Accounting firms are short on resources and are actively seeking ways to address the deficiency. Many are pruning their rolls, culling unprofitable or problem clients. Others are taking what I consider a highly questionable approach, one that was in vogue 20 and more years ago.
I'm talking about cross-selling. Sounds like a motherhood-and-apple-pie concept, but it's fraught with issues, which is why its failure rate is high.
I learned this the hard way when I introduced one of my first midmarket CPA firm clients to an account strategy session method, which I had learned selling in the large accounts division at IBM. Once a year, the sales/systems engineering team would brainstorm ways to increase revenue by expanding our offerings for a particular client. We recognized that without achieving a deep understanding of the decision-makers and decision-making, we were unable to expand our reach and revenues. This required a strategic focus on the power and politics of C-level executives, not just on solutions.
During the account strategy session, I observed that the team kept reverting to a tactical cross-selling discussion around the services we should sell. When I attempted to level up the conversation to the role of power and politics, it became clear that the sole relationship was between the lead partner and the CFO.
In such situations, if the CFO is not interested in a particular service, there's nowhere to go. The way to avoid dead-ending is to also forge relationships with the owner, CEO, director, COO, CIO or others. That way, recommendations rejected by the CFO may still receive consideration.
Do this instead
Getting a handle on power and politics can be a heavy lift for many partners. However, in the corporate world, land-and-expand, as it is known, is a well-known approach. It is a systematic, focused means of growing larger accounts by strategically cultivating multiple C-level relationships, then matching needs to solutions by applying your knowledge of hidden agendas and influence among decision-makers.
It is managed by dedicated account executives who are paid — handsomely — based on the revenue growth in the account. They have a skill set much prized in the corporate world. Land-and-expand is considered the highest level of strategic solution-selling involving human motivation and interpersonal dynamics.
If hiring a dedicated professional to optimize revenue among strategic clients is not in the offing, it is possible to help an existing partner become a highly effective account executive by teaching strategic solution-selling skills and reducing their chargeable hour load to provide the needed capacity. The leverage is significant, as revenue can exponentially exceed an hourly billable rate.
Breaking down the wall
Account executives who are financially rewarded for driving large-client revenue are motivated to bring in others. This helps break down the wall of resistance among partners who consider clients "theirs." That proprietary thinking is the other big reason cross-selling has long been unsuccessful.
Partners who are highly protective of their relationships may question the ability of any other partner to do right by their client. The thinking is, basically, "No worries, I've got this."
In many firms today, it's often perceived by other partners that it's easier to seek out new clients than to crack the hard-headed nut, i.e., the partner who resists reaching beyond their comfort zone and experience to uncover opportunity. (The one who answers "No" to expanded services like wealth management, business valuation, international, tech or tax credits!) Account executives, on the other hand, see accounts as belonging to the firm, not to them.
Landing and expanding is a proven strategy that can help accounting firms deliver high-demand, profitable services. At a time when resources are scarce, it makes sense to identify clients that represent the highest potential for the most profitable firm revenue growth. Culling the bottom frees up resources, but cultivating the top is the way to the most efficient revenue growth!
