Welcome back to Count Me In,

IMA's podcast about all things affecting
the accounting and finance world.

I'm your host, Adam Larson. And
this is episode 164 of our series.

Today's featured guest
is Gordon Van Wechel.

Gordon is president of the
Alchemy Consulting Group.

He is a business marketing strategist
and he helps firms recognize the true

business value, grow their business,

and provide strategic
support to professionals in
business. In this episode,

he talks with Mitch about the value of
working with an agency and the benefits

that come from proper advertising.

Keep listening as we head
over to the conversation now.

So Gordon, thank you again
for joining us. And, you know,

I just want to start off our
conversation by asking, in your opinion,

your experiences does a professional
practice need to have an

agency working for them?

Well, at the risk of sounding a
little bit, self-serving Mitchell,

because I do run an agency.

I'll answer the question with a yes.

But let me give you some
reasons why I say that.

There's such a multitude of
marketing channels available today.

If you think back just 15 years ago,
you know, a practice had, you know,

the yellow pages, they worked off of
referrals. Google was in its infancy,

YouTube hadn't been invented, social
media, wasn't a factor, you know,

they could do radio and TV, but there
just wasn't that much to choose from.

So it was relatively easy to get the
word out. That's changed today. I mean,

it would be easy for you and I in two
or three minutes to come up with 50

different effective marketing
channels that a professional practice

can use and, and be effective.

Now a lot of times when I speak with
professional practice owners, they'll say,

well, you know, my
business is referral based,

so I don't really need
to do any advertising.

What they don't realize is that there
are multiple surveys out there that

say that between 85 and 90% of the
people who are referred to a business

will first go online and
they're looking for two things.

They're looking for the company's website,

because that kind of proves
that they're legitimate and,

and they want to look at that about us
page and see who they might be dealing

with so they select that company.

But the other thing they're
looking at is the reviews.

That social proof has become
critically important in the mind of

a prospect because they want to know
that the vendor they're considering is

doing an excellent job with their
current client and is likely to do an

excellent job with them. Well,
putting all of that together,

managing `that diversity of
channels and keeping up with the

testing,

knowing where their prospects are going
for information updating of campaigns,

you can't legitimately run a practice
plus do all of that. So for those reasons,

I think that having an agency
is important even for a smaller,

professional practice.

But the caveat to that is to find an
agency that understands your business

and that's willing to work with you
where you're at with the budget that you

have available at this
time and grow with you.

So I think you've probably already
addressed two of the answers or possible

answers to my next
question. But you mentioned,

relying on referrals and then
potentially budget concerns,

my next question is what are some
of the biggest mistakes that you see

professional practices make for those
that do pursue some form of marketing?

You know,

what are some of the obstacles
or challenges that you
find to be most familiar?

Sure.

I think one is not having a really
clearly stated value proposition in

their advertising. You know,

the value proposition is why should I
choose you versus the multitude of other

firms that are available to
me in the local marketplace?

Something that we enjoy doing with
a new client or even a prospect is

we'll have them open up their website
and take a screenshot of the homepage,

the portion that's above the fold,

that a prospect can see when
they open up the website,

take a picture of that and print it out
and then do the same thing with four or

five or six of their competitors.

And what they'll be surprised to see is
how similar all of those websites are.

You know, they all
promise the same things.

They all use the same
platitudes and generalities.

Many times the only difference between
those pages is the phone number.

And if that's the case,

then what your prospect is left with
is the impression that everybody is the

same. And if everybody's the same,

all that prospect's going to be concerned
about is who is going to give me the

service for the cheapest
price. And, that's a war that
I don't want to get into.

And I don't think many business owners do.

Nobody wants to be in
the race to the bottom.

So not having that clearly stated
value proposition and in today's

marketplace,

the absolutely most effective way
to state that is in a little short,

60 to 75 second video of the
business owner looking right into

the camera and saying, here's
who I am. Here's who my firm is.

Here's what we do. And here's why you
should consider using us. And just 1, 2,

3 bullet points, you know,

whatever that value proposition is and
state it as clearly and succinctly as

possible and literally
in 60 to 75 seconds.

Any longer than that and
people aren't going to listen.

So taking that a step further,

what is the most overlooked marketing
channel professional practices could be

using more effectively based
on what you just shared,

it feels like potentially a lot of
practices are very interested in the

social media, maybe? Maybe their
website is their go-to, you know,

from your experience,

what kind of gets overlooked and
really should be focused on better?

Well, let's assume that
a firm has a decent,

basic website in place and it doesn't
have to be a 10 or $12,000 major

investment. It's got to be
something that, as I just said,

states their value proposition clearly
and gives a person some insight into

what the firm stands for and
who some of the people are.

Assuming that's in place and they have
a Google business page that's in place

and optimized that's the foundation.

The next most overlooked
step is retargeting.

Now retargeting is a
form of paid advertising.

If you're not familiar with that term,
you've certainly experienced retargeting.

If you've ever shopped
on eBay or Amazon or,

really most any of the major retail
websites anymore, you look at a product,

but you don't buy it. You see ads for
that product for the next week or 10 days.

