Four Reasons CPA's Can't Add New Clients

When I talk to CPAs about growing their strategic consulting book of business they often complain about not being able to add new clients. It is important for me to understand where this struggle comes from, because if you cannot add tax and accounting clients it will probably be difficult for you to add consulting clients. In the world of professional services the service may vary, but the rules of the game for business development are the same. 

Now, we all know that each of US is good enough, smart enough, and doggone it, people like us. But OTHER CPA's struggle to get clients. We all know one or two that we could pass this along to. So in the interest of helping our fellow brothers and sisters are four reasons they struggle so much. Pass it on.

You (I mean "They") Are Not Visible

This is by far the most common problem. Most CPAs fail to add new business because they have not developed a discipline of being visible. One of the easiest ways to add new business is to follow the 50-in-50 exercise. This is a commitment to have 50 coffee meetings in 50 days. You only need 5 to 10 contacts to get this process started. And the only criteria for these 5 to 10 people is that they are interesting. They don't have to be prospects. They don't have to be business owners. They don't have to be in any certain demographic. When you meet your only agenda is to learn more about them AND find some way to help the person you are meeting with.

Near the end of your time together be completely transparent. Explain your 50-in-50 commitment and ask if they know one or two interesting people that you should invite to coffee. If you follow this formula you can start with as few as five people and you will never run out of future coffee dates.

Even though YOU are not on the agenda, at some point the conversation will invariably turn to you and your business. This gives you a chance to briefly explain what you do and how you stand out. As the network of people you have helped grows, you will begin to receive referrals.

By far the fastest way to grow a network is person-to-person. It can be done online, but it takes longer. The context of real-world interactions and the plethora of information it provides about a person simply means that trust builds faster.

That said some of my best professional relationships started on Twitter, LinkedIn, Facebook, and good old-fashioned blogs and email. The online world makes it much more efficient to broaden your network, but to be effective that network also needs to be deep. There are plenty of CPAs who spend hours upon hours on LinkedIn, Facebook groups, and blog feeds who never add a single client through these methods. If you meet people online you will usually make the most progress by taking those conversations off-line at some point where one-on-one communication happens faster and includes all of the nonverbal queues we've been hardwired to expect.

Lack of Credibility

Let's say you have been getting out there, and you are religious about connecting with other people and helping them achieve their goals. The next area to examine is your credibility. If you do not come off as someone people can trust, if your interpersonal skills are lacking, or if you lack confidence in yourself you should not be surprised that others find it hard to give you their business or send you referrals.

This is most often the case with young CPAs just starting out, especially those who are running their own firms. They have no one to push them into uncomfortable situations where they will find out what they are made of, and gain the confidence they need. It is also common among seasoned professionals who are just starting their own firms. Being thrown into the unstructured world of firm ownership can be unnerving and overwhelming. Desperation can set in as the honeymoon wears off and weeks stretch into months without a new client. There is nothing less attractive to prospects than desperation.

When you are out in the world doing your best to be visible you need to look like someone people can trust. Your wardrobe might need an upgrade. Your old beater Corolla from college might need to be traded in. You might need to polish up your communication skills with Toastmasters or a Dale Carnegie course. Traditionally these are skills and factors that are taught or pointed out by managers and people you work with. But as technology has drastically lowered the barriers for starting one's own firm I see plenty of young professionals with these blind spots.

The same principles hold in the virtual world. If your aim is to add remote clients and your website looks like something from the CompuServe days that might be a problem. Virtual businesses need to represent themselves well on today's standard platforms like LinkedIn, Facebook, Twitter and on industry-specific sites where your prospects are going to do a search right after they read your brilliant guest blog post.

Take a hard look in the mirror, literally and virtually. Be honest with yourself and get some third party feedback from people who aren't afraid to hurt your feelings. Your business is too important to only hear the things you want to be told.

Lack of Relevance

Now let's say you not only have the visibility thing down, you also come across as credible and people love to accept your lunch invitations. But no one is sending you business. It is probably because you are not relevant. One of the worst things the CPA can do is attempt to be all things to all people. Over and over at practice development conferences CPAs are told they need to find a niche if they really want to grow and be successful. But this counterintuitive strategy of narrowing your potential market to expand your business development is mostly ignored.

