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Cultivating long term relationships with your tax prospects

So you’ve been offering special reports and other educational items to your target audience, and you have built a prospect list of folks that have ordered your information. Once you have built a list of prospective clients, what exactly do you do with that list?

First of all, don’t be disillusioned into thinking that you are going to convert every prospect you communicate with regularly into a paying client. And yes, you need to be communicating with them regularly. It is through this long term communication that people come know, like, and trust you. And never forget that people do business with people that they know, like and trust.

Don’t forget that the same holds true for your existing clients as well. It is important to have regular contact with them, year round, in order to reaffirm that they’ve made a good decision in working with you, and to reestablish yourself as an expert. There are four distinct things you can use your list for in order to cultivate new and repeat business and referrals from your internal list.

The first thing you should be doing is publishing a monthly newsletter. This works much better if you physically mail it, and here’s why: It’s because people discount e-mail. So if you actually take the time to go print out an 8 ½ x 11 two-sided newsletter once a month, you can upload your newsletter to the U.S. postal service, and also upload your mailing list to the postal service. They’ll do all the printing and mailing for you, and it’s dirt cheap. But you should mail it out because it’s going to give more value. People are going to notice it. Even if they throw it away, you’ve now gotten the “hits” on your name and your information. If, within the next couple days, somebody says they need an accountant, they’re calling you.

The second thing you should be doing is sending them regular emails with updates, promotional offers, seasonal reminders, and important announcements. Keep them up to date with what’s going on with tax and accounting changes that may impact them, and also let them know when you’re going on vacation, and to contact you before that to get their needs taken care of. This will encourage them to come in and speak with you.

The third thing you want to be doing is making yourself available to your prospects on social networking sites on the Internet. People actually do want to get to know you as a person. People want to know what their professional advisors are like outside of the office. They want to feel like they know you more so than you’re just an accountant. So give them access to you.

Create a Twitter account and share with them when you do certain fun things or vacations you take or restaurants you go to or sporting events, share whatever your hobbies are. Then people will know, like and trust you and be more likely to do business with you by becoming involved in those things. You can use Twitter, Facebook, LinkedIn, all the different social media websites in order to do that.

The fourth thing you should be doing with your internal client and prospect lists is to create new content, such as blog articles, educational videos, and special reports, and make these available to your prospects. Have a blog set up that people can read, and syndicate an RSS feed through Feedburner for people to subscribe to and follow. Mail and email occasional reports and videos to your list. The bottom line is to proactively make sure that you are constantly in contact with your prospect list. Tax Marketing Premium membership provides you with some special tools to help you accomplish this.

How many contacts should you make with folks on your list? My suggestion is to contact them monthly, at a minimum. However, I will tell you that 30 to 70 …

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How To Expand Your Tax Practice

Expanding into new realms is one of the best ways to expand your tax or accounting practice. In this article, we will discuss how to do exactly that.

When it comes to market expansion of your practice, there are really two ways to go about doing it. The first is to consider geographical expansion. You are already offering your services in your local area, and at some point you will be asking yourself, “Can I offer my services in adjacent communities, also?” You could establish satellite offices in neighboring cities, or take advantage of the growing number of “virtual office” spaces that exist and meet with clients in other cities one day per week. Then, you could perform targeted marketing in those other areas to obtain new clients there.

If you live in a rural area, this strategy could be particularly effective. By establishing occasional office hours in a series of small, rural towns that are distant from a large city, you can quickly create a following of dedicated clients that deeply appreciate your taking the time to come to them. Chances are you could find a client in a small town that was willing to trade occasional-use office space for some services.

The other way of expanding your accounting practice is to look at specific niches. Niches are small sub-groups of clients that you choose to specialize in servicing. For example, providing tax services to construction contractors is a niche. Becoming the “go to” tax advisor for a local major employer is another niche.

The great part of creating unique niches for yourself is that specialization tends to command higher fees. For example, a heart surgeon charges a lot more than a family practice physician. The more specific you can get with the niches that you target, the easier it becomes to focus in and market specifically to those audiences. You can create special reports and marketing tools that are tailored very specifically to your niche audience. For example, you could offer construction companies in your area a free report detailing the “7 Major Tax Mistakes That Cold Kill Your Construction Business”. This sort of targeted marketing is noticed by the relevant audience.

