The Modern CPA Success Show: Episode 6

You can’t do great work if you don’t have great clients, so we are sitting down with Adam Hale, one of the owners of Summit CPA to talk about the essential parts of the sales process. The sales process is about laying the foundation for long-term relationships that you can build on for years to come.

In this episode, we talk about how Summit CPA structures its sales process to determine and meet the needs of our clients, so we can bring them value for the long haul.

Jamie Nau: Hello everybody. Welcome to today's podcast. I can't believe we are six episodes in and we have not talked about the sales process yet. Obviously this is a very important topic. You can't do great work if you don't have great clients. So today to talk about this topic we have one of the owners of Summit CPA, Adam Hale. So Adam, what to you is key to the sales process? Let's dive right in and talk about it.

Adam Hale: Well I mean before we do, let's just break it down a little bit. You've got the marketing side, and then you've got the BD side, business development. So the BD side, super easy, because as it relates to selling the CFO services once you get a good rhythm on who your client is, and what you're doing, that part of it is super simple. I'm not going to dive a whole lot into the marketing side because quite frankly, I'm not the expert. You know we can we can get Kelly, our marketing director, in here on a future podcast, and she can kind of talk to you through the difference of you know, whether you want to do pay-per-click advertising or build up content. But I can tell you just from a general standpoint, what we typically try to do is we sell through education. So rather than doing a whole lot of sponsorships, or being in booths, doing a lot of mailers, and stuff like that, we try not to be sponsors and do a whole lot of that kind of advertising. What we're doing, you know, if it's in your community you're just going to do some grassroots stuff working with commercial lenders, that kind of thing. But again what you're trying to do is position yourself as the subject matter expert, not as a sponsor. Not trying to do sales. So what we do a lot of times is we just educate our client base. We tell them exactly what we do and how we do it. Give away as much information as we can because you know, the reality is, that information's out there, It’s on the Internet. People can buy tools to get all these amazing KPIs. It's just whenever it comes down to using the information. So taking that data and turning it into information is a difficult process. And so that's what kind of our role is. And that's why we're not fearful of giving our clients all of the information. So on a front end, trying to get him in the door. Like I said. It’s more about education and being that subject matter expert than it is sponsorship or sales per say.

Jamie Nau: Let's dive into that a little bit more. You talk about being the subject matter expert. In order to do that, do you have to have a niche? Do you have a vertical you stick to? Is there a way to do it other than having that vertical?

Adam Hale: Yeah that's a great question. And a lot of the firms that will coach, that's the first thing we try to do is say, hey do you have a vertical? And by that I mean an industry that you work with more than one or two of you know. And something that you're passionate about because I think that's important too. So if you really hate manufacturing but you have five manufacturing clients, it might not be the best vertical for you to go into. Right? It's got to be something that you enjoy doing. And then once you've been able to talk to two, or three clients, and really get to know their business, you really understand the vernacular. So you're using the same terminology, you're talking through similar issues. And it's really easy to become that subject matter expert once you've had a couple of those clients and you've you know kind of dug in. So yeah I can tell you that, you know, in terms of being able to charge fees, like higher fees, having a niche definitely goes a long way. I mean that's just a fact. You're more valuable if you have specific institutional knowledge about an industry and you can leverage your experiences, and that translates into higher fees when it comes to the client side. That said, you know, in what niche also allows you to do, something we talked about before, was being distributed. Having clients that are nationally, you know, having them all over the east, the west coast, north or south, doesn't really matter if you have a niche you can just kind of go after everybody. If you decide you just want to focus on small businesses you kind of have to frame that out a little bit. You can be industry agnostic and still kind of pull this service off well. It's just now you're going to be wanting to focus your marketing, and all those efforts on a more geographic or regional level. You know those will kind of be the key differences. Again you can go both paths. You just need to kind of figure out which one's going to work best for you.

Jamie Nau: Yeah I think the key part you recommended there is the terminology. I know we've made this mistake before. When you walk into an event with all these people that are in the industry every day, and you're using all the wrong terms. You're using all the terms that just don't make sense to them it definitely takes away from your credibility. So you kind of have to understand the industry. You have to be talking to people in the industry quite frequently to be able to really talk about those right points and say the right words in order to establish yourself as that experts. That's super important.