The problem is this. In the world of professional services new business comes most often and most quickly through word-of-mouth referrals. This means that when a referral source is out there in the wild and they hear about a specific problem they need to know enough about you and your specific expertise so that your name is the one and only name that comes to mind at the very moment they are in a position to send you the best kind of prospect: one with a problem and a burning desire to solve it.

Last week a friend of mine asked me if I could recommend a CPA for her growing food wholesale business. I could not think of one, and I know dozens of local CPAs. But none of those CPAs has ever sat down with me over a cup of coffee and told me about their expertise with route salesman, delivery trucks, or wholesale food distributors. If any of those terms had ever been mentioned I would have had a name for her. But almost all of the CPAs that I know describe their services in broadly generalist terms.

I absolutely love the fact that Magen Smith specializes in the self storage industry, and that Jeremiah Kovacs and Jeff DeBolt specialize in Amazon resellers, and that Jason Blumer specializes in creatives, and that Alexis Kimbrough specializes in recording artists and that Chris Farmand serves microbrewers. These CPA and accounting firms are at the forefront of the industry and they are NOT having a problem adding new clients.

Step one in being relevant is to establish an area where you stand out and where your name is the first one that comes to the mind of anyone dealing with a problem even remotely connected to your area of expertise. Those who discipline themselves to constrain their activities to a specific niche find that adding new business costs less over time and takes up a smaller portion of their weekly schedule.

Lack of Competence

If you are doing all of these things and you still cannot add new business, stop! Really think about it, and be honest with yourself. Because the only other option is that you are incompetent.

If you are getting out there and people know you exist and they know what you do, and you have credibility, and you are relevant, and you still can't add business…then it is most likely because you are not very good at what you do. Word has gotten out about you and while the smile to your face no one will touch you with a ten foot pole.

This is hardly ever the case. The world is full of CPAs (and for that matter attorneys and doctors and engineers and architects and insurance professionals and investment advisors) who are not very good at what they do. It could be in the technical details or it could be a lack of service. But these folks tend to find a downmarket niche where people are willing to put up with incompetency for a good discount. Getting customers is not the problem. Charging them a premium price is the problem. But this article is not about pricing.

The reason incompetence is rarely the reason CPAs cannot add new clients is that if you are so bad people are spreading the word about your incompetence, it's highly unlikely you are still in business. But, there are ways to do it, whether it be staying afloat with a second job or relying on the income from a spouse. If this is you, wake up! Get serious about your craft and narrow your area of focus so that you can acquire a deep enough skill set to become competent.

I love running The Consulting CPA program. It is incredibly exciting to see CPAs learn the strategic consulting skill set and build a loyal customer base around it. But anytime a CPA tells me they've always had a hard time adding new clients we hit the brakes, hard! It's important to understand exactly why adding new business has been so difficult. Everyone has to file a tax return and if you've had a hard time making it in that business you need to go back and fix the root of the problem. 

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Overcoming Resistance with Clients

Last week I was trying to help a client solve a problem that I thought they wanted to solve. I say thought because I kept running into resistance every time I would try to get more information. In this article I want to deal with resistance from clients, what it means and how to overcome it.

Last week my conversation with the resistant client went something like this.

Me: "What is your average sales cycle (the amount of time to convert a prospect to a paying customer)?"

Client: "It's all over the map. Sometimes it's one day. Sometimes it's a year."

Me: "Well, what's the average? What is typical?"

Client: "It depends."

Me: "OK, what does the process look like. What is step 1 after you meet a prospect?"

Client: "Again, it depends. Some of them go straight to being a client. And others take a while."

At this point I really wanted to say "Well, no !@#$." I restrained myself. I kept digging and eventually we uncovered some information that was helpful. But the whole process was unnecessarily painful.

There are two things you can do in this situation. The first is tactical. It will help you get the information you need, but it does not address what is really going on. The second approach is strategic. It is less about getting the information, but it gets to the heart of why you are experiencing resistance in the first place.

The Tactical Approach: Explain the bell curve

If you just want to get to the answers and avoid the 800 pound gorilla in the room named Resistance just say something like this:

"I know the specific examples are all over the map. But what I'm looking for is the middle of the bell curve. If we plot all the information on a graph, statistics tells us that about 70% of the time we're going to get an answer in the middle of the bell curve.

There are always going to be outliers. The customers that sign up in one hour are outliers. The customers that take a year are outliers. Forget about them and let's talk about the middle of the bell curve."