Drilling down into targeted market niches is referred to as “vertical” marketing. Another option is to expand out. For example, some firms also offer various forms of business consulting services, business planning, business valuation services, wealth management, stock brokerage, insurance, and more. This not only allows you to make more money from existing clients by selling them additional services, but also gives you a greater variety of things to talk about in your marketing, and specifically market those services.

Start thinking about unique industries you could specialize in servicing, and also start thinking about additional services you could offer to your existing clients. Both of these methods will give you new avenues for increasing revenue that simply did not exist for you before.

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Setting Revenue Goals For Your Tax Practice

The most common answer to the question of “How much money do you want to make?” is “As much as possible.”

Anybody that is in private practice for themselves, either as a solo practitioner or with a small group of partners, has to take a serious look at this question, however.

Obviously, different revenue levels require vastly different levels of work, commitment, infrastructure, marketing, etc. The decision to make X dollars is not as simple of a decision as what you might think.

I believe in two approaches to this decision process. The first is to decide how much TIME you want to put into your practice, and make revenue and expenditure decisions from there. The other approach is to determine how much take-home income you want, and work backwards from there.

I personally make the decision more from a time standpoint. My lifestyle design objectives are somewhat unique, as I am willing to sacrifice significant financial gain in order to have extensive freedom to travel around the world. You may be more interested in earning a certain income to support a specific lifestyle.

If you want to make $500,000 per year in take home pay, then you are going to need a certain size organization, as it is unlikely you can achieve that income goal completely on your own. That size of organization is going to require infrastructure, employees, office space, etc. All these factors need to be taken into account.

If you want to work as a solo practitioner, and only work 40 hours per week, then this is going to create an income limit for you. You can increase this limit by focusing on niche clients, charging premium fees, performing high end services, and doing specific styles of marketing.

Keeping in mind the various challenges and limitations that come with having certain income goals is important. Keeping an open mind, and having realistic expectations about how much money you can make, and what it will require, is critical to your success as a firm.

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Setting Marketing Goals For Your Tax Practice

Any marketing effort needs to have goals. Otherwise, what’s the point, right?

Different marketing efforts will have different goals. For example, a new prospect lead generation campaign may aim for a specific number of new leads, at a goal of X dollars per lead. On the other hand, a direct mail sales letter sent later to these same leads will have a revenue goal for the campaign, as well as a revenue per prospect and revenue per sale goal.

As an accounting professional, you are likely used to thinking in terms of revenue per client only, either on a monthly or annual basis. You may even only be used to looking at average billings per hour, and comparing that to your actual hourly rate.

I’d like you to start thinking in broader terms.

To start with, look at each of your practice areas. Do you offer a broad range of services, but make 90% of your revenue from just two of the?

Take a look at your hourly billings from your various services. Do you make far more per hour from one or two activities than all of your others?

The reason I want you to look at these particular metrics is because it will tell you where best to focus your marketing efforts.

What if your highest dollar per hour activity isn’t the same thing as what brings in the most revenue? This is not an uncommon scenario. If these two activities are different, then you need to make some decisions. Once you have decided on the practice areas you are going to market, you need to look at revenue goals. We will discuss the revenue side more in the future.

If you’d like to take a trip down the rabbit hole of identifying and attracting IDEAL tax clients, take a gander at this video.

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Measuring Your Marketing Results

One of the key characteristics of a cohesive marketing strategy for your tax practice is to track and measure every aspect of your marketing, like we mentioned last week. Knowing what you’re spending your money on isn’t enough: You must know what dollars are bringing in what results.

Not only must you track the results of your spending, but you must track transactional elements of your marketing. Here are a number of important marketing metrics for you to be tracking.

Cost Per X People Reached: In the TV, radio, and print worlds, this is often referenced by advertising sales reps as CPM: Cost Per Thousand people reached. It provides an apples-to-apples method of comparing various media. However, do not get caught up into thinking that the lowest CPM is the winner. Just because one media is cheaper on a CPM basis, doesn’t mean it’s worth using if it’s not otherwise your ideal target market.

