strategy and tactics

Coffee with a colleague last week reminded me of how frustrating it is to have a great offering that’s inexplicably resistant to gaining traction. Mike’s firm reduces costs by optimizing procurement–he figures he can save most companies at least 20%. His firm has a great track record, he gets paid only from the resulting savings, and doesn’t disrupt client operations. It’s as close to no risk as you get.

Potential clients get this, but Mike wants a bigger footprint with referral partners. CPA firms are perfect, but Mike’s not getting traction. He’s got a plan and is doing all the usual things–presenting for-credit CPE classes and meeting with partners–and yet, he feels like he’s climbing an icy incline.

Mike knows people make decisions emotionally, then use logic to justify their decision. However, as a green eye-shade type business, procurement optimization appeals to logic far more than emotion. Saving money is always a good thing, but except in cases of distress, it’s rarely an urgent need. To the client, the opportunity will still be there next week, month, or year.

How Can Savings Not Be Benefits?

I’ve learned from my own work that in situations such as Mike’s, the big, emotional win isn’t generating raw savings, it’s putting that savings to work. To tap an emotional response, the savings must be earmarked to do something: drop as profit to the owners for personal needs, fund growth internally, or pay off debt. The best practices that lock in the cost savings also provide more time for firm leadership to be strategic and think about the future–that is to put the savings to productive work. The cost savings aren’t the real prize, but rather the means to a much more important end.

This shift from a tactical to a strategic discussion makes Mike’s services more attractive to potential CPA partners, but alas, isn’t enough to generate the strong referral flow Mike knows in his heart is out there. He needs one more component.

Anatomy of a Referral

A quick detour into the anatomy of referrals and recommendations is in order. What drives strong recommendations is making the recommender look brilliant. Referrals that benefit a client tactically only appeal when the client feels urgency. Without urgency, the client is unlikely to follow through, so there isn’t much upside for the CPA to expend social capital in recommending Mike’s firm.

By contrast, strategic recommendations highlight the CPA as a smart and valuable advisor, and demonstrates alignment with their client’s overall business interests. If Mike delivers, the CPA looks great, but without evidence credible and relevant that he can and will deliver, the risk to the CPA is too high. He’ll politely nod, but nothing more.

Mike has to get the ball out of his court.

I suggested to Mike it’s time to stow the shotgun and break out the rifle. He’s better off targeting a single partner per firm, and working together to notch an initial win. With a client known to the firm providing credibility–and tipping their cap to the CPA for being a valuable advisor–other partners will seek Mike out to learn whether his solution is right for their clients. Only at this point does the conventional strategy of brown bags, CPE, and introductions to other partners become effective. Mike will sand the icy incline.

It can be frustrating when clients resist seemingly obvious benefits. My suggestion to counter-intuitively shift the focus from the tactical and logical to the strategic and emotional ties the benefits to the broader goals of the firm and its owners. Mike’s firm becomes a critical path item for important, tangible, and personal results for both management and the CPAs who advise them. The cost savings Mike delivers get re-framed as the means to an even more important goal.