Author Archives: Aron Brajtman

Threats to Accounting Practices

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I recently attended a webinar run by the Proactive Accountant’s Network that reflected my thoughts concerning accounting services.

Fundamentally, they contend  that standard accounting compliance work provided by CA firms is being threatened.

They list 3 threats:

  • Cloud accounting
  • Globalization
  • Commoditization of compliance services

Their premise is that the world has changed in the way services are being delivered, which has resulted in the demise of organisational giants.  For example:

Formerly Replaced by
Kodak Digital photography
Blockbuster Netflix
Bonders Amazon
Yellow pages Google
Travel agents Expedia

 

 

What is the likely impact of these changes on accounting and bookkeeping work?

Cloud services are taking over and they will do to the practice of accounting what Netflix did to Bonders and Google to Yellow Pages. See here for more

Globalization is here and services are being off shored. For instance:

  • Repetitive tasks can be performed anywhere in the world at lower costs.
  • Bookkeepers and overseas accountants will offer their services for less

Commoditization of compliance services is here. Clients are more transient and more price resistant. Among other things:

  • Clients want and expect answers to their business problems
  • Coaches are providing some answers and competition
  • Young clients want an accountant who is  technologically aware
  • Clients don’t like  time based billing
  • Clients want value added services

 

A 2013 CCH survey reported that:

 

  • 64% of business owners would consider replacing some of the roles that their accountant currently performs
  • 53% would consider looking for a new accountant if they are reluctant to embrace cloud based accounting software. Read more:

 

 

I think their premises are worth considering.Any thoughts?

Sustaining Competitive Advantage

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Basically there are three main ways in which you can compete in the marketplace:

On Price

By serving a niche market better than anybody else

On the individuality of your product or service

Which of these is the better long-term strategy? Undoubtedly a lower price than the competitor is an immediate advantage – but will it deliver a continuing competitive edge? Differentiating your products from your competitors will provide a much harder to match advantage for your business.

No because your competition will not roll over and die. They will lower their price. So you are both making less.

Differentiating your products from your competitors will provide a much harder to match advantage for your business.

Differentiating your offerings provides the business with a focus on who it wants to serve and it provides you as the address that your market will turn to.

 

Unique Core Differentiators

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Perception is the reality-people buy based on differences They Perceive. It’s the differences that potential customers perceive that make them choose one business over another. And those differences make the customer feel more confident about their final decision as well.

Unique Core Differentiators (UCDs) clearly articulate what makes your business different. They are the special things about your product or service or business that compels customers to buy from you rather than your competitors. Well-formed differentiators target your customer’s ‘hot buttons,’ real buying concerns, or key frustrations. In one statement it educates them about exactly why they should buy from you.

Selling Solutions – Not Products

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The best sales people are ‘canned’. They know better than to wing it through a prospect meeting. They have a systemized sales process to work with. And the most effective system is relationship selling – selling based on getting to know a customer’s real needs and fitting your product to them.

Relationship selling doesn’t involve high pressure or manipulative methods. The salesperson here is a problem solver, a helper, and an advisor to the customer. They learn to identify the customer’s needs and sell them a solution that fits the need – not just a product. It moves the emphasis from price to value as a differentiator and provides a powerful advantage over competitors.

Do you know…

How to use objections to further the sales process

How to prepare a sales pitch so that saying ‘yes’ is the next natural thing to do

How to build relationships so strong that your clients won’t think of going anywhere else

Features And Benefits

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Your customers are generally only interested in product features that translate into benefits. So, whether you’re developing a new product or exploring a way to repackage an old one, it is important to think clearly about the benefits you provide. Product features are not important in themselves. Great as a product may be, customers won’t love it for its own sake. They’ll only love it for the benefits it provides.

Developing An Extraordinary Guarantee

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Guarantees, and especially those that are in some way even better than ‘money back’, are a proven way to attract prospects. But how to develop such a guarantee?

The best thinking on the issue of developing guarantees now involves using the concept of ‘risk reversal’.   There is no better way to change the perceived benefit of a product or service than to offer an ‘extraordinary guarantee’ that switches the risk of making a wrong choice from the buyer to the seller – risk reversal. In effect a risk reversal guarantee inspires the prospects trust by announcing: “I’m so confident in our products, services and business that I’m prepared to put my own money where my mouth is and make it impossible for you to lose out on this transaction.”

By knowing what the customer really wants, and then making it clear that they will get the result they’re after from this deal or else the seller shoulders the consequences, makes their buying decision so much easier.   And that’s what offering an extraordinary guarantee can do.

Weak Business Model

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Most small business owners never question the validity of their business model. Is it a successful model? Does it make sense? Will it make money? Yet your business model is your foundation. It does 2 things

  1. It explains to all who ask how your business provides value to its target market. How do you make their life easier, happier, richer and more successful? Why do your customers come to you because … you have a convenient location, there is easy parking, your after sales service is good, you recognize and greet all your customers, you have a unique understanding of their business, your product/service is the best value for money, no one else can supply it and so on
  2. It demonstrates why your business will be financially successful. Do you have lower costs than your competitors, and if so, why? Is it because you are skilled at producing your products more efficiently? Do you have a source of raw materials that others pay more for? Can you command a price premium, and if so, why? Is it because your service is so exceptional that people are willing to pay a little more, or is it because you provide 24/7 service?

 

Are you providing sufficient value that people will pay to obtain your product/service at a    price that will make you a profit?