Adam Hale: Absolutely. Knowing their pain points is huge. And if you can drop in those terms, then people are like hey, you get me. You know if you do a lot of restaurants, you go and you're talking to somebody, you're talking to the owner of the restaurant and you don't realize that's who you're talking to, and they're like oh, you own a restaurant? It's like, no I just help a couple of people run them. So you understand that, and people really take a liking to that, and I would say most of the time whenever we do have clients, one of the first questions they ask us, and I'm sure they ask every other CPA firm out there in the world. They ask, do you have any more people that are like me? You know because, at the end of the day that's what customers want. They just want to know what everybody else is doing just to make sure that they're not an outlier. They're doing things the right way. Those kind of things. So it's a good starting point. It’s definitely our preferred method at Summit, to be more niche focused. But you know, like I said, there's ways to also do it if you're industry agnostic as well.

Jamie Nau: I think another added benefit there too is when you're serving the client, and I think a lot of companies have come to us for this reason alone. We can say yeah, we work with 30 other clients that do something similar. We're able to add tidbits when we're working with them to say, I see another client do x, y, z. Have you thought about doing that? And you are able to bring that stuff to the table, which they really do appreciate. Again you don't want to like say, I have client x, y, z, that does this. You can't really call them out like that. But, if you see things over and over again, that you're working with one client on, you can definitely add that advice as well. So that's another good thing about having that vertical.

Adam Hale: Yeah. Pro tip: do not mention your other clients name to your client. That definitely would not be good. To your point though, I mean, it goes a long way and they respect your opinion and your advice a lot more, because you say well, I've seen it work this way. I've seen it fail this way, you know, this is kind of the in-between, that kind of thing. So I mean, and that's really what we're doing with our accounting firms, and you know we've been delivering this type of service for a long time. So that's all we're trying to do. We're like hey, this works, this doesn't work, that kind of thing. So beyond the marketing effort, and getting people in the front door and that kind of stuff, you know it really starts with just identifying who your ideal customer is. I can tell you for us, you know, just in the back office, you know some people call it BOSS for: Back Office Support, or CAS for: Client Accounting Services. We call it the CFO services and there is a distinction there. I want to be clear there's doing the accounting work in bookkeeping, and then there's doing the advisory work. So there are those two definite divides, and they require sometimes a different customer, and sometimes also you know, different people on the team as well. But in general, just to kind of walk that back. An ideal client delivering this type of service is going to be roughly starting right around a million and a half dollars, all the way up to 250 million dollars. And I know that seems like a super wide band, and it definitely depends on whether it's construction, or manufacturing, or service based. Obviously a manufacturing client is going to have to be much larger than, you know, that's not comparable to a million and a half dollar service base, you know it's probably more like a 10 million dollar manufacturing company. But in general, under 50 million dollars, not a whole lot of small businesses have a dedicated CFO. What I'd also say though, is that optimally you would be between 4 and 20 million because of that one and a half mark. They're still just a little too small, and we definitely do not want to be their biggest expense on their income statement. So right around 4 million dollars is whenever a lot of small businesses start to feel the pain of either trying to have their accountant be a controller, or their controller trying to be their CFO, and they're just not translating to advisory services. And then once you get over 20 million dollars, you will start to find, even if they're not the perfect fit, you'll start to find that there are CFO type roles from that 20 to 50 million, and a lot of times what we'll do is we'll play that FP and A role where we're doing the financial planning and analysis, we're supporting the CFO and becoming that, I don't want to say controller because it's more than analysis, but you know as companies start to grow the CFO becomes more than just like, a numbers person. They're usually kind of out of the numbers. And so we're really kind of backfilling into that role from that 20 to 50 million dollar rule. So I know, big range. But the cool thing is that means there's a ton of clients out there for every CPA firm.

Jamie Nau: Yeah. And I think the important thing there too is that, when you are working with those clients I definitely agree with Adam. It's like that 4 to 20 million dollar range, you really feel like you're adding value. And so I think at any level, even if it's at the 1.5 up to the 50 million, you want to make sure you're adding value to the clients, because the second that stops happening they'll see it, and they'll notice it and they will be like, oh wow, we are paying you all this money and you're basically just sending financial statement our way, every month. We could hire a bookkeeper to do that. So I think that 4 to 20 million dollar range is where there is a lot of areas for us to add value. They don't have someone in-house doing the CFO. They don’t have someone who's helping advise them forward. So I do think that's a great range.

