Do You Provide A Guarantee?

When it comes to compliance services, accountants are in the enviable position of not needing to guarantee their work.

Or at least the ones that are qualified don’t need to.

That’s because the qualification is the client’s guarantee that the accountant will carry out their work with due care and attention, and will meet all necessary requirements of the regulatory authorities to the benefit of the client.

But guarantees are still worthwhile looking at.

The qualification is the trust factor that underpins the relationship.?

The risk of getting it wrong lies with the accountant (in theory), so the client pays the accountant for taking on that risk.

But when it comes to the marketplace for compliance services, there’s little way to differentiate between accounting firms.?

In general, Joe Public doesn’t understand what the relevant qualifications are, so doesn’t differentiate firms on that basis.

Meaning that differentiation for compliance services is nigh on impossible, unless…

…the accountant can provide some other service, not offered by their competition, which offers greater value.

And no, offering a longer free consultation isn’t it.

If your idea of ideal prospects are tyre-kickers who want free advice, carry on offering them, but don’t expect your prospects to value everything else you do, if you don’t value your time yourself.

No, offering something of value goes something like this:

“Buy one hour of my time for ￡500 and I guarantee to find you at least ￡500 of tax savings you can implement right now, or I refund you in full.”

(I didn’t make that up, you can thank Harvee Pene for that)

But how’s that for a more balanced approach?

If they pay you, they want the advice and value it.

If they get the outcome you’re guaranteeing, they’ll also become your client.

If you have to refund them, you've just done what you've previously done - given advice for free.

Of course, you could also apply a similar approach to the provision of compliance services:

“Move to our cloud accounting software, take up our premium bookkeeping package and if we don’t get your accounts to you within 5 weeks of your year end, we’ll refund your bookkeeping and accounts fees for the full year.”

You can tell I made that up.

Now you might have something like that in place already, in which case you’re well ahead of the game.

And probably quids in.

If not, then you should seriously think about offering something similar.

Guarantees work, when they guarantee value to the person receiving the guarantee.

No-one attaches great value to having their stat accounts and tax return prepared, but they do value having the figures and a meaningful review of what it means for them, soon after they've got them.

They do value advice, especially if that advice avoids disaster, reduces taxes or increases profits and subsequently wealth.

And if you guarantee to deliver that value, you can charge a premium.

You do of course, have to know that you can actually guarantee to deliver what you say you can.

So in the tax example above, you would prequalify applicants to ensure that they had the right profile to be able to benefit from tax savings.?

And you would also need to have already defined tax saving strategies that could deliver those savings for the prequalified applicant.

Similarly, to offer performance guarantees, you need to know what your performance levels are currently, to know where to pitch them.

In the accounts example above, you’d know that unfettered access to your client’s cloud accounting software means that your premium bookkeeping service can clear all bookkeeping errors on a frequent basis, can adopt automatic monthly journal postings, and can be templated with reports that pull out statutory and management accounts info with little additional work.

The more you automate and streamline your processes, the easier it is to be able to give performance guarantees.

You could also limit your downside by making them conditional on the client providing responses to queries within an acceptable timeframe. But limit the conditions you apply (if any) or you'll end up making the guarantee worthless.

People get scared to offer a guarantee for their service, because they think that everyone will take advantage of it and they'll be out of pocket.

However, the evidence suggests that you gain far more by offering the guarantee than lose on the outliers that might call it in.

For a longer and more informative read about service guarantees and how to use them, check out this excellent HBR article on the subject.

Having crafted your guarantee, you are now in the position to be able to go up against your competition and know that you’re providing additional value to your prospective client.

Additional value that your prospect isn’t seeing from your competition.

Guarantees work if they are meaningful and provide real risk-reversal for the client.

Which is why charging by the hour for client work is so, so bad. Baaaad.

Think about it, who’s actually taking on the risk in the transaction?

You? No. If anything unforeseen crops up, you can whack a few more hours on to your billable time.

The client? Definitely. Their commitment to pay you what you charge is open ended.

But if you are so wedded to the archaic practice of hourly rate charging, at least reverse some of the risk by providing a performance guarantee to the client.

And if you can’t do that, well, prepare to lose prospects and clients to firms that can.

Crafting a meaningful guarantee is part of the proprietary process we follow in the 100K Success Formula?.

The 100K Success Formula? builds the only funnel you’ll ever need to drive an additional 100k+ of revenue into your accounting firm.

And the best part is, we do all the implementation for you and guarantee to deliver the leads you’ll need (see what I did there?)

To find out more, book a demo.