Cost Per Lead: Let’s say you spend $5,000 on a direct mail campaign, and send 10,000 prospecting letters for that money. From this, let’s say you get 200 phone calls, for a 2% response rate (which is an excellent response rate for direct mail, by the way). Spreading the cost of the campaign across the 200 phone calls, you invested $25 to acquire each lead. If only half those leads were qualified prospects, your cost is $50 per prospect. Knowing these numbers for every marketing effort you employ is one of the most important things you can know in your entire business.

Cost To Acquire A Client: For every individual client you have, you should know how much you had to invest in order to attract that client. In other words, you should be able to know every dime that you spent on direct mail to a new client, their share of your seminar costs, the pro rata magazine ad cost of getting their first phone call, etc.

Lifetime Customer Value: Too many firms look at a client from a TRANSACTIONAL standpoint. In other words, how much is John spending today? Instead, you should know the lifetime value of a customer: How much are they going to spend with you over the course of a year…five years…thirty years…The value of referrals they provide you, etc. This is often a foreign way of looking at your clients, but is a profound and necessary paradigm shift to make in order to succeed long term.

Conversion Ratios: You should know your conversion ratio through every step of your marketing and sales process. You should know what percentage of people that call you book an appointment. You should know your ratio of seminar or webinar attendees to newsletter signups. You should know what percentage of people that order a free report then come in for a consultation. You should then know what percentage of consultations turns into entry level clients. You should then know what percentage of entry level clients (for example, tax return preparation clients) become other type of clients, such as wealth management, payroll, QuickBooks advising, etc.

These are just some of the numbers you should be tracking. Create yourself a spreadsheet and start tracking these metrics immediately, as these are the most basic things to track in order to begin making intelligent marketing decisions.

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3 Characteristics of a Successful Tax Firm Marketing Strategy

Many tax professionals live via a “boom and bust” cycle. In order to break out of this cycle of doing work for a client, then having to find another client in order to put food on the table, a successful tax firm utilizes a marketing strategy comprised of three distinct components. In today’s article, we’re going to discuss each of those components.

First of all, the marketing strategy utilized by a successful tax firm is planned. In other words, it’s not a random assortment of marketing efforts with no cohesion. A real marketing plan might consist of multiple, individual marketing campaigns, but they all have a fairly universal message, look, and feel.

The smart tax professional is not swayed by the latest slick advertising salesman from the local newspaper, radio, or television outlet to buy ad space that is inconsistent with their plan. Planning allows you to set goals, set budgets, and track and measure the effectiveness of each piece of your marketing strategy along the way.

Second, any marketing strategy, in order to be successful, needs to be consistent. Successful marketers are persistent and consistent marketers, and one of the key things for you to understand is that, as the owner of a professional practice, your first job is NOT accounting…not taxes…not bookkeeping. Your primary job is to bring in clients….to generate revenue….Because if you have no clients and no revenue, there is no tax and accounting work to be done in the first place.

Therefore, your first job is marketing and sales (I lump these two together, because they are two components of the same thing). Consistent marketing, rather than starting and stopping, is critical to the success of a marketing plan. Without consistency, you’re not really following a plan, as discussed above, nor are you really able to effectively track and measure things, which is discussed next.

The third characteristic of an effective marketing strategy for any tax firm is that the effect of your marketing must be measurable. PT Barnum, the circus guy, once said, “I know I’m wasting half of my advertising dollars. The problem is that I don’t know which half.” Don’t be PT Barnum. Every marketing dollar you spend must be held ruthlessly accountable for results.

Every piece of marketing you send out needs to have an offer that entices people to respond, and you must have a way of measuring that response. This type of marketing is generally referred to as “direct response” marketing, and for the professional practice, I firmly believe that it is the only type of marketing you should be doing. You should be able to track where every consultation, every client walking through your door comes from. Not only that, but you should know a variety of other important statistics regarding your marketing.

After all, we like numbers, right? So it should simply make sense to want to know where our marketing dollars are best applied, based on statistical comparison.

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The Accounting Practice Lifecycle

For the vast majority of practitioners, the accounting profession is incredibly cyclical. Ours is a profession often characterized by a never-ending series of boom-and-bust cycles. Perhaps you have a steady stream of monthly accounting and payroll clients that provides you a “base” of revenue, but the vast majority of tax and accounting professionals (sole practitioners in particular) live a life of doing some large project for a new client, finishing that project, and then having to struggle to find the next big client.