Usually this jars the client loose and they start sharing good information you can use. At the very least it establishes a common language so that in the future you can say, "That's an outlier. We are going to ignore it."

But when it doesn't work, when it doesn't overcome the resistance you are going to be forced to punch that 800 pound gorilla in the nose.

The Strategic Approach: Address the Resistance

The bigger issue is why your client keeps pushing back in the first place. Presumably you are there to help and you can't do it without good information. They know what the good information is. They just don't want to share it. If the roles were reversed and someone gave them back their same answers they'd be furious. Kids pull this kind of stuff all the time.

Dad: "I thought I told you to wash the car."

Kid: "Oh, I didn't hear you. Sorry."

Your client might be pushing back for a couple of reasons.

Their ego might be getting in the way. This is essentially the idea that "I've tried solving this problem for the last year and I couldn't do it. I'm smarter than you, have more experience than you, am more qualified than you, so therefor it is a waste of time to regurgitate the facts so you can try in vain to solve it."

The ego problem is usually subconscious. Your client doesn't even recognize what is happening. Explaining the bell curve may help them realize "OK, this person is pretty bright. I am giving garbage answers. If I give good information we might actually make some headway."

Unfortunately, because it is subconscious you will run into the ego problem again and again. This usually happens with members of the leadership team, not the business owner. Some of our client's team members are like this and we just bake it into the way we relate to them. Eventually, they come to respect what we bring to the table and the resistance, subconscious or not, stops.

If resistance isn't coming from the ego another possibility is that you're not talking about the real problem. The real problem is something they don't want to talk about so instead your client is just trying to run out the clock on this decoy.

If you are getting the run around because the client doesn't want to talk about the real problem there's no easy way out. You can address it or you can let them waste everyone's time.

When you decide to punch the gorilla in the nose just try something like this:

"I get the sense that this problem is just a distraction to keep from talking about what is really going on. If this were the real problem we wouldn't be fighting so hard to get good information. You're pretty smart so there must be another problem we are avoiding."

When you are preparing tax returns and financial statements the client will readily defer to your technical expertise. But when you enter the more nuanced world of helping them with strategy and overcoming obstacles you will encounter resistance. They may or may not realize what they are doing. It's your job to help them overcome the resistance and move things forward. It's a big part of what they are paying you to do.

If you need more help building a strategic planning and consulting business inside your existing tax and accounting practice sign up for The Consulting CPA. It has everything you need to get started today.

How to Quote Consulting Work

Someone asked me, "How do I quote consulting work for clients?" That's a long answer, much longer than the time I had to answer it. But I was able to share three ideas that have made a world of difference for me. If you want more check out this book by Randy Illig and Mahan Khalsa. It's a game changer.

Rule #1: No guessing

Don't assume you know the budget. Ask. Don't guess the time frame is 30 days. Ask. Don't assume they have the money available to pay you. Ask. We make so many assumptions about what clients want us to do and what their goals are. And these assumptions get us into trouble. Refusing to guess does slow down the process. It requires more conversation (not email) between you and the client. But it builds trust and it sets you apart from other professionals.

Rule #2: Slow down for yellow lights

This one is hard. Our tendency (on the road and when dealing with possible projects) is to speed up and just get through it. If the prospect keeps jumping all over the place and can't decide what they want then slow down and ask if you can narrow the scope or expand the budget. If you find out the decision maker is going to be out of town slow down and reschedule the presentation. If you can't get information when you ask for it slow down and find out if this is going to be a problem when you are working together on a big project. Don't speed up. Slow down. It's much faster in the long run.

Rule #3: DELIVER proposals

This is the BIGGEST mistake I see CPA's making. If a prospect or client wants you to email your proposal, politely REFUSE and suggest another option. CPA's balk at this and make all kinds of excuses, but these excuses are driven by fear, not legitimate concerns from the client. There are several options available. The telephone turns 141 years of age this week. Eighty year-old great grandparents are using Skype and FaceTime everyday without a hitch. If it's not feasible to meet face-to-face there are other options.

There is no substitute for a real time conversation. In about 50% of my proposals we end up making changes during the meeting that INCREASE our role and result in even more profitable projects for us. That will not happen if you email your PowerPoint or price quote. AND your refusal to play the email game will make you stand out from your competitors. It will build trust and assure clients that you know what you are doing.

