What are your firm’s revenue growth targets for the next 12 months? Do you have a formal plan in place to identify opportunities to service existing clients better and attract new clients? Most importantly, who will be responsible for new business development activities?
As firms take on a stronger advisory focus, a reactive approach to revenue growth is no longer enough. There needs to be a stronger focus on encouraging all staff with client relationship management responsibility to identify and follow-up business development opportunities.
The following 7-step process is recommended for any accounting and advisory firm looking to take more control over their revenue growth goals.
Step 1 – Establish goals for revenue growth
Without specific goals for real growth (not just increasing fees), it’s likely that all you will achieve in the next year is what you have achieved in the past. Set a revenue growth target of at least 10% for the firm. Progressive firms may consider a revenue growth target of 20% if they are already achieving growth levels of around 10%.
Step 2 – Agree on the criteria for revenue growth
To make this implementation process meaningful, the criterion for revenue growth needs to be clear. I recommend that for revenue to be considered as ‘new business,’ it should come from new services to existing clients or new clients. In addition, there should be a separate documented service agreement with the client.
Step 3 – Establish responsibilities for revenue growth
Identify where the growth is going to come from. Ideally, any partner or manager with client relationship responsibility should share in this growth target based on the fees for which they are currently responsible. For example, a partner with $600,000 in existing fees may have a new revenue target of $120,000 based on the firm’s 20% growth target.
Step 4 – Provide incentives for managers and partners to achieve their revenue growth targets
For a manager aspiring to partnership or a partner aspiring to a leadership role within the firm, revenue growth should form an integral part of a ‘balanced scorecard approach to performance goals. An incentive program based on a percentage of the fee could also be considered.
Step 5 – Set up an internal process for managing the status of all new business development leads, either external or internal
Your firm needs a system for tracking the progress of any opportunity identified with existing or prospective clients. Ideally incorporate this ‘sales pipeline’ as a part of your firm’s existing CRM platform. Establish milestones for each opportunity e.g. Opportunity, Lead, Proposal, Sale.
Step 6 – Commence a monthly reporting process so that status of leads can be reviewed
A monthly reporting process needs to be in place to review the number, value and status of all opportunities, by manager or partner. Some staff will be more proactive in driving this initially, but with a strong ongoing focus, it will develop momentum. Share individual results as well as different approaches to getting new business ‘across the line.’
Step 7 – Establish guidelines in relation to internal cross-referral relationships
If you work within a multidisciplinary firm, it’s likely that managers and partners will be collaborating with internal colleagues with special interests relevant to their clients. It’s appropriate that the revenue gain from internal referrals should be shared. Consider a 50/50 split of new revenue when two colleagues work together to get a client (or prospect) across the line.
□ Establish goals for revenue growth
□ Agree on the criteria for revenue growth
□ Establish responsibilities for revenue growth
□ Provide incentives for managers and partners to achieve their revenue growth targets
□ Set up an internal process for managing the status of all new leads, external or internal
□ Commence a monthly reporting process so that status of leads can be reviewed
□ Establish guidelines in relation to internal cross-referral relationships
TO LEARN MORE
If you’d like to learn more about how to implement a revenue growth project that will work for your firm, click here for details of our latest eLearning course ‘Build your fee base – A guide to fee growth for managers and partners.’