Adam Hale: A lot of these clients at that revenue size are paying a third party accounting firm anywhere from 20 to 30 thousand dollars a year, and they're getting exactly what you just said, not a whole lot of value. They're getting financials, they're getting a year in tax return, and that's the reason why whenever you look at NPS scores for accounting firms it's so low. You know, we're almost at the world class rating, and that's because we're delivering a service that's got a lot more value added to it. So you know, you can double or triple your fees, you're going to be doing more work, but it's going to be more sticky value added work rather than you know, the month end close and things that the client would shop you for in a heartbeat. You know especially if a firm like ours came along and said, we can do A, B and C for you as well. And it's going to cost you twice as much. So that's you know from a revenue standpoint. So if you're just like assessing your initial book of business, like that's a good starting point. I would say kind of dig a little deeper, you know. you also want to find a client that has a need. We've all been there where you know clients doing really well. They don't really need our help. They don't think they need any help anyway until things go down. That's what's kind of also cool about our service. I don't want to say it's recession proof but, you'll have a tendency for these clients to want to come and listen to you a lot more whenever things are a little bit more turbulent. So a lot of times where we started off as, we just looked for clients that had a need they're scaling, maybe they're grown really well, and they just need somebody to kind of manage that growth for them. Or maybe they have cash flow problems, so they need cash flow management, or they're just trying to figure out where they want to be in the next three to five years. You know that kind of thing, because our primary focus is on the forecasting and helping to clarify direction. So I think step one is to look at the revenue bandwidth. Step two, see if they have a need. See if you can identify what that need is. That'll be a pivotal one during the quoting process. And step three, that I think is super important Jamie, is like just making sure that the client is available and open minded. Right? Like if you just want me to crank out your taxes and put together your financials, I'm not asking for your opinion. You're not asking for mine. I'm not giving a whole lot of feedback. Take it, or leave it. Let's go. But this one you know, we're really augmenting their team. And it's important that they listen to us. I mean they don’t always agree with us, nor do we agree with them, but we're always having that conversation. So the client has to be available. If they can never make a meeting well, I mean, we'll flat out just tell a client, in this service you need to meet with us twice a month. In this service you need to meet with us six times a month and if you can't do that, then I can't provide value and I wouldn't hire us. You know, so being available is important. And then just making sure that you have a good partner on the other side that's going to value your opinion. That one's sometimes a little harder to uncover, you know, because they come to you with such a strong need. You've got to really be careful balancing the two of those because you know, like I said, somebody will come to you like they're scaling, and they're like oh yeah, I'm going to listen to you. Oh yeah, I'll be there. Cash flow management, same problem. But they just keep digging the same hole. So I wouldn't bypass that one, and what I'm saying by that is just, that one you might want to spend a little bit more time in the BD process, just kind of you know, draw a line in the sand with the client there just saying, hey I just want to be up front. Like this is how I operate. This is how I add value. Clients really respect that I think,

Jamie Nau: Yeah I think that the two things there are, the first thing is, a lot of times you can tell that during the onboarding process, but you can't tell it during the sales process. If in one of those weeks, and our onboarding takes anywhere from six to eight weeks, if in one of those weeks you're able to just have a free flowing conversation with the client without a lot of notes, then that's probably a good client for this service. Because a lot of times you just want to talk. You just want to say okay, what are you thinking about this week? What are your big concerns? That conversation doesn't just last five minutes. You want that conversation to last an hour and you are able to freely talk with these people and have those conversations because that's where the value comes in. You don't want people that come in close minded, either way, they know what they're doing. They just need you to do the books for. That's probably not a great VCFO type client. So that that's the first thing you mentioned that I wanted to expand upon a little bit.

Jamie Nau: The second thing, which I think you talked about briefly but I want you to expand on it a little bit more, is early on you're going to be tempted to take clients that only meet half this criteria, and those are the clients they're going to be your biggest pain in the butt. So can you expand on that a little bit, on why this criteria is important? And why it's important not to just do the money grab of okay, this client isn't a great fit, but we're going to take them on anyway because we need some clients. So can you expand on that a little bit?