I would encourage you to pick up a copy of Khalsa and Illig's book, Let's Get Real or Let's Not Play. It is very practical. If you don't mind some vintage video I did a presentation for my clients YEARS ago, and you can view the recording here.

Your Client's are Terrible Goal Setters

Our clients are terrible goal setters. Most don't set goals. Those that do don't write them down. If they write them down they don't look at them. And if they look at them they have no way of knowing objectively whether the goal has been accomplished.

We talked last week about the four questions you should be asking your clients to convert them to consulting customers. Goals was one of those questions. As you begin to talk about goals with your clients you will find out how good or terrible they are at setting them. You can provide incredible value and create customers for life if you teach your clients how to set and use goals effectively.

The first step is getting them to limit their focus to just two or maybe three areas. Plenty of research has shown that people who set fewer goals are more likely to accomplish them. This also has the effect of forcing your clients to prioritize their activities. By limiting them to just to or three goals you are essentially forcing them to decide ahead of time what activities and areas will take a back seat.

Step two is getting the goal in a good format. This means writing it down according to the following formula:

From X to Y by when.

If the goal doesn't fit this formula I typically don't let clients off the hook until they can make it fit. Here are some examples of goals I have helped clients set.

  • To go from $3.6 million in revenue to $4.2 million in revenue by the end of the year.
  • To increase market share from 12.5% to 18% by December 31, 2018.
  • To increase new sales per salesperson from $900,000 to $1.5 million by December 31, 2017.
  • To increase retention from 81.5% to 83.5% by December 31, 2017.

There are some goals that will still qualify for this formula even though they do not strictly fit the "from X to Y" portion. Examples of these might be:

  • To publish our first book by the end of the year.
  • To hire a new general manager by June 30, 2017.
  • To have every employee complete a written, comprehensive training program by the end of the year.
  • To find and move into a new facility by the end of the year.

Even though these goals do not fit the strict formula it is easy to see how they are all objectively measurable and have a deadline. Objective versus subjective measurability is incredibly important. The outside world should be able to evaluate the data or ask a couple of questions and determine whether or not you have hit the goal. It should NOT be up to your subjective evaluation to say whether you have reached the finish line or not.

Step three is reviewing the goal on a regular basis. Personally I don't think you can do this too often. I like to review my goals once in the morning and once in the afternoon. They are always top of mind. When I sit down to think about my priorities for the week I have reviewed my goals 14 times during the past seven days. You can bet I will be thinking about them when I decide where I should be spending my time and energy for the next seven days. If I'm reviewing my goals twice a day I will also start each day trying to get a little closer to the finish line. Any my activities for the day will show it.

If you are having a conversation with your client about goals make sure you take the time to educate them on what makes a good goal and how to put it into practice effectively. They will think you are a genius, and you will forever set yourself apart from other accountants and CPAs who fail to take this kind of proactive approach.

If you have questions about how to start these conversations or need some help troubleshooting and getting your clients on track just reach out and I'll be happy to give you some tips.

Does Your Client Recognize the Customer? (Part 2 of Your Client's Marketing Plan Stinks)

CPA's and marketing are NOT the first two things you think about together. But growing a business is about more than processes and profit margins. At some point almost every one of your business clients is going to experience a bottleneck, and effective marketing is the only thing that will solve it. When you revamp processes and invest in resources there comes a time when the next step is scaling up sales. And to do that you need an effective marketing strategy. If you cannot help your clients create one you will be failing them at a critical time in their development.

In the first post of this series I described the "Built it and they will come" fallacy present in most small business marketing plans. In this post I want to ask another question. Do your clients know their audience?

They think they do, but do they really? There are three common responses you are going to run into when you ask this question.

Response #1: "I knew them once upon a time"

These business owners have a very dated impression of their typical customer based on old data. It might be their past experience working in the field or it might be their long forgotten leadership on the sales floor. But they are pulling these impressions from somewhere. You have to respect that and at the same time realize that at some point they moved inside the office, and became more insulated. They hired others to do the customer facing work. And gradually they lost touch, both with what people were actually buying from them and what people wish they could buy from them.

Marketing plans, if they exist in these businesses, look like they did 10 years ago. They still invest heavily in yellow pages while newcomers to the industry favor more targeted advertising. They discount rather than differentiate. Their sales staff is a mix of long term old timers and constant turnover newbies. The product catalog is too thick, there is too much dust on 80% of the warehouse shelves and they spend the industry average on the same advertising budget that everyone else does.

