Four essential elements to service excellence

When I first started this  blog in 2006 I focused on topics drawn from or which were due to appear in my talks, mentoring and coaching programmes.

More recently I have been focusing more attention on the development of my Tax Advice Network.  It contains its own blog containing tax commentaries, ideas, insights and news. In recent months I have noted that the posts on this blog for ambitious accountants have covered a wider range of subjects. The focus is still on helping you to achieve success – in your practice, career and business endevaours. It’s just that now I allow a wider range of issues and experiences to inspire my posts.

This one came about after I was asked if I was the same Mark Lee who asserted that there were four essential elements to service excellence: consistency, attentiveness, recoverability and continuous evaluation.  Now this may confuse the search engines but that Mark Lee is a past President of Singapore Airlines. He is reported to have conducted an exhaustive study in the early 90s to determine the factors that determine success in the airline world.

It was he who concluded that there were four essential elements to service excellence in that world: consistency, attentiveness, recoverability and continuous evaluation.

Before I share my views as to what might constitute service excellence in our world of accountancy and tax, let me ask for your suggestions.  Remember, as I have stressed in previous posts on this blog – what counts are what clients perceive in terms of the services we provide.


Categorising your clients

Last Friday I wrote about how you might identify your most valuable clients. Prior to that I’d written about the factors that might mean a client was on your D-list and should be ditched.

If we assume that your most valuable clients are on your A-list and your worst clients are on your D-list, what about those in between?

Firstly, let me stress that it’s much more useful to identify the:

  • A-list clients – as they’re making a a major contribution to your practice and you want to ensure this continues; and the
  • D-list clients – as they’re the ones that are dragging you down, consuming resources and preventing you from enjoying your work as much as you could do.

In each case, it is likely that no more than 20% of your clients fall into each category – possibly less.

Only when you’ve done this is it worth spending time distinguishing the remainder of your clients.  My suggestion for this distinction is as follows:

  • B-List – those clients who are not on your A-list but who have the potential to get there. Maybe they own smaller growing businesses or they have the potential to make valuable introductions (but you have yet to ask them to do this).
  • C-list – those clients that are no trouble but who are unlikely to ever pay higher value fees, make valuable introductions or otherwise make it onto your A-list.

Some people might suggest that your B-list clients are the second most important group of clients in the firm, as they have potential.  This may be the case but I tend to think that once you get beyond identifying the A-list and D-list clients you can get caught up in the ‘analysis paralysis’ loop. It’s really only worth completing the analysis if you are going to do something useful with the outputs. In my experience it takes enough time to identify and agree on the A-list and D-list clients. And to then take the necessary actions that follow from so doing.

Still, now you know about B-lists and C-lists too.  Do you think it’s worth spending time to distinguish these?


How do you KNOW who are your most valuable clients?

I’ve commented before about how elements from this blog make their way into my talks and vice versa.  One key issue that I address in my talks about making more profits from your smaller clients is the need to distinguish your best clients from your worst clients. I’ve mentioned the 80:20 rule, the benefits of ditching the duff d-list clients that drag you down and I’ve suggested criteria that might help you to identify your worst clients.

What I realise I haven’t done is to address (in this blog) the converse: Identifying your best clients. In my talks I explain that different people will have different criteria for determining which are their best or most valuable clients.

The most obvious factor MIGHT be the level of fees charged each year. But is that the only way you assess the relative value or importance of your clients? It may be. When I ask audiences however they suggest a range of other factors including – how much they like working with the client, how interesting and varied is the work, the extent to which the client effects valuable introductions, how reasonable the client is, whether they seek and take advice, respond promptly, pay on time and so on.

There is one factor that is rarely raised and yet it may be the most important of all.  How profitable are those ‘best’ clients? Indeed, how many accountants have the systems in place that would enable them to determine the answer to this question?

I remember some years ago trying to find out who were the most important clients of the Tax Support for Professionals team in a large tax consultancy.  When I asked the team they identified a number of key clients. Or so they thought. These were clients who were in regular contact, often on the phone and certainly who were front of mind.  The consultants were happy dealing with those clients but had no idea if they paid on time or the aggregate fees earned from such clients.