Adam Hale: Yeah I mean it comes back to, you know, at the end of the day even though we do a lot of marketing, and you can do a lot of grassroots stuff, we do still get a lot of our clients from referrals. So it's really important that your reputation kind of precedes itself. And if you're just going after these people that don't fit your culture or fit the parameters that you've set for yourself when figuring out who your ideal customer is, it's really hard to set process, first off. You know the delivery is really going to be based on making sure you have an efficient process in order to kind of deliver this type of service. You get people out of this bounds like people who don't make meetings, or people that are outside of your niche or your vertical. It’s going to be very difficult to really nail that down and expand and grow and scale your business. So that part's difficult. But then on the backend, we've always found that something is you know, hiding in the mist, and it surfaces and whenever it surfaces, it just becomes apparent that it's not a good fit. And really for us it's about a long term relationship. You know, this isn't like, let's crank out a tax return deal with somebody for a month or two. It's about delivering this service and being a part of this customer's business cycle for years to come. And so just like any other long term relationship, if it's not a good fit then, you're just better off not wasting either person's time. Send them to your competitor. Like I said there's plenty of these folks out there.

Jamie Nau: Yeah. I think this is the hardest part in the sales process. It has to be a two way street. And I think that's something that again, it's really hard to do, and it's something that I appreciate that Adam, and Jody do. I think if I was running my own company it would be a lot easier just to be like hey, this guy's going to pay me a hundred thousand dollars a year to do this. I don't care how bad it is. I'm going to take it for the first three months until it works. So I think it's something that's really hard to do. But I think it is really important because you want clients to be the right fit for you, and for the services you're providing, and we try really hard in our sales process to do that.

Adam Hale: Well that’s learning a lot. So that's what we're talking about earlier. Just kind of sharing best practices. This is one that we learned the hard way. And like you said it's not perfect, but it's one that if you're really diligent about the sales process, and try to be super upfront it goes a long way. It's just like when hiring a team member. You know, you can kind of get the same feel. The same reason why you would vet them fully and not have somebody that’s not going to be a good fit. It’s the same reason why you wouldn't want the customer. So, and trust me, when we were smaller we did, we would take just about anybody. We're like yeah, they're going to pay us. And some of it might have been greed I guess, but a lot of it is just ego. You know it's pride. You think I can help this person. I can fix this person. Sometimes not. So you're better off just kind of like, again, just setting those boundaries early. Tell them what you can do and can't do, and just getting on the same page super-fast.

Jamie Nau: Yup. So real quick I want to throw our email address out there. We're always looking to improve this podcast. If you of any topics for us or if you want to be a guest always feel free to e-mail us at: cpa@summitcpa.net. Again we'll take any kind of feedback, or topics, or anything we can do to help. So again that email address is: cpa@summitcpa.net. Appreciate any feedback we can get from the listeners out there.

Jamie Nau: So Adam, I want to turn the turn the tables here a little bit, and talk about our sales process directly. So if we went into a presentation for someone we met, and they are a perfect fit for us, what does our sales process look like from there?

