Earlier this week, I wrote about your revenue goals for 2013, and posed two questions in particular:
- Have you made all the money you need or want to make for 2013?
- Do you have a written plan in place for hitting your 2013 revenue goal?
If you’ve hit your revenue goal for 2013, or are pretty close and can “cruise” for the rest of the year, then congratulations. Enjoy that mojito on the beach, and have one for me!
If you’re still reading, then I’m assuming you have NOT yet hit your revenue goal. In that case, question #2 becomes much more important. The key to hitting a revenue goal is to have a written action plan for getting there.
It’s often said that the only real difference between dreams and goals is that goals are written, have a specific deadline date, and a set of action steps for getting there. No matter what the goals, if it doesn’t have an action plan and a deadline, it’s simply never going to be reached.
When we’re talking about hitting revenue goals, and formulating the action plan for reaching them, it’s important to review the three means of increasing revenue. These three factors are the only fundamental ways for a business to make more money:
- Increase your number of clients.
- Increase your average fee per client transaction.
- Increase your number of transactions per client.
That’s it. Those are the only three ways that exist for a business of any sort to make more money. Your written plan to meet your revenue goals needs to incorporate all three.
Let’s consider them further in reverse order.
Increasing your number of transactions per client is quite simple. Your clients already consider you a trusted tax expert. As such, they will use your services (or your recommendations for services) for other needs that they may have. Tax professionals should consider offering a variety of additional services that their business and personal clients will find useful. These need to be offered within a cohesive strategy that makes sense for the direction of your practice, but here are some general ideas:
- Business valuation
- Taxpayer representation (my personal favorite)
- Financial planning/wealth management
- Insurance services
- Tax planning
There are many tax resolution firms that do not offer tax preparation or payroll service, and the three simply go together like peanut butter, jelly, and bread. Doing high dollar value audit and collections representation, which is a nice niche specialty in which to do highly targeted, aggressive lead generation marketing, is perfect alongside wealth management services. Specialized bookkeeping and tax preparation for real estate investors, combined with property tax valuation dispute services, also makes a nice combination.
Action Question #1: What is your CORE service?
Action Question #2: What package of services could you offer that complements your core service?
Next, let’s discuss your average fee per client. I’ve discussed fee structures extensively in the past, and the bottom line is this: If you haven’t raised your fees in years, it’s time for you to do so. If you’re not making the kind of money you want, the first thing you should look at is your fee structure. You’ll simply never make $500/hr if your hourly rate is only $125/hr.
If you have several year’s worth of fee increases that you’ve missed, you’ve got two different routes you can go. After analyzing your revenue and expenses, and deciding where you want your fees to be, you can either do it all at once, or phase it in over the next few years.
A substantial fee increase at one time has the benefit of helping you to fire clients that you no longer want. Instead of being afraid to jack up your fees, look at it as the opportunity to get rid of clients that, for some reason or another, you simply don’t want to service anymore, but haven’t had the heart to tell them. Just explain that you’re increasing fees, and refer them to a colleague if they choose not to stay with you.
Personally, I suggest implementing fee increases all at once. But if you need to phase them in, then don’t forget to add the current fee increase, plus the fee increase you’ll need to add next year for inflation or desired growth. If you’re phasing in a 30% increase over three years, but also want to raise 5% per year each year ongoing, then you actually need to increase fees 15% for three years to catch up, then 5% per year thereafter.
Lastly, let’s look at simply getting new clients. The vast majority of information on this blog has to do with the subject of lead generation, so I’m not going to talk about new stuff on that topic. Instead, I want to cover today a few items about improving your lead generation.
If your lead generation campaigns aren’t getting you results, here are some things to consider:
- Do you have an organized, consistent prospect follow up system in place?
- Are you contacting leads more than once?
- Are you making enough contacts to make statistically valid determinations about the effectiveness of a mail piece, phone script, media, etc?
- This is the biggest mistake I see people make. You can’t mail one postcard to 200 tax liens one time, get zero responses, and say direct mail doesn’t work. It’s too small of a test to make a valid determination.
- Are you contacting leads through multiple methods, such as by direct mail and telephone both? (Refer to the 72 Hour Blitzkrieg Marketing Blueprint you received when you joined our email newsletter.)
When it comes to lead generation, tracking, testing, and measuring are the name of the game. Track everything, but also do enough of the thing to make it a valid test.
For example, what’s a minimum mailing for determining whether a direct mail campaign is effective or not? There are a number of rules of thumb about this, and an entire field of statistical analysis in mathematics that studies. Classic texts on direct mail suggest a minimum mailing of 2,000 pieces in order to get any sort of measurable result. My friend and mentor James Orr uses a rule of thumb based on dollar expenditure: $500 minimum to effectively test any mail piece.
Mathematically speaking, it’s hard to make solid determinations about any campaign, piece, media, method, or script until you’ve received a minimum of 200 “replies”. This could mean reaching 200 people on the phone, receiving 200 inquiries via the mail, 200 visitors to a web page, etc.
When I test a new postcard, I don’t make any determinations regarding how good or bad it is until I’ve sent at least 1,000 of them, which will cost around $400. Even then, my determination wouldn’t be considered statistically valid by mathematical standards.
What if you don’t have that many addresses to mail to? For example, what if our tax lien service doesn’t provide enough data for your area or criteria? Remember, our service is meant to provide the most current data possible across as much of the nation as we can cover and still keep the service affordable. That means we’re unable to cover certain areas due to the expense.
As such, you may need to expand your search criteria, or supplement our data with data from other services, such as ClickData.com. While other services are more expensive, having a bigger list to test your mailing will make it more statistically valid for comparison purposes. You can also mail and call more frequently to a smaller list in order to saturate that list with your marketing in order to maximize response from a smaller list.
This isn’t meant to be a stats class, so I hope that you get the general idea. Bottom line is that you must mail a single piece to enough people, or send enough stuff to the same list, in order to properly test the piece or the list.
Take a look at your 2013 action plan, and consider how various combinations of new services, fee increases, and lead generation tweaks will help lead you to your 2013 revenue goals. These sorts of actions should take up quite a bit of your time as a practice owner if you are trying to rapidly grow a practice.