A little research revealed that ALL of the named clients were amongst the least profitable ones for the consultancy. They regularly made use of a low cost service facility but didn’t use the firm for any high value work. They consumed our resources and cost us money that was not matched by the fees we earned from those same clients. In effect they were exploiting our loss leader service proposition.

Were they our ‘best’ or most valuable clients? No.  They were either B-list or C-list clients. I’ll explain this distinction in a subsequent post.

Some firms are able to identify their most important clients by reference to the information in their  Customer Relationship Management (CRM) system. Others have a gut feel. Whatever works for you is fine. But do make sure that you are not fooling yourself.  Clients who are front of mind may not be the most profitable or indeed the most valuable.

How do you know who are your most valuable clients?


How important is it to ensure that your workforce is motivated?

As some readers of this blog may know I spent 4 very happy years as a tax partner at BDO Stoy Hayward (1997-2001). I still rate the firm highly and have admired their continued development in recent years – with Jeremy Newman as managing partner*

He has now stood down from that role and was interviewed recently for Accountancy Age TV. As a supportive alumnus of the firm I was keen to watch this. Inevitably Jeremy was asked about the highlights of his period of office. He then explained why his answer referred to when BDO Stoy Hayward first won the Accountancy Age Employer of the award in 2004. They have since won it in 2005 and 2007 as well.

In listening to Jeremy talk about the importance of the award I was reminded of a speech given by Richard Branson in 2005. He challenged the almost ubiquitous presumption, attributed to Mahatma Gandhi that

A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work, he is the purpose of it. He is not an outsider to our business, he is a part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.

Sir Richard said happy employees keep customers happy. A lot of happy customers would create a lot of happiness to shareholders as well. Without good people, corporations are worth nothing. And to motivate people, corporations should create a fun environment to work. Employees should feel that it is a crusade, not just another job.

In effect Jeremy was sharing a similar view. And it’s one with which I agree. I’d put it like this:

If the staff, managers and indeed partners in an accountancy firm are happy and motivated they will focus on providing excellent service to clients. Satisfied (or even ‘delighted’) clients will be less fee resistant, will recommend and refer the firm to other worthwhile clients and in time the firm will be more profitable. Another benefit of this approach is that the key people will be less tempted to move to other firms so the workforce is more stable and that also helps maintain profit levels.

Do you agree? How important is it to ensure that your workforce is motivated?

* for the avoidance of doubt – no I am not looking to go back! I prefer the independence of my current approach. This involves developing and promoting my Tax Advice Network, public speaking, committee work and a little non-exec/consulting on the side. I realised I’m an entrepreneur at heart.


Avoid premature elaboration

Last year I referenced one of Richard White‘s ideas and adapted it to the accountancy environment. That post was titled: Do you suffer from premature evaluation?

More recently I’ve heard him use a similar phrase: “Avoid premature elaboration.”

It’s something that many of us may be guilty of when we’re networking or selling. It essentially describes the approach whereby you elaborate your service proposition and try to sell or close the prospect before you know enough about the person to whom you are speaking.

In essence Richard stresses the need to find out more about that other person  before you start elaborating. I’ve addressed similar points in different ways on this blog in the past:

What do your clients want? – This highlights the need to ask questions and to appreciate that what people want is not the same as what you’re selling;

People do business with people they know, like and trust – This reminds us that you shouldn’t try to sell your services too soon;

What sort of person makes a good ‘finder’? – This explains that often it’s the quieter people who find and gain the most new clients (becuase they tend to be better listeners).

Does this make sense to you? Can you think of examples of when you’ve encountered ‘premature elaboration’ or have you even done this yourself?

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If you would like to book me to speak on the subject at your in-house conference or training session, do get in touch. There’s an outline of my talk on ‘How to ensure your networking activity is successful’ here>>>  


Accountants in Action

On Sunday I enjoyed another fabulous day out at the delightful Art in Action event at Waterperry Gardens (near Oxford).  It’s an annual event and my wife and I tend to go most years.

Art in Action was created out of a simple observation: people are fascinated when artists and craftsmen openly demonstrate their skills and discuss their work.