Well, you've been retargeted. Retargeting,

I like to tell our clients is the
single most powerful advertising you can

do because it makes all of your
other advertising more effective.

And if you think about it
for a minute, most of us,

when we do marketing for our company,

we're trying to drive traffic to that
website. That's our 24/7 salesperson.

But when people visit that website,
Google will tell us that 96% of the time,

they don't take an action. They don't
fill out a form. They don't click to call.

If you have those links on your site,
they don't pick up the phone and call.

They leave. Well with retargeting,
you can keep your brand,

your business name in front of them
for a period of time, a week, 10 days,

two weeks,

however long the normal person takes
to make a decision for your product or

service. So retargeting
is critical. Related

to retargeting are banner ads.

Now banner ads are similar to
retargeting ads. They look the same.

They're ads that you see on websites,

but with the sensory economy
that we live in today,

we can really very finely hone
in on target markets with those

ads. And I was doing a presentation a
couple of weeks, a live presentation.

And I joked with the audience that if
they wanted to target housewives between

the ages of 35 and 45 with two
children at home who drove a Volvo

and ate Yoplait yogurt,

I could put them in front of
that audience in their town.

That's how precisely we can
target things these days.

So for a professional practice that
understands who their customers are,

we can very easily expose their
brand to those customers and

prospects through, banner ad campaigns.

And then the other aspect of
paid advertising is Google ads.

And a lot of firms have had
a bad experience with that,

but that's because of the
complexity of Google ads. And that,

again goes back to your
first question Mitchell.

If somebody's going to launch down that
path of spending money with Google,

they really want to have an experienced
agency managing that for them.

But I think the most overlooked
marketing channels are paid ads.

A lot of companies will jump into search
and to optimization and I'm not going

to minimize the importance of that. But
the reality is that's a long term play.

You can spend a lot of money over
eight to 12 months to get some of your

keywords, highly ranked on Google.

And a lot of firms don't want to spend
the money and not get the more immediate

ROI. Well, this paid advertising campaigns
will give them that immediate ROI.

Now, obviously this is paid advertising.

So we're looking for the firm to spend
some kind of money with an agency to get

the name out there.

You also mentioned just recently that
one of the bigger mistakes that some

businesses make is potentially
going out of budget or, you know,

not spending money in the right
place with the right agency or such.

So when it comes to firms and
a lot of our listeners work for

those smaller businesses that you
were discussing earlier, you know,

what would be an appropriate
practice for spending on advertising?

You know, a lot of agencies will
tell you spend as much as you can,

or they'll come up with
some trite phrases as well.

If you spend a hundred dollars
and get $110 in return on it,

that was a good spend. Well, that
makes no sense at all. You know,

that doesn't cover your cost of goods
or your labor, your operating overhead.

What we consult with our clients is
to first understand what's the average

transaction value in your company.
And just a very simple example,

let's say you prepare
tax returns for $500.

Now that's low for a business return, I
understand, but just as a round number,

let's say you prepare a tax return for
$500 and you keep a client on an average

for five years. So that's $500
a year, times, five years,

that's $2,500.

So the lifetime value of a client
in your practice then is $2,500.

So the advertising budget question
is how much are you willing to spend

to acquire a $2,500 client?

And frequently firms will
spend more than the initial

transaction value to acquire that
client because they know that

the average is $2,500.

Now I've had people throw
up their arms and say, oh,

but we don't keep everybody for
five years. And that's true,

but you also keep some for more than
five years, we're talking averages here.

And the $500 example is overly
simplified because most companies,

multiple tiers of services
and products that they offer.

So you have to figure out what your
average transaction value is in each of

those tiers and, and judge it accordingly,

but to calculate your budget, you want
to really understand those numbers.

And then you,

as a business owner have to determine
how much are you willing to spend to

acquire that new customer. But here's a
rule that we found to be true. I mean,

in the 18 years we've been in business
and I think it's true across every market

niche, you know, finance and
accounting, home improvement, trades,

medical practices,

the company that can spend the most
to acquire a new customer will win the

market share battle every time.
And the only way, you know,

what you can spend is to really understand
that transaction value and lifetime

value of the customer.

Now that makes a lot of sense.
And the example you shared well,

maybe oversimplified certainly
makes it very easy to,

translate to whatever the business
is that our listeners are working in.

As I said, you know, we focus on
finance and accounting professionals.

We have a lot of small business
listeners. We also have those who,

if they're in business on their own
or aspire to be entrepreneurs and in

business on their own, a big part
of that is kind of, you know,

taking one project and then going on
to something else down the road. Right?

So I think a big question is
if I'm running my own business,

I'm focusing on my own
marketing, so on and so forth,

but this is not my
lifelong play. You know,

I have some aspirations of potentially
moving on to something else.

What should I be doing today?

What kind of consideration should I
have short term or long term for the,

you know,

the sustainability of the business as it
is now getting ready to move on to the

next phase of my own business?

