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Winning More Significant Opportunities in Today’s Environment

Recent events in the profession will continue to result in more and larger clients evaluating a potential change in their CPA firm over the next couple of years. Firms which invest in the expertise necessary to win significant opportunities have a once-in-a-lifetime ability to grow their revenue substantially. In evaluating this ability to win, I find that the chasm between business development best practices of corporate America and those of professional CPA firms is shockingly wide. The business development function in private industry started to take shape half a century ago, while professional firms launched active programs only within the last 10-plus years. Why don’t professional firms peek over the fence and learn from corporate America?

The traditional perception is that CPA firms are “different,” and thus need a different approach to be successful. It’s common to assume that business grows through referral, and the firm that convinces the prospect they are the most qualified wins the most often. This is not the case with large opportunities, which often involve numerous competitors which are also “referred in”. These situations are won utilizing optimal strategies and flawless execution.

The reality is that CPAs can adopt “best practices” in business development from corporate America, and modify them for their environment. In a book called Diffusion of Innovations, Everett Rogers sites numerous examples of cultures, societies, and groups that adapted successful strategies of their own from the models of other groups, crafting innovations necessary to be relevant in their own environments. Nowhere are these principles more powerful than the area of winning major opportunities, where corporate America clearly has something to teach. Whether firms use traditional rainmakers or hire full-time business development people, solid strategies and tactics are critical in winning these large pieces of business.

What is a major opportunity for a CPA firm? One that’s significantly larger than the firm’s average sized opportunity, or one that’s strategically important to the practice. Corporate America long ago learned that these opportunities call for an approach that’s different from the average deal. Why? Because these opportunities are more competitive and therefore generally more complex to win. They take longer to win. They require more sophisticated battle strategies.

For example, most CPAs will attack an opportunity head-on, attempting to unseat an incumbent. However, the more prudent strategy in this situation is not a full frontal attack, but rather a “fractional” strategy (go for a piece of the business), or a “flanking” strategy (change or expand the scope). Flanking can be effective in situations where the firm is strong in ancillary services, and can identify needs during the sell cycle for which ancillary services can be part of a more expanded solution. However, a word of caution. Approach a flanking strategy with a serious intention of uncovering the prospect’s needs. Too often CPAs put the solution first, then try to find a problem to match it, simply because they have a particular offering they’re trying to sell.

The specific situation will dictate the appropriate strategy, such as whether the firm is in a position of strength or an underdog, whether the prospect is oriented toward a single or multiple providers, and other situational factors. The following is an example of a losing frontal strategy when a fractional strategy could have resulted in much better odds for success. A CPA recently developed a relationship with a building contractor. He discovered that the current CPA had been performing the prospect’s traditional accounting work for years, yet had not kept up in other niches, such as technology consulting. The CPA firm possessed a strong technology and contractor niche. Instead of proposing to assist with software selection to meet the prospect’s immediate needs (fractional strategy), the CPA used a frontal approach – suggesting to the prospect that he switch all the accounting work from the incumbent, and that then he would be happy to assist with his technology needs. The prospect “went dark”‘ not returning repeated calls, which was inconsistent with his original receptive behavior toward the CPA. Unseating an incumbent utilizing a frontal strategy often produces disappointing results.

Professional firms typically attack these giant opportunities just like the routine ones, and thus, predictably, they lose more than they win. What do they do next? They scratch their heads and conclude, mostly wrongly, that price was the decision criterion. This may be true occasionally, but for the most part it is an unschooled conclusion. Usually, what happens is this: The lack of sophisticated strategy and execution on the part of the professionals allows the prospects to control the buying process and apply their own value metric to the transaction.

Due to the lack of sophistication of the buyer (in terms of assessing quality and value), and the lack of sophistication of the professional in shaping a compelling value proposition, the easiest understandable metric IS price. Price may in fact end up being the justifiable decision criterion, but it didn’t need to be, and it shouldn’t have been. If this were preordained, then every value-based vendor would have no clients – including Starbuck’s®, Ferrari®, and the highest-priced professional service firms. Most of the time a price-based decision is indicative of unsophisticated opportunity development by the professional.

CPAs are traditionally equipped to propose on a well-defined opportunity like an audit. However, exploring other potential areas of need often eludes them. My theory is that the world of the CPA is very black and white. The nature of opportunity identification is more about exploring possibilities, a skill which most CPAs haven’t practiced enough. An “opportunity assessment” questionnaire, a series of questions designed to uncover needs, can be useful in identifying additional prospect issues and opportunities related to improving a prospect’s financial operations. Without an investigatory mindset, as well as a mechanism to uncover additional needs, the CPA finds it difficult to differentiate the firm. The odds of winning the opportunity go down substantially, the value never gets properly developed, and the firm ends up in an opportunity price war.