Of the three this is usually the easiest to help, but we will get to that in a second.

Response #2: "Yeah, I know 'em"

Before I explain this mentality let me paint you a picture.

I'm sitting across from a middle aged business owner in shirt sleeves and Wrangler jeans. I ask him, “do you know what your best customer looks like?”

Before answering he pushes the chair away from the conference table, moves the toothpick to the other corner of his mouth, and folds his arms while propping his cowboy boots up on the end of the table. “Yeah, I know ‘em,” he says.

Get the picture?

Without referencing any data or fact-based evidence these business owners begin to recount the characteristics of just a few customers, the outliers. On the one end of the spectrum they describe their largest accounts, which typically have the lowest margins. On the other end they describe their highest maintenance accounts that require the largest overhead investment.

These businesses are unlikely to have any marketing plan. The accounts that loom largest are based on a friendship that the owner believes to be unscalable. Therefor, no effort is made to find similar large accounts. The other accounts he described, the high maintenance accounts, are a pain in the neck. No one can imagine creating a marketing plan to attract more of those. So theres is no plan.

This is what business looks like on autopilot. A couple of big accounts come your way. What resources aren’t dedicated to serving them try to take care of the squeaky wheels. The biggest accounts get larger. No effort is made to obtain additional large accounts. No effort is made to obtain medium sized-low maintenance accounts. No effort is made to disengage from high maintenance pain in the neck customers.

It usually takes the loss of the largest account to get everyone to wake up and start executing a pro-active marketing strategy.

Response #3: "Ummm......?"

This third response typically comes from the business owner technician. These owners focus on the tools and services that might be used to fix problems, rather than the actual problems their customers are experiencing. They take their cues from vendors that sell them the tools of their trade, suppliers that provide product, marketers looking for advertising dollars and competitors who seem to be setting the pace for everyone else.

More than anything they just want to focus on getting the work done. If there's a way to do it faster, they want to hear it. But they rarely ask whether the work is worth doing or if it is the most important work they should be doing. Customers and their problems are a distraction and an obstacle to getting the work done. What information they can provide about their customers is based on second hand accounts from someone that has a vested interest in selling them something.

The universal problem

Each of these three groups shares the same problem. It is that they would rather speculate about what customers want, speculate about what message resonates with them, speculate about what problems they have and how much they would be willing to pay to solve them...they'd rather speculate about all these things than do the hard work of leaving the nest and finding out for themselves.

When you ask them to go out and ask their customers some questions to find out what we should be marketing and how we should be marketing it they hesitate. Then they start to tell you all the things their customers would say if they went to them and asked. BUT THEY WON'T GO ASK! They'd rather just speculate.

Your role

The good news is that this situation presents an enormous opportunity, if you are willing to take advantage of it. You customer is sitting there in the dark, clueless about what they should be doing from a selling and marketing standpoint. This also means they are clueless about what they should be producing and the services they should be providing, not to mention the pricing they should be charging. Someone has to go out and get this information. If your business owner client won't do it there is a really good chance they just don't know how.

Here's what you can do to help.

Get your client to tell you the names of their top 10 customers and get permission to call on these people. When you get them on the phone (or sit down in person) explain who you are, that you are trying to help your client get better information on customers and what those customers want. Then have a simple conversation. Here are some questions to get you started.

  1. What frustrates you about the industry my client is in?
  2. What are some things my client is doing well?
  3. What problems are we not even seeing?
  4. What are you most and least willing to pay extra for?
  5. If you were to consider switching vendors what things would be most important to you?

There are more questions but these are plenty to get you started. After half a dozen of these conversations you will have some very valuable information for your client. And you will have the beginnings of a marketing strategy that is more relevant than anything that has been done in years.

Your Client's Marketing Plan Stinks (Part 1 of 3)


There is a perception that CPA's are the last people in the world that business owners should ask for help when it comes to their marketing plan. Maybe that reputation is well earned, maybe it's not. One thing is for sure though, if you want to help your clients grow their businesses you are going to have to deal with marketing. It comes up in 100% of my client relationships. And it is often one of the biggest value adds you can deliver for your customer.

