All posts by Tax Coach

Fat Man. Red Suit.

We first published this piece back in 2007. Since then, a lot has changed. (My daughter who was seven years old back then is now applying to colleges and my son who was two is now as tall as I am!) But some things remain eternal. Like the joy in a child’s face when he first sees that Santa visited his house. Or (wait for it) the value of target marketing. So join us for a walk down memory lane as we watch how one of “the great ones” does his stuff.

 

He’s baaaaack . . . .

Whether you celebrate Christmas, Hanukkah, Kwanzaa, or just sit home like Scrooge, you can’t open your eyes or ears without seeing or hearing him. Statistics show that we’re exposed to 3,000 advertising messages per day. And this time of year, it seems like all of them feature that familiar jolly fat guy in his familiar festive red suit.

You probably just think of Santa Claus as a holiday icon. But have you thought about him as a business guru?

Back in 1990, Wess Roberts wrote a bestseller called Leadership Secrets of Attila the Hun. You probably don’t want to hold your clients’ children hostage to consolidate control over them. And you can’t pay your staff in plunder. So in a more festive spirit, I offer “Business Secrets from the North Pole.”

1. Target Marketing

Our marketing philosophy boils down to this: target specific markets, then give them a unique reason for doing business with you and not your competition.

Santa offers one product: Christmas presents. Specializing lets him own that market. You don’t see Santa handing out candy at Halloween, or delivering eggs at Easter.

And Santa serves one broad, enthusiastic market: children.

Marketing guru Gary Halbert was famous for telling clients to imagine they were opening a restaurant — then asking what would best guarantee success. Low prices? Great food? Special sauce?

Nope, nope, and nope. Try a starving crowd of customers! Markets don’t get more “starving” than children on Christmas morning!

But Santa doesn’t stop there. He slices and dices that market, and creates distinct brands for them.

General Motors has done this for years, marketing Chevys to the working man, Pontiacs to wannabe hotrodders, Cadillacs to high rollers, and Buicks to affluent but more conservative (read: slower) drivers. Santa does the same thing, appearing as himself here in the United States and Canada, Father Christmas in Great Britain, Pere Noel in France, Babbo Natale in Italy, Joulupukki in Finland, and Kaledu Senelis in Lithuania.

Santa doesn’t try to be all things to all people. Neither should you. Pick your markets and serve them well. Your clients may not be as happy as kids on Christmas morning. But they won’t leave you for the Santa down the street.

2. Time Management

Most of us think we work too much. No, let me correct myself. Most of us do work too much. Our All-Stars tell us they typically work 40-60 hours per week — and want to cut 10 or more of those hours out.

Santa Claus works one night a year. One night! This cat is leveraged. Forget about hiring associates at $40/hour and billing them out at $100. Santa lets the elves do all the work — then hops into the sleigh to claim all the credit!

(Santa’s not the only one to figure this out. Willy Wonka does the same thing, importing Oompa-Loompa “guest workers” from the small Pacific island of Loompaland. The Oompa-Loompas make the chocolate, and Willy takes the credit.)

Creating systems and managing staff aren’t easy. But these are crucial to moving from a personal practice that depends entirely on you to a real business that flourishes without you.

3. Exclusivity

As we discussed, Santa targets a hungry crowd. But he doesn’t serve everyone. He brings presents to the good little boys and girls. If you’re a rotten little stinker, you get coal in your stocking! (Or, “if you talk to your mother in that tone again, I’m taking back the iPod before Rudolph’s nose stops glowing, pal!” — Keith.)

We tell you to segment your clients into an “A” group (those who love you, gladly pay your fees, and refer new business), a “B” group (those who can become “A” clients with a little care and feeding), and a “C” group (those you’d just as soon do without). How liberating would it be to give your “C” clients a lump of coal this season?

I love my 7-year-old, Margaret. She’s bright, spirited, and talkative, but she doesn’t always listen to her mom and me. Usually that’s a problem. But this time of year, we just have to ask her if the elves are watching to get her immediate attention. Santa’s positioning works!

Do your clients think they have to behave for you? Are you managing your relationships with them, or do you let them manage you?

Several of our All-Stars are considering asking clients to actually apply to do business with them. Can you imagine how that transforms the relationship? We’ll bring you more on those efforts as they develop.

I’ve had more fun than usual writing this week’s Briefs. But please don’t think I’m not as serious as ever. Santa Claus offers real lessons for you and your practice. And you don’t have to be fat or wear a silly suit to use them.