Prospects often cannot adequately assess the technical competency and quality of a firm. If the firm doesn’t identify unique needs and communicate their approach to address these needs, the prospect has no other yardstick but price. The buying experience causes the prospect to draw conclusions about how your service will be delivered. If your firm uses the above approach, the prospect will naturally conclude that your approach toward service is comprehensive and creative. If not, the prospect naturally concludes that you offer a “bare bones” price-based service, and that this will likely be their delivery experience. The best way to communicate your value is through your actions in developing the opportunity.

Mistakes happen frequently during the process of attempting to win a major opportunity. Most of these are due either to inexperience or a lack of belief in the fundamentals required to win these larger deals consistently. When I perform loss reviews with my clients, I often find one or more of these misfires. A common error is one partner trying to win it alone. Often the wrong partner is trying to win the opportunity, or the partner is calling on the wrong buyer (not the ultimate decision-maker), because the partner doesn’t know how to get to the decision-maker. Another common mistake I see is a gang of CPAs (two or more) calling on the decision maker. An important concept in winning large opportunities is that relationship development is the foundation of increasing the odds to win. And relationships are built one-on-one, not in a group. Given that the prospect will allocate spending a limited amount of time with each potential provider, group-time cuts out a significant opportunity to build the relationship foundation. Another common mistake is a perception that the proposal is a sales event. It is not! The proposal is a historical record of all the information exchanged and discussions shared with the prospect during the sell cycle. Therefore, the lion’s share of the focus should be in a series of strategically planned, purposeful calls on the prospect throughout the sell cycle, and NOT the writing of the proposal.

Ongoing and frequent strategic opportunity planning with the best minds in the firm can increase the odds of winning significantly, but most often this doesn’t happen. As a result, the firm makes the wrong moves during the process. Moreover, there’s often a lack of awareness that every move during the process is significant. Just as in a game of chess, where a move of a pawn might appear innocuous but is part of a larger strategy, the cycle of large business opportunities has a similar rhythm. Taking the time to interpret the meaning of a buyer’s move is part of the ongoing strategic planning needed to win significant deals. I recommend a planning session immediately after the opportunity becomes visible, called an “Opportunity Assessment” session. The objective of this session is to discuss the prudence of chasing the opportunity. Four questions should be the focus. Is there an opportunity? Can we effectively compete? Can we win? Is it worth winning? Ongoing team sessions throughout the cycle are needed to share information about the prospect’s decision making process, identifying and cultivating supporters, assessing the position of the competition, and what factors will influence the decision. This ongoing input will allow the team to recalibrate the strategy.

Another problem arises when the buyer is allowed to control the entire process because the partner doesn’t know how to maintain some control. We see manifestations of this when the momentum surprisingly slows down or speeds up, the partner is caught off guard with unanticipated news, or the client “goes dark” (doesn’t communicate), and the partner doesn’t know why.

Maintaining control is often the most difficult part of the process. It involves convincing the prospect that something you want to do is also good for them. For example, audit committees are becoming much more influential in the decision process. If the operational decision-maker blocks access to the audit committee until the final presentation, the CPA has no opportunity to develop a trusting relationship with the audit committee members – important in creating a greater appreciation of the merits of the firm. Convincing the prospect why it is beneficial to meet the audit committee members before the final presentation is a good example of being able to maintain control.

In summary, CPAs who execute opportunity development using the following concepts accomplish some of the most successful wins:

  • Utilize the appropriate strategy – frontal, flanking, fractional.
  • Deploy an “opportunity assessment” questionnaire to uncover prospect needs.
  • Attack the opportunity as a team, accurately matching team members who can best influence specific prospect decision-makers.
  • Develop one-on-one relationships with decision-makers.
  • Focus primarily on well-planned, purposeful calls, not on a proposal-writing marathon.
  • Recalibrate strategy as more information about the prospect is revealed.
  • Maintain some control by convincing the prospect that something you want to accomplish is also good for them.

CPAs can borrow these best practices to significantly increase their chances of winning. This can be done through reading books about deal coaching, as well as bringing in a consultant to coach the team through a large opportunity. If your firm wins 90 percent of all business proposed, because most business is referred, then you are probably not aware of and pursuing enough opportunities and you could be growing faster. If you are winning less than 30 percent of all proposals, you are likely wasting your time in writing these proposals, rather than pouring that effort into actions that will be most effective with major opportunities. Once you assess where your firm is, converting your resources into the appropriate places to take advantage of major opportunities is the single most valuable action you can take to grow revenues more quickly.