Adam Hale: Yeah. Typically somebody will reach out to us via email or our website. We already have our Calendly up on the website. So somebody comes in, they'll schedule a time to connect with either Jody or myself, and then whenever we get on the call, first thing we do is we just have a conversation. It's just a fit conversation. We're just kicking back, relaxed, and talking about life. Just kind of getting a feel for you know, if we'd be a good fit for one another. Then we're asking why they came to us, what they were looking to solve for, you know, tell us a little bit about the history of their business. So we'll spend probably, of an hour conversation, we'll spend 20 - 30 minutes just getting to know them and their business, and everything else because, what that's doing is that's allowing us the opportunity to go ahead and give them a good start on what the quote will look like. So I think what's unique about our services is you know, you hear a lot about value based billing, and everything related to that. We value based on the actual item or the service. So it's not the overall package, meaning specifically we value based financial statements. We value base forecasting. We value base our CFO meetings. We value based doing payroll, doing AP, all those things individually. We have a price. Now we have some things that fluctuate that based on the number of employees, or the size of the company that will kind of you know, make those all go up or down. But we made sure that whenever we do that, that way the client can have our core services of two or three things, and then they can just add on everything a la carte. The power behind that is, there's no like, have you ever felt like whenever you go somewhere you're just like. they're just pricing me out by my ability to pay. You know, the car dealer he's like, well how much do you want to pay? I don't know how much is it? We take all that out of the equation. So it's not like that at all. What we do is we put our quote right up in front of the customer. Now based on our conversation, I'm going to lead you a certain way, right? Because I already can tell you need this, you need this, and you don't need this. So I'll go ahead and show the first option, and we'll show you three or four options on the call, and I'll walk you through and I'll say, based on the conversation I think you said you need this. You don't need this. And they're like, well no, maybe I do need that, go ahead and turn it on. You know those kind of things. So we'll walk through this really cool layout of how we have all of our pricing in there, and at the end they'll be able to see what their own weekly fee is. And then so you know it's just like asking what their budget was at the beginning. How much money do you want to spend? I don't know how much does it cost? You know that same kind of feeling. Well this is where you get to gut check it. So whenever they built it. It’s everything they want, and it's one hundred and ten thousand dollars, and they're like well, it's kind of out of my range. What if I could do this myself? And do this myself? And it's like, okay cool. I'll show you how that is. Oh, you want to add taxes? You don't want to do taxes? You know that kind of thing. And we'll build out three or four scenarios right in front of them. And so now they've been able to build themselves a small, medium, and large kind of a plan, and prioritize what's the most important thing to them to get out of our service. So I mean that's pretty powerful to let the client pick their own price, and be able to do it in full transparency right in front of them. They leave that first call feeling good about our abilities and our understanding of who they are. And then also what services we're going to deliver and exactly how much it's going to cost. We do everything on a fixed fee. It’s just weekly, we ACH it right out of their account on a Monday. You know that kind of thing. So we do have an onboarding fee, and an onboarding process. You know we can talk about that another time. But the whole thing's built out right there in front of them. And so post-call what we do, is we just send them a quick screenshot of that. We're like hey, here's the screenshot you lean in a little more towards Option, here's a couple quick differences. We have a white paper on our services that they can kind of look at and kind of think more about, and then we put our phone number and our calendar link if they want to connect with somebody else on the team, or interview one of the CFOs or you know, they have a couple of different options. But we do that immediately following the call. Within that same day we make sure that we get that email out, and we get a really good response rate to that. Very infrequently will we ever get ghosted on that last.

Jamie Nau: Yeah I think it's what's unique about the process, at least my opinion and what I've seen, is that they get the price so quickly. I think a lot of times people come and talk to us saying, I've been involved in a number of sales calls. Their expectation is it's going to take two to three meetings before they even know what how much we cost in general. And so the fact that we pull that spreadsheet out to where we're toggling through the buttons like Adam says, and again going back to the right fit. That's important to us. The last thing we want to do is put a client in a package A, when they really need package C. In the long run that client is not going to be a happy client. So getting them in the right package is important to us, and we can tell that on the call. But the fact that they have numbers in front of them within 30 minutes of the call, I think is a big difference between what we do, and what a lot of people do, because you can always see the surprise on people's face like, oh okay, well we already got an idea of how much you cost. There's really not a lot of back and forth in that part of the process. I think is pretty unique.

Adam Hale: Yeah the money part of it sucks. So I mean that's the hardest part of any sales process, right? Like I can sell anything to anybody. Just don't make me charge money for it. Yeah. So that's always the most intimidating part of everything. So being very transparent and upfront, and giving them the flexibility to like I said, just shuffle the deck and prioritize what they think is the most important features. It's huge. I've had so many clients get on there and say well you know what, I guess I can do this this and this. But then what we also let them know, is that we don't work on an annual contract. We work month to month, and we learn our value kind of speak for itself. And so we're in it for the long the long haul, and that means that they can also shift up and down into these packages as we grow the relationship. I can tell you for instance, we start off with probably 50 percent of our tax returns, like we prep 50 percent because they might have a solid relationship with the tax preparer already, or they're feeling ok with that part of it, and they just don't want to put everything all into one place. By the time we get out of onboarding, in six to eight weeks, they're like, how much was it again to add taxes? Why didn't I do taxes with you again? Because they get to meet our tax team and how involved we are. They're super impressed in the delivery. We do taxes for like 85 percent of our clients. So we pick up almost all the rest of those, the very few that we don't, some of those come at year end, you know the next year. Or some of them just don't ever end up switching because they're in ESOP, or you know they have their uncles brother who does it and has for 30 years. You know, that you're not ever going to penetrate those relationships. But like I said, it's pretty impressive whenever you see that, and so many times too we'll have a client start off with a lower service, and then inside of our select channel we have a fee adjustment page. I'm constantly seeing that thing move. Like such and such is bumping up, we're going to charge you 300 extra bucks a week, you know, that kind of thing as their needs change. Clients like that flexibility, and knowing that they can grow with us too I think.