Marketing is simply the process of conveying your message to the customer in such a way that they buy what you are selling. I'm sure there are more lofty text book definitions, but this is the crux of it. You must have a message. It must be relevant to your customer. To be effective it must drive sales. Over this blog post and the next two I'm going to share the practical side of marketing in small business and the role you should be playing for your clients. The first question I want you to ask is this:

Does your client have a "build it and they will come" mentality?

Years ago my boys decided open up a donut stand on the Saturday of our neighborhood-wide garage sale. I fronted the inventory: about six dozen Crispy Creme donuts. They picked out the location: the baseball field parking lot along the main boulevard through the neighborhood. We set up shop on the tailgate of my truck.

One car showed up, and bought two donuts. Nothing else happened. Finally I said, "Boys, you can wait for the customer to come to you or you can go to the customer."

Now, imagine it's a Saturday morning. You've downed your first cup of coffee and you're contemplating breakfast but everything seems like too much work. The doorbell rings and there stands an eight year-old boy with an expectant look on his face and a dozen donuts in his outstretched hands, silhouetted in a shaft of light coming down from the heavens framed perfectly in your doorway. Would you buy the donuts?

I could not convince my two would-be entrepreneurs to continue pounding the pavement even after our first successful door-to-door sale. I think that had a lot to do with the fact that they were looking forward to buying the remaining inventory from me with their allowance. It's a silly story, but it illustrates the mentality a lot of your clients have toward marketing their product.

It might be a great new product offering. It might be glossy new marketing materials. It might be a remodeled store front. It might be a brand new high traffic location. Whatever it is there is a misconception that just because it's the biggest and best thing happening in the business owner's life it will be similarly huge for the customer. It won't. The customer has other important stuff they're excited about. What is important to you isn't necessarily important to them.

Are they wearing sneakers or loafers

There's a great story about a company called Staff Leasing that started here in Bradenton, FL. It was one of the first big PEO companies. The four owners each put up $5,000 for startup capital and literally set up shop in one of their garages. Every weekday for six months they would pick a busy commercial street and they would go door-to-door all morning. They would all gather for lunch, put on a fresh shirt, and spend the afternoon going door-to-door on the other side of the street.

I often tell my clients they need to go buy a new pair of shoes when they tell me about their latest product offering that is going to be wildly successful. For some businesses the suggestion is literal, for others it is just figurative. But the push back is real. If your plans don't include taking the message and the pitch to the customer I'm not interested in spending a lot of time executing. One of my most successful clients has a social media, adwords and website promotions budget that rivals the payroll of some of his competitors. He has learned the product is nothing if it turns out to be the proverbial tree falling in the forest.

Your role with your clients

It is not your job to construct the marketing plan. It is your job to make sure there is one. It is your job to ask the questions that get your client to consider their ignorance in this area and the need for a better plan of attack. Here are some questions you can ask:

  1. How are current customers going to hear about this?
  2. How many times are they going to hear about it in the next 30, 60, 90 days?
  3. How are new prospects going to hear about it?
  4. How are these people going to be pitched?
  5. How do we know this is what customers and prospects want?
  6. How has everyone (sales, service, support, admin and executives) been trained to deliver the same message?
  7. How is everyone incented to deliver that message?
  8. Why do we think this campaign will be successful?
  9. What are the measures for success?
  10. When will we gather to look at the results and decide what to do next?

Your clients may get too emotionally wrapped up in their latest project to see the rough edges and barriers that you anticipate. By asking simple, but very provocative questions you can help them take a critical look that makes success much more likely.

Don't Price Like Mickey Mouse


Here in central Florida the Mouse isn't just a theme park mascot. He's big business. And Mickey made some bone headed business calls this year, as recounted in this Motley Fool article, 5 Reasons Disney World Lost This Summer. Chief among these was raising prices for no good reason. And that's what I want to talk about.

Disney raised the price of single day tickets almost 20% during peak summer season. And they did it at a time when their four Orlando theme parks opened no new attractions. There was speculation that the move was meant to reduce last summer's rampant over crowding. And if that's what they were looking for, IT WORKED.

Things got so bad that Disney lifted all of the blackout days for their cheapest summer pass holders in the hopes that some of that overcrowding would return. It didn't happen and this year Comcast owned competitor Universal Orlando Resort is eating the Mouse’s lunch.

