Tax & AccountingApril 06, 2022

4 Steps to Increasing Your Firm’s Cross-Selling Activities

By: Wolters Kluwer Tax and Accounting

Growth goals – almost every firm has them. 96% of accounting firms and tax practices plan to grow in the next 3-5 years, according to a 2021 survey performed by Accounting Today for Wolters Kluwer.

According to that survey, the number one way small- and mid-sized firms identified intend to grow is by adding new business clients. But while adding new clients is a great way to grow, it comes with a cost. Adding clients requires increasing capacity, and hiring additional staff is expensive and rather challenging due to accounting pipeline issues and the Great Resignation.

Many firms are so focused on adding new business clients that they are missing a significant growth opportunity right in front of them: increasing the number of services used by existing clients.

Same Clients, More Services

Large and national firms already see the benefit of maximizing your per-client revenue stream rather than spending time chasing down new clients. 67% of large firms plan to grow through increasing cross-selling, making it the number one growth strategy. Cross-selling came in fifth for small firms and sixth for mid-sized firms.

So what do big firms know about cross-selling that smaller firms don’t?

To put it plainly: how to do it.

Many firms assume that cross-selling will happen organically. A satisfied client will automatically want to do more business with you. Unfortunately, cross-selling isn’t an automatic process—and it’s not something taught in most accounting classes either. Combined, these two factors can make it difficult to rely on cross-selling as a growth tactic.

Four Steps to Cross-Selling Success

In addition to some sales training, firms can follow these four steps to cross-sell their services effectively.

Evaluate your services and consider where to expand

Your firm needs to target the right clients with the right services to cross-sell successfully. If you’re only offering basic tax compliance services, you cannot provide much more to existing clients.

Take a look at your firm’s capacity and expertise to evaluate your mix of products and services. Are clients asking for anything additional? Are competitors offering something you don’t? Consider adding those services to your offerings if your staff can take them on without sacrificing customer service.

Advanced data analysis can help you leverage your firm’s current data to inform your cross-sell strategy by identifying service lines gaps and those that have growth potential.

Analyze your client base to identify ideal cross-selling opportunities

Once you have the right service mix, how do you know which clients to cross-sell? Here’s another area where data analytics software comes in handy. Data analytics should inform cross-selling campaigns to target specific client segments with the most relevant products and services. Examine your existing client base to narrow in on the best type of clients to target.

Two types to avoid: service demanders (clients who overuse customer service channels) and revenue reversers (clients who tend to default on payments or terminate contracts early).

One type to move on ASAP: existing clients who have asked if you’re expanding your services (as long as they aren’t service demanders or revenue reversers).

Ensure you have the necessary capacity

It may be easier to cross-sell without adding staff, but that doesn’t mean you won’t need to invest to ensure the firm has the capacity it needs. Increasing capacity comes down to a combination of business process improvement, reviewing and upgrading your tech stack as necessary, and considering where to hire internally or outsource transactional work.

Before you begin down the path of BPI, review your existing technology stack to make sure that it will scale up as your firm grows. If your tools still work and your processes need improvement, it may be time to look into business process improvement to streamline, optimize, and automate wherever possible.

If your existing tech stack won’t support your firm as it grows, or you’re outgrowing your tax software’s baked-in workflow and practice management offerings, it’s time to build your firm’s ideal tech stack. Consider implementing stand-alone or add-on tools such as workflow and practice management solutions to help reduce administrative stresses and provide the necessary visibility into work.

Though cross-selling doesn’t automatically require adding staff, consider if hiring new in-house staff makes sense for the firm. If your firm, like much of the nation, is struggling to find and retain talent, consider if outsourcing part of your compliance work or transactional accounting services would free up additional capacity to support cross-selling activities.

Ensure continuous improvement with consistent client communication

Like most service efforts, cross-selling is not a one-and-done process. Firms will want to pay particular attention to the “service after the sale.” Firm growth increasingly depends on the client experience. And, in today’s competitive environment, that means so much more than simply filing a return on time.

Clients care about the end-to-end experience: how you communicate and collaborate through digital portals or collaboration platforms, how well you understand their worries and meet their needs, and how well your firm has personalized the client experience.

 Busy season is an ideal time to consider cross-selling, especially if your firm is considering expanding into client accounting services such as bookkeeping, fractional CFO services, cash flow or forecasting services. Learn how to build a pipeline from tax prep to client accounting services by reading how to build a tax-to-CAS pipeline, and get started building an effective cross-selling system.

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and expertise that helps tax, accounting and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed and accuracy.

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