Yeah. I think all of us start businesses
do so with the ultimate idea that we're

probably going to sell it, you know,

we're going to fund our retirement or
our kids' education or whatever, or,

we're just entrepreneurs and we want
to do something different in life.

And what we see in the alchemy
transition side of our business,

where we help business owners prepare
their businesses for sale is one

consistent fact is as business owners,
we tend to use a rear view mirror.

We look back with understandable pride
on all of the things that we've created,

the people that we've developed and
the market that we've developed,

all of the things that we've
done to make our company,

the profitable enterprise that it is.

But a buyer doesn't care about that.

A buyer is looking at what's the future
cash flow of this business if I own

it. And what's my ROI going to be based
on the amount I spend to acquire it.

So when we consult with business owners
who are thinking about transitioning

their business in the
next three to 10 years,

we have eight different value drivers
that we use to help them prepare that

business for sale. Let me just
summarize a couple of them. You know,

one is recurring revenue.

Recurring revenue is not
the same as repeat business.

Recurring revenue is where you have
people that have committed to paying

something every month or every
quarter for your services.

I'll give you an example.

We are working with a CPA firm
who has a focus on a niche

with real estate professionals
and real estate investors.

And so what we've done is helped
them create three tiers of support

for those customers,

depending upon how many
investment properties they
own and how much consultation

they need during the year
in terms of tax planning.

So there's three different
tiers of support,

three different monthly
payment plans. Well,

what that's done is converted a lot of
their regular customers over to those

monthly plans because they want that
increased level of support. It's not just,

here's my paperwork. Please
repair my taxes. It's,

okay I'm buying these next
three properties. How do
I need to structure them?

I'm selling four properties this year.

How are we going to make sure we
don't have to overpay on taxes?

So by creating those tiers of support,

it has created a much more sustainable
relationship with those clients.

And in turn created, an increased
value to their practice.

Hub And Spoke is another tool that we use.

Most businesses tend to
revolve around the owner.

The owners are involved in all the hiring
decisions, they're involved in sales,

they're involved in most of the customer
transactions that they're the hub and

the rest of the firm are the spokes
of the wheel of their business.

The rule of thumb we use that is if you,

as the owner know more than 15%
of your clients by first name,

you would recognize them if you were
at the grocery store and you would call

them by first name. That's not a good
sign from an acquirer's point of view.

The reason being that,

that means there's a lot of customer
loyalty to you as the business owner.

And that may bode well for me
as the acquirer, it may not.

I know when I'm gonna
acquire a financial practice,

I'm probably going to lose 20 to 25% of
the clients, or at least statistically,

that seems to be the norm.

But the more I can show that the
current owner isn't the focal point

for those clients, then that relationship
isn't the strength of the firm.

The better my opportunity is to enhance
my return on acquiring that firm and

therefore the more I'm
willing to offer for it.

So the focus of that part of our
business is helping practice owners

understand how their business is going
to be viewed from an acquiring company or

individual,

and try to set it up to be the most
appealing to that person as possible.

Very interesting. And, considering
that dynamic of a business,

it would make sense that you would
like to see the operations and the

organizational

core values translate across the
organization, right. Not just be,

personified by one individual.
So thank you for sharing that.

I do have one question as a follow
up to kind of wrap things up again,

gearing back towards our listeners
in finance and accounting.

I know you said you do work with
a number of firms in that space.

I'm just curious what you kind
of envision as far as how finance

and accounting firms specifically can
differentiate themselves, you know,

going back to what you said earlier
on, some successful practices,

best practices,

things like that for our listeners who
may be looking to utilize some marketing

to get, an extra step
up on their competition.

Sure. Well, one is to identify a
niche where you have expertise.

I just used an example of a CPA firm
that had a lot of experience working with

real estate investors and
real estate professionals.

When we started with them,

they had a generic website that
didn't say anything about that,

even though a good percentage of
their clientele were in those niches.

We wound up creating a completely separate
website and doing marketing directly

at those niches and they saw a
25% increase in firm revenue,

the first year as a result
of focusing on that niche.

So I think for a lot of firms,

they have areas that they either enjoy
working or have specialized expertise in.

Maybe it's it's nonprofits,

maybe it's building trades and
doing job cost accounting. I mean,

maybe it's retail,

but really focus on what your
expertise is and then identify

markets that you can enhance. That you
can go penetrate with that expertise.

Another thing that you can do is
consistent follow up with your clients.

Most firms work really
hard, five months a year,

and then the rest of the year they're
finishing up some business returns.

They're are not following up
consistently with our clients and really

involving them in tax planning.

They're not becoming the
valued professional resource
for their business clients

that they could. And I think
when they start to do that,

they increase the relationship as well
as the revenue from their current current

client base.

But they also generate a lot of additional
revenue because they're providing

that extra value add.

So those are two things that come to mind
that a practice can do immediately and

that's even a small practice.

This has been Count Me In,

IMA's podcast providing you with the
latest perspectives about leaders from the

accounting and finance profession.
If you like what you heard,

and you'd like to be counted in for
more relevant accounting and finance

education, visit IMA's
website at www.imanet.org.