What does this have to do with your consulting practice? There's a tendency to raise prices on one-off tax returns and accounting work to free up capacity for more consulting. And that can have unintended consequences.

More demanding than ever

If you just raise prices a lot of clients you might want to leave will stay, pay the higher price, and become your worst nightmare. Everybody I know that DID buy summer passes to Disney gripes and complains at every opportunity about how they got screwed. They are still going to Disney, but they aren't doing much to encourage their friends and neighbors to go with them.

If you have a client that is an enormous time suck raising the price has the potential to make them an even larger thorn in your side. My experience is that your problem clients usually know they are a pain in the butt, and they secretly appreciate the fact that you put up with them. When you raise their price they will begrudgingly pay it, and they will feel more justified in demanding more of your time and attention.

I think it's better to tell these kinds of clients that you don't have the capacity or desire to keep doing their work. Arrange a soft landing at another firm and preserve the relationship. Your transparency here is important on two fronts. It keeps a poorly executed pricing strategy from back firing. And it bolsters your confidence and resolve to do the work you really want to do.

How deep is too deep

One of the problems with creating capacity through price increases is the inexact science of selling those increases to the customers. Disney clearly raised prices too high. But they didn't know that when they came up with their fancy tiered pricing model. I'm sure the spreadsheet looked great. In the real world it's hard to predict how your pricing increases are going to go over.

And once the new prices are out there you can't backtrack without losing loads of credibility with your customers. This is happening with Disney. When Disney lifted the blackout dates for all those cheap annual pass holders they simultaneously devalued the premier annual pass holders who paid through the nose to go to the parks whenever they wanted.

If you raise prices too high and a few too many clients walk, you will probably freak out. Then you will spend the next two or three years rolling over every time someone pushes back on your price. Your confidence and pricing fortitude will be gone. This is another reason I’m such a big advocate of transparency. As a small business owner you need confidence in yourself to be successful. Having one-on-one conversations with clients where you decide exactly who you will and who you won’t work with is a much healthier way to create capacity and build your self confidence at the same time.

Have something to show for it

I think this is the biggest lesson to learn from Disney. Had one or more of their parks featured a major new attracting they could have (and would have) used the grand opening to justify higher one day and season pass prices. It's likely a lot of people would have still opted out, but probably not as many. And Disney would have enjoyed a whole new tier of customers who weren't considering the parks until those new attractions compelled them to get in on the action.

In your consulting practice you can sell steep price increases if they entail higher value for your customers. Those who opt out are not left out. You didn’t give them a take or leave it price decision. Instead you let them weigh their options and decide whether they want the increased value enough to pay for it. If they don't want it, it is their decision that causes them to move on, not your blanket policy forcing them out the door.

You can increase the price of a tax return 50% if it includes planning throughout the year. You can increase payroll prep by 25% if it includes help with onboarding new employees and not just delivering their first paycheck. We doubled and tripled prices one year and told clients they would now be getting a custom suite of services designed specifically around their goals for the year. When you do these things not everyone will sign on, and that's good because it creates the capacity you are looking for. More important, you will find some clients that open up and take advantage of your expanded services, in spite of everything you ever thought about what they wanted or what they might be willing to spend.

Price increases aren’t bad, but as a strategy in and of themselves they can do more harm than good.

Tricks for Becoming a Better Face-to-Face Communicator

There's this one guy....Every time we get together it takes me about 2 minutes to remember why I don't accept a lunch invite from him more than a few times a year. We see each other, shake hands, tell the server what we want to drink and then one of us asks, "So what's been happening?" It doesn't really matter who goes first. If he's talking he's thinking about what he wants to say next. If I'm talking, he's still thinking about what he wants to say next. It's so obvious that by the time lunch arrives I can't wait to leave. I don't want to be that guy. I am terrified of becoming that guy.

Listening is a skill that is not only good social etiquette; it also has a direct impact on your ability to serve customers. Eventually poor listening will start to hurt you in the wallet as clients disengage and discover you can't help them with their biggest problems because you won't take the time to truly understand their biggest problems. Even if you get the diagnosis right, you'll never be able to guide your customers through execution because they'll see you as the pompous know-it-all that doesn't really "get" what they're all about.

At it's core good listening is about good communication and good communication is at the root of healthy relationships. If you want healthy relationships where loyalty and goodwill help you grow your business, listening is a skill you need to develop and hone, just like you work on things like public speaking or time management.

