Cross-selling Hasn’t Worked

Reprinted with permission from Accounting Today

‘Land and Expand’ Instead

Accounting firms are short on resources and are actively seeking ways to address the deficiency. Many are pruning their rolls, culling unprofitable or problem clients. Others are taking what I consider a highly questionable approach, one that was in vogue 20 and more years ago. 

I’m talking about cross-selling. Sounds like a motherhood-and-apple-pie concept, but it’s fraught with issues, which is why its failure rate is high.

I learned this the hard way when I introduced into one of my first mid-market CPA firm clients an account strategy session method, which I had learned selling in the large accounts division at IBM. Once a year the sales/systems engineering team would brainstorm ways to increase revenue by expanding our offerings for a particular client. We recognized that without achieving a deep understanding of the decision-makers and decision-making, we were unable to expand our reach and revenues. This required a strategic focus on the power and politics of C-level executives, not just on solutions we believed would be of interest. 

During the account strategy session, I observed that the team kept reverting to a tactical cross-selling discussion around the services we should sell. When I attempted to level up the conversation to the role of power and politics, it became clear that the sole relationship was between the lead partner and the CFO. 

In such situations, if the CFO is not interested in a particular service, there’s nowhere to go. The way to avoid dead-ending is to also forge relationships with the owner, CEO, director, COO, CIO or others. That way, recommendations rejected by the CFO may still receive consideration. 

Do This Instead

Getting a handle on power and politics can be a heavy lift for many partners. However, in the corporate world, land-and-expand, as it is known, is a well-known approach. It is a systematic, focused means of growing larger accounts by strategically cultivating multiple C-level relationships, then matching needs to solutions by applying your knowledge of hidden agendas and influence among decision makers. 

It is managed by dedicated account executives (AEs) who are paid—handsomely—based on the revenue growth in the account. They have a skill set much prized in the corporate world. Land-and-expand is considered the highest level of strategic solution selling involving human motivation and interpersonal dynamics. 

If hiring a dedicated professional to optimize revenue among strategic clients is not in the offing, it is possible to help an existing partner become a highly effective AE by teaching strategic solution selling skills and reducing their chargeable hour load to provide the needed capacity. The leverage is significant, as revenue can exponentially exceed an hourly billable rate. 

Breaking Down the Wall

AEs who are financially rewarded for driving large-client revenue are motivated to bring in others. This helps break down the wall of resistance among partners who consider clients “theirs.”  That proprietary thinking is the other big reason cross-selling has long been unsuccessful. Partners highly protective of their relationships may question the ability of any another partner to do right by their client. The thinking is basically, “No worries, I’ve got this.” 

In many firms today, it’s often perceived by other partners that it’s easier to seek out new clients than to crack the hard-headed nut, i.e. the partner who resists reaching beyond their comfort zone and experience to uncover opportunity. (The one who answers “NO” to expanded services like wealth management, business valuation, international, tech or tax credits!) AEs, on the other hand, see accounts as belonging to the firm, not to them. 

Landing and expanding is a proven strategy that can help accounting firms deliver high-demand, profitable services.  At a time when resources are scarce, it makes sense to identify clients that represent the highest potential for the most profitable firm revenue growth. Culling the bottom frees up resources, but cultivating the top is the way to the most efficient revenue growth! 

Copyright ® 2024 by Crosley+Company

Gale Crosley, CPA, CGMA, consults with accounting firms on revenue growth. She was awarded the Advisory Board Hall of Fame, has been selected one of the Top 100 Most Influential People in Accounting by Accounting Today for 17 years, and one of the Most Recommended Consultants in the Inside Public Accounting BEST OF THE BEST Annual Survey of Firms for 16 years. She has helped almost 500 mid-market CPA firms achieve exceptional revenue growth over the past 20+ years. Gale is an honors accounting graduate from the University of Akron, Ohio, winner of the Simonetti Distinguished Business Alumni Award, and is an Editorial Advisor for the Journal of Accountancy.  She can be reached at gcrosley@crosleycompany.com.