Accountants of course can’t do the same thing – although I can imagine a comedy sketch where different marquees contain a selection of different professional people all showing visitors how they craft their skill:

  • Accountants in one tent showing how to apply deep brush strokes to create a great set of accounts from a simple trial balance;
  • Bookkeepers in another showing how a bag of rubbish can be made to look like an analysed cashbook;
  • Tax advisers in a third showing how graceful can be the transference of information from accounts to tax returns and how much can be lost on the way; and finally
  • Auditors in a fourth tent, showing how to find gaps and mistakes through a detailed review of a set of accounts and books.

Back to reality however, can accountants ever show prospective clients what they can expect? Would it help if they could?

I’ve commented before about how some accountants are able to evidence and promote REAL distinctive differences that could help prospective clients to choose them as opposed to another accountant who seems no different to all the others.

Would it be possible (or helpful) to go beyond those sort of marketing messages and to SHOW prospective clients how different you are? Here are some ideas to start you off. Please add your own as comments on this post:

  • Copies of your regular newsletter (that’s the obvious one of course);
  • Printed copies of your email newsletter;
  • A sample copy of an agenda for a tax return review meeting or an accounts review meeting – showing that it includes some tax planning topics too;
  • A sample set of accounts together with explanatory notes and helpful tips – ie something useful, commercial and constructive. Make clear that your clients have told you that they didn’t get this level of service from their previous accountants. Although it’s second nature to you, it seems that not everyone else does it;
  • Your year end tax planning tips – especially if they are tailored to different client sectors and so appear to be more relevant and specialist than a generic list;

What else can you think of that might make a difference and that would get close to showing ‘Accountants in Action’?!

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How far do you go?

This was another of the thoughts I had during the workshop that followed an E-business for accountants seminar that I attended. (I’ve already commented on the seminar here and here).

One of the workshop leaders was suggesting that accountants should be more prepared to ‘upskill’ their clients as regards their e-business strategy. I asked whether he meant:

  • To be better able to talk to clients knowledgeably about e-business related subjects and to be able to introduce specialists to help the client with their issues; or
  • To be able to provide billable advice as regards e-business related issues (as distinct from the conventional services that accountants provide).

The point being that accountants want to be provide value to their clients and to be paid for the provision of valuable advice. Some might alternatively say they want to be paid for the time they spend providing valuable advice.

I’m not sure that the speaker had considered the distinction before I explained it. The seminar had been promoted as “a chance to acquire new skills that enable you to advise your clients on their e-business strategy.”

In replying to my question however the speaker made clear that he was referring to the first of those options. That made sense to me – although it was a big step down from the alleged objective for the seminar.

The speaker’s worthy aim was refined as encouraging accountants to assist their clients with e-business related issues and introduce relevant reputable specialists. This makes more sense to me than trying to ensure that accountants are able to provide valuable advice on such matters themselves.

I tend to think that a little knowledge can be a dangerous thing. This is just as relevant in the fast evolving world of e-business as it is in the world of tax which I know so well. (And I recently explained the reasons why I gave up giving tax advice).

I’ve learned a fair amount about many aspects of e-business over the last couple of years – from web marketing to search engine optimisation to the differences between effective website design and website development. And so much more. I’ve put much of this knowledge to good effect in my Tax Advice Network but I know my limitations and take advice from experts – not amateurs.

Still, accountants are often revered for their all round business knowledge. Revered and respected. That puts them in a powerful position and it’s one of the reasons why plenty of those e-business experts want to work with accountants. They believe that you are well placed to make trusted introductions to your clients.

On the tax front it was for similar reasons that I chose accountants as the main target audience for my Tax Advice Network. I know that good accountants know what they don’t know. They are aware of the dangers of going beyond their levels of competence when advising clients on unusual or complex tax issues. And they want to involve trusted, vetted, recommended, commercial and often local tax experts. That’s what we’re all about of course.

Going back to that distinction I drew at the start of this posting. How far do you go?

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Is it worth attending training seminars?

I had an interesting revelation during the E-business for accountants seminar I attended in Birmingham on Tuesday. I realised I was being inspired to make notes (as I tend to do) as and when the speakers said anything that I felt was useful. So quite a lot of notes then!

I have often held off attending seminars if I felt that I could read much the same information in a book, on a blog or by researching the topic on line. And, of itself, that’s probably right. However there’s something about being present and listening to a speaker that makes my brain work slightly differently. Maybe it’s connected to my love of live theatre and other forms of live entertainment.

