Many accounting & financial services businesses being held back by poor understanding of laws of success

Last Wednesday, at the Brisbane offices of Macpherson Kelley Lawyers, I attended a presentation by Macquarie on its 2015-16 Accounting and Financial Services Benchmarking Report, which is based on survey data collected from 355 accounting and financial services firms across Australia. I was stunned that fewer than half of respondents considered that new client acquisition is an effective strategy to improve profitability in the current market (see chart below). Instead, most respondents favour adding value for existing clients and finding efficiencies, which are both admirable goals, but are unlikely to result in startling business growth and profits.

profitability_levers

Source: Macquarie, 2015-16 Accounting and Financial Services Benchmarking Report, p. 17.

I would suggest that many accountants and financial advisers would benefit from reading The 10X Rule by US sales guru Grant Cardone, in which he notes (in Chapter 19):

Customer satisfaction doesn’t concern me very much! Why? Because I know that we over-deliver to our clients and provide customer service that is well beyond “satisfactory”…

…I am most worried about noncustomer satisfaction; that is, the people who are dissatisfied because they do not have my product and may not even know that they are unhappy…

…It is impossible for a company to create success by just focussing on customer satisfaction. I believe that the trend of focusing on customer satisfaction has been detrimental to customer acquisition. Companies become so consumed about their current customers’ “satisfaction” that many are failing to aggressively acquire and expand their market share.

These are very wise words, and I hope to see an improvement in the proportion of accounting and financial services businesses that believe new client acquisition is an effective profitability lever in Macquarie’s next benchmarking report.

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4 Responses to Many accounting & financial services businesses being held back by poor understanding of laws of success

  1. Glen says:

    Great post Gene, what your story highlights is what many in business struggle to address today and that is the lack of genuine sales people in their business, so they look inwards at process rather than outward at their customer and opportunities. Many can interpret the data, identify the targets, do all of the groundwork but fail to get the deal done. Not long ago many predicted the death of the salesman but now the demand is bigger than ever, a good sales person in the field with key contacts is now is on 6 figures, with many heading up to $150k a year plus extras, even the biggest companies in the world now rely on a sales pitch to launch products, that ability to connect with their customer, something that doesn’t come included with your MBA.

  2. Alistair Robson says:

    Australian business is well known to be poor innovators (including ways of increasing business). No surprise here. And culture is so very hard to change. As Ross Gittens wrote yesterday (http://www.rossgittins.com/2016/09/faster-growth-demands-better-chief.html), often government is criticised for poor economic performance or getting in the way or productivity despite numerous studies showing Australian business has a lot of improvements to make. Being in the zone of looking for work I can remember most of the economist jobs being advertised in the UK 5 years ago was for economist market researchers (often precisely stating skills such as regression analysis, use of R and other statistical packages, etc.). Even in the depths of the GFC businesses in the UK were looking to grow their customer base. In Australia? During times of supposed strong economic growth? Nada, zip, nil! I can’t seem to find any (unless I’m missing something obvious). If Australian business doesn’t want to get new customers then it doesn’t need the high skills sets to develop strategies and do the research to get those customers – hence I suspect the brain drain and lack of demand for high skills in Australia. Hopefully the online retail space will change this business culture as foreign companies are very happy to get new customers (at the expense of existing customers). But that will take time. I guess we have the sunshine in Australia… Sunshine will pay the bills, right?

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