The term “higher-value services” has been knocked around the profession for a long time. In fact, software vendors, professional organizations and consultants have been advocating for the move away from transactional work to higher-value advisory work for more than a decade. Yet, despite all the talk, many firms have yet to make the transition and cash in on this big opportunity.
There are several reasons behind the profession’s slow adoption of advisory services, but lack of clarity is likely the lead deterrent. Lack of clarity around what “higher-value services” really means… and lack of clarity around a sound business model to support this type of work.
Let’s start by offering a clear definition of higher-value services and then dig into a model that works.
What are higher-value services?
It’s not clear where the term “higher-value service” originated. What we do know is that it has become a default moniker for any service that does not fall under the transactional category—such as tax return preparation and payroll processing.
What we’re really talking about here are advisory services, which indeed are of high value to clients. Advisory services constitute any expert advice or guidance provided to clients, such as entity selection, salary structure, tax planning, KPI analysis and succession planning—to name only a few.
If we look at a sample set of traditional firm services (historically, these fall under the transactional/compliance category), compared to a sample set of higher-value advisory services, the distinction between the two becomes clearer:
traditional firm services
Productizing advisory services
With a clear understanding of what constitutes higher-value services, it’s time to move on to business model. That is, how do firms structure advisory services so that they are easy to manage and sell, and most of all, so they are profitable? The answer is simple: productize!
When firms productize service offerings, it sets them up for far more success in the area of advisory services. First, defined products support a fixed-fee model—and affixing a set price or value to a defined product is more easily understood by clients. Second, this is also how today’s clients want to work with their professional services providers—they want full transparency on what they are buying, the cost, and how it will be delivered. Welcome to an Amazon world.
To the profession’s credit, many firms have already adopted the fixed-fee model on the transactional/compliance services side. The good news is that it’s just as easy to set up fixed pricing for advisory service…when you productize!
The key is creating “off-the-shelf” solutions that are repeatable and predictable. Consider just a few advisory services required by a new business startup: Entity structure, owner salary structure, retirement planning and technologies for business operation. Now, what if you had a packaged product for business startup clients that allowed you to market, sell and deliver services consistently across clients—just like with your transactional/compliance products? This advisory product would include:
- A sales kit—Complete with a sales presentation, short information sheet and a sales proposal (complete with fee).
- Education assets—These assets are the core of your product, used to educate clients on each component of business start-up. You will probably tweak your presentations and reports for each unique client, but, ultimately, you can apply the same product over and over. It’s repeatable and predictable.
- Recommendations report—Your report to clients that includes key findings.
Now consider creating an off-the-shelf product for other levels of advisory services, such as client accounting and succession planning. Can you imagine the growth potential and client satisfaction you would achieve if you could accomplish productizing all of your higher-value services?
In summary...
Today’s business clients have a real need for advisory services... and more and more are asking for this level of guidance from their accounting professional. As you look at the entire lifecycle of a business—from startup to succession planning—there is a world of opportunity for firms. That opportunity expands when you consider productizing services into structured, off-the-shelf products that make offering advisory services highly efficient and profitable.
Envision building a collection of advisory solutions, complete with the proper assets that allow you to easily support clients with much-needed and higher-value advisory services. This truly is the future...a game changer for firms looking to grow and increase profits.
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About the Author:
Darren Root, CPA, CITP, CGMA is CEO of Rootworks and founder of Liscio. Over the course of his career, he has authored multiple business books—including The E-Myth Accountant and The Intentional Accountant. Darren has consistently been recognized on the “Top 100 Most Influential People” and “Top 25 Most Influential Thought Leaders” lists. Darren serves on the Dean’s advisory board for the IU School of Informatics, Computing, and Engineering. He is also a member of the Board of Directors for The German American Bancorp.