So, what was the revelation? Quite simply that I get more ideas and more inspiration when I’m listening to speakers than when I read material in a book or on the web. With due respect to the speakers on Tuesday it was more what they were talking about, rather than their presentations or even their content that set my mind racing. My sub concious seemed to adapt what I was hearing and made it directly relevant to this blog and to my Tax Advice Network. Yes, some of the points made by the speakers were also directly relevant – but no more so than if I had read the same points on a website on a blog or in a book.

Note to self: Attend more seminars. Don’t assume that I can get all the information I need from books and the web. Although that is probably the case I will be more inspired when listening to a speaker and this will generate more good actionable ideas than simply passive reading.

What about you?


Balancing the rights of taxpayers with HMRCs powers

I was delighted to be able to attend the ICAEW Tax Faculty’s annual Wyman debate last week.

The motion under debate was:

This House believes that the balance between the rights of the citizen and the powers of the taxing authority has tilted too far towards HMRC

Speakers for the motion were Francesca Lagerberg and Keith Gordon. Against were Simon Norris and Mark Neale. You can read a summary report of the event here.

There were two elements of the debate that struck me as worthy of mentioning on this blog:

1 – One of the speakers had no notes. None at all. Mark Neale (MD of the Treasury directorate for Budget, Tax and Welfare) started with a couple of references to the previous speaker and I expected him to then look down at his notes. But he didn’t because he had none. He didn’t need any. He spoke eloquently, without hesitation, repetition or deviation(!). He kept to his subject and to his time slot. His presentation was clearly well prepared. Even though I do not share his perspective I sat in awe as I listened to him. I was till in shock after he finished. He is evidently extremely experienced in putting his point across and had a complete command of his subject.

  • How confident would you be if you had to speak without notes on such an occasion? I get pretty good feedback for my talks and presentations but I would rarely be comfortable going out to speak without ANY notes at all – and I’ve been speaking professionally for over 15 years.

2 – By the time Simon Norris stood up (as the fourth speaker) I was feeling sorry for him. Francesca and Keith had made their points with conviction. Whilst Mark Neale had spoken well (see above) his views did not impact my take on the main proposition. I was expecting Simon’s position to be equally unconvincing.

Then he explained that the new system and the new laws would contain MORE safeguards than are in place at the moment. This point also came out further in the subsequent discussion.

I wasn’t the only person to suddenly realise that the debate proposition contained the wrong tense. The balance has not yet tilted too far – it is simply in danger of tilting too far in the near future.

  • A key lesson here, if you are organising a debate – consider carefully the tenses used in the proposition. The Tax Faculty may have had no choice here so as to give HMRC a chance to win the debate. As it was the final voting figures were:

Those for the motion – 67%

Those against – 21%

Those abstaining – 12%


Could you audit a client's website analytics?

I was delighted to attend yesterday’s seminar: E-business for accountants. It was co-ordinated jointly between the National B2B Centre and AccountingWEB and was promoted as being the start of a campaign to improve accountancy’s ebusiness expertise.

I tend to try to address discrete points in each of my blog posts so I’ll simply flag up one of the many interesting suggestions that I heard at the seminar. It was that accountants are ideally placed to report on their clients’ website analytics.

I found this an intriguing idea – possibly a little ahead of it’s time but entirely logical. Traditionally accountants have focused their attention on auditing the financial numbers and reporting on what the financial accounts really mean. The leap to reviewing website analytics may not be an obvious one but it could certainly prove to be a valuable service.

I use a free analytics program to monitor website traffic at Tax Advice Network. I know the program is not perfect but my focus is on the trends rather than the absolute numbers. I have a fair understanding of what the program can do for me and I monitor and compare the data every week. I’m aware however that I’m not making full use of all the investigative and reporting tools within the program. And I’m fairly web savvy.

What chance the average client – especially those who are reliant on their websites to promote and sell their wares? The website developers may offer a related service as might those who consider themselves to be experts in Search Engine Optimisation (SEO). But are any of them trusted as much as the accountant? And who has the training to review, audit, interpret and explain the meaning of loads of numbers?

As I say – an intriguing idea. What do you think?

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