Jamie Nau: So one final question for you Adam, and it's something I've never talked to you about so I am interested in your answer on this. So Summit does something unique. In that our CFOs, who are kind of like our partners, or our senior managers, have no sales goals. They have no sales expectation. They don't have any sales requirement, but at the same time our sales process is so easy that anyone can do it. So we have kind of that easy blend where like, when I was a CFO I didn't have to do any sales, but occasionally I would jump on a sales call and I could handle it just fine. So there is kind of two elements to that. So can you kind of dig into that? On why we are set up that way? Exactly what the thought process behind that is?

Adam Hale: Yeah again, it's just the difference between BD and marketing. So we have such a marketing funnel. We've just put in, and we've worked really hard at it for the last 10 or 15 years just blasting tons of content out there. So and then going to these speaking engagements, and being a subject matter expert that we really don't need, feet on the street, going out there and trying to knock on doors and bring people in. I mean like we don't need you to be a hunter if you're a CFO necessarily. That doesn't mean that you can't join your local Rotary Club or get into some kind of things. You know, I mean like, definitely leverage your local contacts, especially if you have CFOs in all the different cities and stuff like that. We incentivize our team. We give them 10 percent of the first year revenue if they bring somebody in. But it's not a requirement. You don't have to do that with us because we have the funnel already in place. But we do want to make the tool easy enough so that you know, if Jody and I aren’t available you should be well versed in everything we do. You should understand how much we charge for it ,when things are in scope or out of scope, how to adjust things, because all those fee adjustments that we're talking about those are all handled by the CFO. So the CFO knows like hey, the client's going to need me to really step up and do a, b, and c, or their bookkeeper left and they need us to handle bill paying, cash flow management. So we don't want you coming back to us and starting the whole sales process over again. It's just we wanted you to be able to go into the tool, select two or three things that they had originally turned off. Add them on. See what the price difference is super-fast and go right back to the client and say yup, we can do that. Here's how much it is. And then we re-engage and go with the new dollar amount. So it was just about making it super simple. Again, we don't need you necessarily hunt. We just need you to understand what you're delivering, how much that is, and where the opportunity is to grow the services with the client. That’s super important to us.

Jamie Nau:Yeah, I think it's great. I think in the interviewing process and the hiring process for a CFO this comes up a lot. I think a lot of people just come in with the expectation that they're going to have a sales goal. That they have to sell X number of clients, and once we tell them that they don’t have sales goals, some of them are a little disappointed because they actually like that part of the process. But some of them have a big smile on their face, and are like, all right this is where I want to work because they don't have that expectation and the pressure that comes with it. So it's always been a really nice part of the hiring process for me when I interviewed people, to have that conversation because you can always see where their mind goes when you bring that up. A lot of time it takes the pressure off.

Adam Hale: Yeah and I would say that's probably unique to having that niche and being more national than local, you know that kind of thing. I think that in some instances the BD part of it might be a little bit more on the CFOs. If you're just kind of industry agnostic and working in a local region, you know, you might have to get on the board of a couple nonprofits and work some leads groups, things of that nature. Those things are all good. Like I said, we don't tell our team they can't do those things ,but we have a very specific client profile. And so for you to go and get that exact person it's going to be a little bit more difficult than maybe a traditional firm.

Jamie Nau: Yeah, definitely. All right Adam, so we're right up against the clock here. Any questions I didn't ask, or topics that you want to touch on before we close the podcast?

Adam Hale: No man, I think we went through it all pretty well. Like I said, we can kind of go through a little bit more on the quoting and onboarding process another time. We can definitely get Kelly in here on the marketing side. I think a lot of people would like to hear more from her on what she's doing, and how she's kind of helping us get the word out.

Jamie Nau: Yeah, and I really appreciate your time today. Thanks for joining us.

Interested in reading more about how to create a profitable CFO practice? Check out Jody Gruden's playbook: Building the Virtual CFO Firm in the Cloud.