Read more…

Hate to Sell? Try This (Part Two)

Last time we met, we talked about how many TaxCoach members hate to sell. We walked through some of the reasons why tax business owners hate it (because they associate it with used car salesmen). And we discussed two ways to take selling out of that realm. First, realize that, unlike with used cars, people actually want to buy tax savings. And second, realize that selling tax savings doesn’t have to involve the sort of high-pressure closing associated with used cars. At the end of the article, I promised you two alternatives to selling that can help fill your office with happy clients, without ever having to resort to uncomfortable “pitches” or “closes.” Read more…

Hate to Sell? Try This (Part One)

Most TaxCoach members didn’t become tax professionals because they wanted to “sell.” Then they got out in the real world and discovered that selling is an essential part of building your business and building your brand. But deep down, many still feel uncomfortable with the very concept of “selling” and the need to sell themselves, their services, and their value. Read more…

Management Lessons from Queen Elsa

If you’ve got little kids, or maybe grandchildren, you see a lot of Disney movies. In 2013, it was Frozen, an animated retelling of Hans Christian Anderson’s fairy tale, “The Snow Queen.” One of that film’s highlights was Queen Elsa, voiced by pop star Idina Menzel, singing “Let it Go.”

“Let it Go” is good advice in a lot of situations. Yet we see so many cases where TaxCoach™ members have a hard time with it, especially when it comes to clients.

We work hard to attract clients to our firm. We hate to see that effort go to waste. But not all the leads we work to cultivate will become clients, or even should become clients. Sometimes we discover, at the last minute, that they just won’t be a good fit. Maybe they balk at fees. Maybe they stall when they should act. Maybe they just rub you the wrong way. It’s really hard to get those prospects so close to closing, and give up.

It’s even harder with actual clients. We look at a failing relationship and blame ourselves, even when the fault isn’t ours – or there’s no fault at all. We see clients with unreasonable expectations or demands, and try to satisfy them rather than confronting them with their unreasonableness

That’s all understandable. But is it right? Is it fair, to us and our prospects and clients? Of course not. So, what do we do about it?

If you’ve got just one prospect – and you need to close that prospect to pay your rent – you’re going to do whatever it takes to close that prospect, including swallowing a lot of pride. If you’ve got just one client – and you need to keep that client to feed your kids – you’re probably going to let that client walk all over you, if they choose.

The solution here, as it is with so many business problems, is marketing, which I define as “creating demand for your service.” The solution, in two words, is deal flow. If you have a steady stream of interested prospects who see value in your service, you can afford to let those difficult prospects and difficult clients go.

How much time and effort do you spend trying to close difficult prospects? How much time and effort do you spend satisfying difficult customers? How much revenue do you give up meeting their unreasonable expectations, simply because you’re already “invested” in them?

Do you think you could take that time, effort, and revenue, and re-invest them in finding more appropriate clients?

(Note that I said “more appropriate” clients, not “better” clients. Often, the problem isn’t that clients aren’t “bad,’ in any quantifiable way – they just aren’t as good a fit as you’d like or deserve at this point in your career.)

None of us likes to realize that we’ve wasted time and effort in cultivating a prospect or client who just won’t work out. But sometimes we let those sunk costs cloud our judgment and refuse to move on, even when continuing the pursuit or relationship is no longer in our best interest. Behavioral economists call that the “sunk cost fallacy,” and it’s easy to fall prey to.

So next time you’re faced with that situation, ask yourself if it’s really in your best interest to pursue the relationship . . . or if you’re better off taking Queen Elsa’s advice to just “let it go”!

Read more…

Random Thoughts On Pricing

Here in the business world, some of us love to use the sort of annoying, pretentious, and useless corporate jargon that drives normal people nuts. We reach out to new customers, onboard them, and circle back to touch base with them. We drink the Kool-aid, think outside the box, identify core competencies, take it to the next level, and leverage best practices. Read more…

A Win For The Good Guys

Earlier this week, the Nobel Foundation announced that Professor Richard Thaler of the University of Chicago’s Booth School of Business had won the 2017 Nobel Prize in Economics. Thaler made his bones through his study of behavioral economics, the search to understand how psychological, social, cognitive, and emotional factors affect financial decisions. His newest recognition is a timely reminder this tax-planning season that we can’t appeal to logic and reason alone to sell our services. The more you know about the science that earned Thaler his win, the more effective you’ll be in building your business. Read more…