The key to growing a successful practice is to have a steady stream of clients. Instead of living on the boom and bust cycle, or relying on tax season for 80% of your annual income, the successful accounting firm is constantly marketing to strengthen existing client relationships, get referrals, and obtain brand new clients.

Even if you have what you consider to be a successful practice, I have a few questions I’d like you to ask yourself:

Am I earning my desired level of take-home income? Does my practice afford me the free time and lifestyle that I desire? Do I have a real business that could run without me, or have I created a job that I still have to show up for every single day? What is my exit strategy from or for my firm?

If you’re not making the money you’d like to be, don’t have the free time you want, and have no real exit strategy planned, then chances are you don’t have a business, you have a job. A self-employed job, perhaps, but still a job, where other people and other circumstances are your “boss”.

If you would like to transform your practice into a real business that operates systematically and successfully, regardless of your physical presence at the office, then you’re at the right place.

Transforming your practice into a business that supports your desired lifestyle is not only possible, but I personally believe is one of the most important missions in life you can undertake.

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Where do you really want your tax practice to be in ONE year?

Most tax professionals that I speak with aren’t really sure where they want there practice to be. They’re doing this thing that they do, week in and week out, but don’t really have a vision for where they want to take it.

Many motivational speakers will talk about having a 5-year plan for your life. They talk in terms of very long-term goals and planning. But I think on a much shorter scale, and there’s no reason not to. Amazing things can be accomplished in twelve months or less, particularly in a professional services business like tax or accounting. There’s absolutely no reason for us to look on a time horizon longer than a year, especially if you focus heavily on tax services, due to the natural annual cycle of most things in tax.

Have you given any thought to where you want to be a year from now? If not, this is the time to think about it. We’re in the lull between tax seasons, and it’s convention and seminar time, so practice management and planning are probably near the top of your mind right now. In fact, if you haven’t yet registered for one of my live workshops, I’d encourage you to do so. See the workshop schedule here.

It’s completely possible to take an accounting practice from one person and $60,000 per year in revenue to 10 people and $2 million in revenue in one year flat: It’s been done. If your ultimate goal for your practice is to grow to this level, then what are you waiting for?

If your goal is to never have employees and remain a solo practitioner, but want to double your revenue and live full time in a foreign country while serving your American clients, that’s been done, too. There’s nothing stopping you from doing it, and it’s very doable within just a few months.

Go for a walk and give serious consideration to what you want your practice to look like a year from now. If it’s growth, then there is a marketing solution. If it’s location independence, there’s a practice management solution. No matter what you want out of your practice, you can have it.

Remember, you created your business to serve you, not for it to be the master of your life.

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10 Different Ways To Get 10 New Clients

What would it mean to you to be able to add 10 new clients to your tax or accounting practice?

Here are 10 brilliantly simple ways to find yourself 10 new clients each. Most of these methods are free, but take up some of your time.

1. Attend leads groups. An oldie, but a goodie. Check with your local Chamber of Commerce, BNI, or even form your own leads group. These groups typically restrict themselves to one representative from an industry category, so you might have to wait for a spot to open up in an existing group. Be sure that the group is actively engaged in the referral process, not just a social gathering. If you’re getting legitimate referrals from other group members, you should easily be able to acquire 10 new clients within six to twelve months from a leads group.

2. Conduct seminars with other financial professionals. Find yourself an estate planning attorney, a mortgage broker, and a life insurance professional or financial planner (if you’re not one yourself), and organize a small 3-hour workshop on a Saturday afternoon at a local hotel. A decent meeting space can be rented for only a few hundred dollars, and each participant uses email and direct mail to invite all of their clients to the seminar. Each speaker has 45-minutes to present information of value to the attendees, and each presenter makes an offer to everybody. Organize one of these each quarter, and you should be able to pick up quite a few tax clients.

3. Sponsor a local event. Is there a regional trade show of some sort in your area? How about a Chamber of Commerce mixer? An annual festival? Get yourself a table or booth at these events and hand out copies of your book or other lead response “widgets” to attendees. For example, back home we have an annual music/food/beer festival every August called New West Fest, and numerous local companies that have nothing to do with food, music, or beer participate and set up booths in the park and Old Town areas. Banks, lawyers, chiropractors, etc., all participate. It’s a good opportunity to be seen in the community, and if you’re smart about it, to generate actual leads.

