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Blue Ocean Tax Strategy
Posted By: re* on 7/30/2006 4:27 PM (CST) 500 Points
We have a blue ocean tax service serving clients in service industries nationwide. There are no competitors. And we can achieve often miraculous results. Once new clients find out what we do, they are thrilled to spread the news to their circle of influence. Then the buzz stops.

Focused on service businesses. Divergent because other firms ignore tax strategies and tax preferences. Decent tag line: "Tax strategies that work." (Possibly improvable.)

The business model does not need improvement. The marketing model does.

Devising a Blue Ocean service is well and good, but sailing on it is another matter. Our firm is growing rapidly, but we should be experiencing explosive growth. We are getting decent growth from referral agents who speak and from our own speaking engagements at small conventions, and from the ideavirus buzz that results from new clients. But once the message has binged around their circle of influence, it dies. It doesn't spread to other hives.

I am thinking about engaging bloggers, but I am not sure who to approach or how ...

Any ideas for spreading the word broader and faster? Traditional interruption advertising is not in the cards. Our niche is too narrow, and there are legal restrictions on advertising for CPA firms. We don't want to test drive the restrictions.

Posted by: wnelson Member Response
7/30/2006 5:37 PM (CST)
Robert,

"There are no competitors?" So anyone not using you in the service industry just isn't paying taxes? You said your tag line is possibly improvable: Tax Strategies that work. Doesn't sound like a tag line for a company that works miracles.

Working with accounting firms and tax service firms and with many firms that use them, I have found that there is very little "shopping around" or changing firms. The decision to pick one is largely an emotional one built of trust. And things have to be very wrong before their clients want to change. Besides the trust factor, the thought of "breaking in" a new tax service or accounting firm is arduous. I have talked with three businesses in particular who agree that their tax service or accounting firm is not doing the best job for them, but none would consider shopping out their needs for a firm that might be better.

Put all this on top of a firm who comes off claiming miracles...accounting firms are hard working, they know taxes, they are professionals....but miracles? Tax accounting is tax accounting. There's only so much you can do (legally). I bet people find this pretty hard to believe if this is how it's presented.

Robert, I'm not being argumentative here. In fact, I applaud your zeal and confidence. I'm suggesting that perhaps that if your approach to marketing is like the words you chose here, the issue with your marketing and your word of mouth campaign could be that your "copy" doesn't fit your target customer segment's influencers - the images and words that provoke a customer to take action to "buy." I believe you have the right media - word of mouth. My experience is that this is the chief way tax service or accounting firms get clients.

I would suggest you go back to basics in your marketing - know your target customers and their influencers. Use those influencers. Some that I know of from my work are: Trust, competency, "family" (for the small business clientele), conservativeness (the dicotomy here is that they want aggressive tax strategies but the people doing them to wear cordoroy blazers with leather elbow pads and horned rim glasses)....Your brand has to fit the characteristics people are looking for. TExamiine the customers' needs. ake a good look at the competition you say isn't there. Firms have their internal tax groups, if they are large enough, they use CPAs, they may even do their taxes themselves...these folks also advise on tax strategies. They have business you could serve...they are your competition - as inferior as they may be at doing it compared to your company. Look at their strenghts and weaknesses and how they are fulfilling their clients' needs and how they aren't. Do a SWOT to understand your core competencies and how you can fulfill clients' needs better than your competition. Use those points to define your position statement and brand strategy. Then, create your marketing plan.

What makes your situation harder is that you are promising great things in the future with your tax strategies. "Hire us now and you'll save money next quarter." Takes a lot of faith and trust.

I hope this helps.

Wayde
 
Posted by: re* Author Response
7/30/2006 7:34 PM (CST)
This comment is to Wadye and any others who are thinking like him.

Wayde, while I appreciate the time you devoted to responding, you would do your clients a lot more good if you listened better.

To reiterate, my firm has a blue ocean strategy that is not even on the horizon of any other firms I know of. We are tripling our growth every year, but considering the remarkable results we get, we would expect to be growing at a much faster rate. Yes that would put great strain on staffing, but so be it. I am afraid if we do not strike right now while the iron is hot, the opportunity will pass us by.

We expect to ride this Blue Ocean Strategy until we become the largest tax focused CPA firm in America.

As favors to clients, we have tried to help CPA firms in Kansas City, New York City, Denver and California with this concept, they all think we are on to something big, but they need detailed instructions on every deal. They keep coming back for more answers.

Furthermore, we are not promising anything. We simply tell them what we do and 90% of them buy in. If they don't, they don't. We don't need them all. Only those who are eager and anxious to work with us.

Now, you may find that hard to believe, but I am not looking for value judgements, I am simply looking for ideas. And specifically for ideas on how to build buzz. If you are capable of dealing with that fact scenario without calling my veracity into question, please pitch in.
 
Posted by: re* Author Response
7/30/2006 8:05 PM (CST)
In responding to Wayde, I realized the reason we don't have to sell our product or promise results, is because our clients do that for us. By the time the referral calls us, she is already sold.

And there may an emotional element. Normally it is hard to get clients to refer. They refer us because it adds to their influence with their peer group. They know we will do an excellent job and improve their reputation with their peers.

Which is why we want to build buzz. We want to build referral buzz, we just want it to jump form hive to hive. So far we have not been able to accomplish that. How do you get it to jump from hive to hive? How did Hotmail do it?
 
