now you take this to the opposite extreme. Are there bad versions of this? For sure. Like versions that are kind of unethical, like you're tricking people into one thing, getting them to do another. But the more we can acknowledge that people are willing and excited to pay for a thing when they're feeling that pain, the more we can acknowledge that if we can align when we sell that thing to when they feel the pain, the more likely they're going to say yes, the more they're going to be willing to pay. And all of those pains don't generally come all at one time, because when you fix one problem for somebody, they then feel the next problem. And more often than not, we're going to be better off tackling those things one at a time. Again, loads of nuance in that, but a lesson that I kind of like learned the hard way before he eventually got to a more sequential way of selling solutions rather than trying to front load the whole like everything in the kitchen sink up front. Hopefully you got some useful tidbits from that. Any other tidbits you got, any sort of sales hacks or anything like that? Drop that stuff in the comments. Thanks for coming hanging today. I'll see you in the next one. Ra.