Here's what my struggle with listening looks like. I go out to meet a new prospect, a business owner that has heard good things about us from another client or maybe a referral source. I'm there to learn as much as I can, and also to answer any questions they have about me and what we do. I'm primed to listen. I know I need to listen well. Listening is my number one priority during this meeting.

But what happens?

The Awkward Silence and The Burning Question

There are two things that tend to get in the way of me being a good listener. The first is the awkward silence. If I have never met the person one of my biggest fears is discovering someone who stinks at conversation. It's terrible. There's no personal chemistry, no small talk, no substantive topics come up. Minutes stretch into days and we both just want it to be over.

The other obstacle to good listening is even worse. Let's say the person is a GREAT conversationalist and we really hit it off. Multiple times during our 60-90 minutes together I find myself fixated on a question I just MUST know the answer to. Maybe it's a burning curiosity. Maybe it's a critical detail they left out. Maybe it's a piece of advice or a tool I want to share to help them. But I'm polite, so I don't butt in. I wait for a break in the conversation. I wait my turn. And the whole time I'm waiting, I'm desperately trying to hold onto that question, that thought, that piece of advice, that tool. And because I stink at multi-tasking (and you do too) every single second I try to hold on and not forget I'M NOT LISTENING. I'm just waiting to respond.

But there's hope. It's a simple system that starts before I ever darken the door of a prospect's lobby.

21 Questions

So before the meeting I sit down, sometimes it's in the parking lot five minutes before I need to walk in the door, and I rack my brain to write down 21 questions. There's a sample at the top of this post that I just made up. The list is different every time, but a lot of the questions show up over and over again.

When I find myself in one of those awkward silences I say, "You know I was thinking about our meeting and some things I wanted to ask you. Let me see...we already talked about that...and that...oh yeah, what are some daily habits you've built that really help you out?"

That's step one, and that helps guard against the uncomfortable silences when you run into a poor conversationalist. But how do you stay present during the meeting?

Stealthy Notetaking

As you start the meeting you need to pull out a notebook or piece of paper, the same one that has the 21 questions on it. Now you need to take some notes early, even if they don't mean anything. Just establish the expectation that you are going to be writing stuff down for most of the meeting. If you don't take notes early here's what happens. Twenty minutes deep in conversation, you pick up your pen to start writing for the first time and the other person immediately gets self-conscious. They start wondering what was so important you suddenly decided to start taking notes. Often they will forget what they were going to say. You're note taking is now an 800 pound gorilla in the room that becomes very awkward.

I am a natural note taker so this isn't an issue for me. I process stuff better (and listen better) when I take notes, but I'm careful to keep as much eye contact as possible. No one wants to stare at the top of my bald head for 90 minutes. I start taking notes early and often. When one of those curious questions crops up or when a critical detail is left out, I just write down enough to jog my memory and put a blank check box next to it. Then I forget about it and go back to being totally engrossed in the conversation.

When a logical break occurs, I go back to my notes and say, "while you were talking something popped into my head and I wrote it down so I wouldn't forget it. Let me find it. Oh yeah, here it is. You said Bob can be a challenge. Can you give me an example so I understand what kind of challenge you are dealing with?"

There are two things that make this approach work so well.

1. It honors your host

Most people are not accustomed to being taken so seriously that their listeners take notes, don't interrupt while they are talking, and write down questions as they go. Treating people this way causes them to be transformed. Timid people become more sure of themselves. Stressed people relax. Harried business owners slow down and give you all the time you want. It's honor and people respond to it in a tangible way.

2. Transparency builds rapport

Early in the conversation I will often share my approach out loud. As I’m flipping through my notebook I say something like, “sometimes I stink at conversation and I want to be a better listener so I've made up this little system. Let me get to the right page here..." Sometimes they just say "no problem." Sometimes they want to hear more about the system. Sometimes they confess to being poor listeners themselves. But they are ALWAYS curious about the 21 questions. It's a great icebreaker. By sharing one of my struggles with them, they loosen up and are a little more willing to share some of their struggles with me.

Listening to and communicating with clients and prospects is one of the highest value skills you can master. If you want to go out on your own or take your firm to the next level good listening is critical. Getting just a little more disciplined in your approach before the meeting and a little more comfortable using your notes during the meeting can develop that skill a lot faster.