The original Morris Mini Minor was launched as the “housewife’s shopping car”. It was small, agile and affordable, and positioned as a practical family car. Over the next decade, the brand went through a series of repositionings to become the ‘must have fashion accessory, the choice of rock stars and royals on the one hand, rally champion on the other. An image which has remained and continues to justify a luxury vehicle price strategy today.
The car market is a great example because it is divided in 2 dimensions: product substance (what you get) and buyers’ attributes (what we think we get). Mass market cars are positioned in the first dimension, meaning customers buy based on rational factors, with a focus on practical features and at a lower price point. In the second dimension customers care more about emotional factors, and will pay more.
Accounting firms can learn from Mini Cooper.
Traditional Compliance based Accounting
Typical (traditional) Accounting firms are focused internally, as in the compliance model.
Business is focused on accuracy (correctness), quality (compliance) and control.
Correctness = Detail + Accuracy
Compliance = Adherence to methodologies
Control = Producing time and data
How Clients perceive Traditional Accountants
Clients perceive these types of firms as simply an extension of the ATO because they are necessary to meet their compliance requirements. The problem is that they turn to other professionals for confirmation and advice on financial, wealth and business matters. Clients just don’t see compliance based firms as solutions providers, but rather as part of the problem. eg. They must deal with their accountant in order to get their tax done.
I experienced this in practice when a client said to me “I stopped asking you because every time I wanted to do something you said ‘no’”. At the time, I remember thinking that he just wanted me to okay his “mates at the pub” tax saving schemes.
Traditional compliance firms are like the original Morris Mini Minor positioned as a family car. They are a necessary for day-to-day functions, priced for budgets and sold on benefits such as fuel economies and household practicality.
Value Add Service Accounting
Repositioning your firm into the Value Add Service Delivery Model is about becoming a premium brand. It’s about repositioning in your clients’ minds/perception that you are part of their solution.
The pillars of premium branding are:
Confidence = knowing what you have offer and what the clients get
Certainty = services that deliver on client outcomes and expectations
Clarity = knowing that your processes and tools produce information that is relevant to your client
How Clients perceive Value Add Firms
This transition shifts both you and your team’s focus externally – towards servicing clients and delivering them value. Clients get this and their perception changes. By confidently delivering value to them, you become more valuable. By providing solutions that are certain, you become a trusted advisor. By communicating the benefits of your processes & tools to them with clarity, you become part of their solution.
In the case of Mini Cooper, vehicle price, desirability and bottom line sales and profit are stronger today than in it’s whole history. This is driven by the continued positioning of MINI in the premium price segment.
How my ‘No’ Client taught me the Value Add Service approach
Remember my ‘No Client’? Well, when I changed my approach with him and started suggesting ways that he could save tax, that were either strategies to restructure or actually spending money to save 30 cents, this transitioned him to becoming the “No person” in the conversation. When he got to this point, I moved to the next level by suggesting we stop spending time and money on tax, and start talking about business profits and wealth instead.
This conversation took our relationship to an entirely different level, one which he had really been asking me for from the beginning. In billing terms, he went from a $4.5K to $11.5K p.a. client. That’s 2.5 times the fees, 1.5 times my average hourly rate and an infinite increase in my own intrinsic satisfaction with the service I was delivering.
Big Benefits of going from Compliance to Value Add
Firms that get this concept and are able to make the transition experience many positive effects.
- Double and triple average fees
- Increased team motivation and satisfaction from clarity on team roles
- Deeper relationship with clients stemming from conversations based on their needs & situations rather than just their compliance requirements
- Partners get to focus on more challenging and interesting work
- Time is freed up for future planning and further growth