4. Write a book. Nearly three years later, the first book I ever wrote, a tax resolution guide for individual consumers, still gets sales on Amazon. Sprinkled throughout that book are calls to action to visit my tax practice web site for more information. While the lead flow from it has definitely decreased over the past year, I still get a couple decent leads per month from it. Having a book is a also an excellent thing to have to set you apart from your competition when you’re at events like 1, 2, and 3 described above.

5. Get on the radio. Most towns have small talk radio stations, generally on the AM channels, that are always looking for guests. These stations have 24 hours of air time to fill every day, and that’s more of a challenge than you’d imagine. Many moons ago, I worked at a tiny 1,000 watt AM radio station part-time as a broadcast board operator, and there were literally times when the station had nothing to air and we had to broadcast reruns of past talk shows (which advertisers didn’t like). Contact these local radio stations and make yourself available for interviews. You can even try to get your own “Tax Talk” show. If nothing else, you can buy yourself a 30-minute radio show for not a lot of money. There is significant PR value in this for you, and people that call in are potential clients.

6. Write for your local newspaper or business journal. Basically the same idea as the radio show, but in your local newspaper, business journal, or a specialty publication. The specific services that you offer and your IDEAL™ client profile will dictate what publication …

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How to leverage written tax articles to get more leads

Today it’s called content marketing, but the reality is that it’s one of the most effective marketing strategies in the history of capitalism.

The core idea behind this strategy is to create engaging content that entertains and educates your target market, while simultaneously reminding your prospects that you possess the solution to their tax problem.

That problem can take numerous forms, from the frustration of completing their tax return to the nightmare of owing millions in back taxes.

In my tax resolution practice, ALL of my marketing leverages the concept of content marketing, in one way or another. Everything from my free reports offered in response to letters and postcards, to 24 hour recorded information lines, to my books written for consumers — all of this is content marketing.

What’s this about writing articles?

Despite the prevalence of video on the Internet today, the fact remains that the Internet is a platform built with and for the distribution of the written word. We still use words to search for things on Google, and Google must still use words on pages to determine the relevance of web sites.

On top of that, direct mail is still one of the most effective means available for reaching new prospects, reactivating lost clients, and keeping existing clients coming back. From reaching out to new movers in to the neighborhood for tax prep season, to tax lien marketing, to client newsletters, direct mail, and it’s inherent use of the written word, is something that should be part of every tax professional’s marketing arsenal.

The written word, despite the audiovisual world in which we live, is still a remarkably valuable form of communication. Aside from being a tool for appearing high in search engine results, the written word is a vehicle for attracting new prospects and converting prospects into clients.

Why is this? Never forget that, no matter what services we actually provide to our clients, we are in the people business. People do business with other people, something that some really big accounting, legal, and consulting firms seem to forget.

Before a new client ever gives you a dime, three things in particular must happen:

1. They must come to know who you are (which is why we do marketing). 2. They must come to trust you and your ability to address their needs. 3. They have to like you (this is the step that really big companies in particular often miss).

You may have heard of these three factors before, as they are quite fundamental to how professional service businesses in particular operate. The know, like, and trust factors are so important that you will often see them abbreviated simply as KLT.

Given the importance of the written word as a communication tool, even in 2014, you can leverage written content in order for people to discover (know) you, and come to trust your knowledge, skills, and experience. Through your writing style and the personal details you choose to share about yourself, your readers will also come to like you as they become familiar with you.

As a quick aside, don’t forget that not everybody is going to like you, and that’s perfectly OK. I’ve had plenty of tax resolution prospects tell me that they won’t hire me simply because they don’t like me because of my personality, and I’m fine with that. I know that I have a bit of a “quirky” or “colorful” personality, and there are certain personality types that I simply do not get along with — I don’t want them as clients any more than they want me as their representative.

I allow some of my quirkiness to come across in my writing — I’m not trying to hide it. It’s part of who I am, and I don’t want to work with people that are going to have a problem with that. You should do the same in your own marketing, and watch as you start to get …

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