Posted by: wnelson Member Response
7/30/2006 8:25 PM (CST)
Robert,

Thank you for your direct response. I would suggest that perhaps you should listen too. I heard what you said and suggested while I am a believer that your claims are indeed genuine - I trust your professionalism. You see, I am not calling into question your professionalism or giving you value judgments. I am suggesting that from my professional experience, perhaps your claims, though accurate and justifiable, and the resultant marketing approach aren't in line with the needs and influencers of your customers. You may be ahead of the market place. And since you are obviously familiar with all of the "buzz marketing" techniques out there, I am suggesting that perhaps it's not a new method needed but a different approach to the methods you are using. In this, dropping back to examine basics might be warranted. What you took for judgment and calling into question your verosity in this question was to demonstrate a mismatch in your customer needs as I have seen them and what I can infer from your approach. Sure, in time, you will demonstrate your advantage and that your claims are indeed true and will revolutionize the industry. I'm not questioning that. But you asked how you can move faster. To move faster, you need to meet the expectations of the customers today. Over time you can change the world. But, that takes time.

From a Buzz Marketing standpoint, one of the newer methodologies is to let customers try the product, realize the benefits, and then let them broadcast the results to everyone they know. I pointed out that I believe you are selling a "future" benefit - you can help people plan for next tax year. Is that right? Is there a way to offer savings today? Like offering a review of past tax returns to see where they could save money - like if they refiled? Or could you review the past year's return and point out things that they can do this year based on that? If your advocates can offer a "free assessment" to their circle, this is a good "buzz" step. The risk is that they could hear your suggestions and take them to their accountant. You need to plug that hole.

Wayde
 
Posted by: re* Author Response
7/30/2006 8:41 PM (CST)
Wayde

I am sorry to be so frustrated. But if you read my posts carefully you will see that my clients are very happy. I have proved everything to them. They already refer me. On average three successful referrals a year each. There is no need to give it the time to prove itself. It is a proved fact.

What I want to know is specifics on how to grow faster than 300% per annum. The problem is once my referral agents run out of contacts, they have no one to refer. That is the problem I am trying to solve. How can I help them jump to another hive?

As far as I know, everyone who is familiar with our services is an enthusiastic referral buzz agent. But after a while they run out of people to tell. Wayde, this is not some hypothetical situation. This is a real life scenario that is already flying very high and very fast. The bullets are flying through the air. It is time to act, not think.

Also please consider this. I am not located in Greenville, South Carolina, or Tampa, Florida or Round Rock, Texas. I do not know who the influencers are there. If you have a way of helping me dentify them to my advantage, please let me know.

I have updated my bio.
 
Posted by: wnelson Member Response
7/30/2006 9:24 PM (CST)
Robert,

I can understand your frustration...and you don't need to apologize. And be clear on this: I would NEVER dis a drummer! Us rhythm men (I'm a bass player) stick together! I always arrive early and help set up the drum kit and stay late to tear down.

I was purposely confrontational...because I find that if I am nice and agree with my potential clients and don't point out things that stand out to me as potential problems, I do them a disservice.

Now down to the points: With respect to influencers - I am not referring to people but images and words that affect people to "buy" with respect to tax services. In Greenville, South Carolina, or Tampa, Florida or Round Rock, Texas, there will be some "common" influencers and then there will some regionally specific ones. Understanding the common ones is very important to set your marketing strategy on a global scale because you can save money and resources in knowing this. As you roll out your campaign, it is important to know regional characteristics and customize the campaign for maximum effectiveness in that region. It is important to segment your market by region and prioritize your spend to the highest priority regions.

You say that you are very effective at getting referrals from satisfied customers. Does this mean that the satisfied customers spread the work to everyone they know and that every one of those people come to you and you capture every one of them? If that's the case, could you please take your show on the road and hold seminars? I'd gladly pay to understand how you have that kind of success! Just as protecting existing customers is easier/faster than finding new customers, closing existing leads is easier/faster than generating new ones. What are reasons that:
1) People don't refer
2) referred people don't hire you

What actions can you take to remedy these situations before you move on to finding new leads? It's hard enough to generate leads but wasting them by not fixing the issues that prevent you from closing is egregious. Thus, back to the basics.

As you roll out to new areas - the Greenville, South Carolinas, or Tampa, Floridas or Round Rock, Texases - you also need to identify where to start. What are the characteristics of the businesses that pick up your services the fastest? What influences them to do so? Why do they sign up? Via B&D, Reference USA, or other databases, you can pinpoint targets to being and then once they are landed, you can use their circles to spread.

Lets keep the dialog going....and also maybe some of my colleagues will chime in!

Wayde
 
Posted by: re* Author Response
7/30/2006 9:48 PM (CST)
Wayde

I can understand. Arguing with you has clarified everything in my mind.

Bear with me.

As far as I know my clients refer me to every service business owner they know, including competitors.

I pick up 98% of referrals, except those scared off by my fees, as I am very, very expensive. Some people have even told me we are an answer to prayer.

The people who do not respond to the referrals do that because of an attachment to their current CPA. If I get the opportunity to speak to them, I recommend they have him walk their dog or wash their car, but don't turn over your wealth to him.

As I write it out, it amazes me also. But that is a fact.

I have no opportunity to learn more about each community in which we have clients. After all we are in forty states. The answer is not learning more about the market. The answer is something else.
 
Posted by: wnelson Member Response
7/30/2006 11:23 PM (CST)
Robert,

OK, let's do some math here. As I look at my list of business contacts, I have a network of about 100 people I know from various network groups to which I belong and they are mostly para-leaches, er, service companies because we all belong to these groups because we want to find those people who actually build something for a living. I'm a believer in your services and I'm going to tell every one of them about you and what you can do because of what you have done for me. So you now have 99 clients - me and 98% of the folks that I know. Now, I belong to three "circles" and for the most part, the number of contacts I have are relatively equal. And 2/3 of those individuals do not know each. I'm not all that unique. So probably each of my contacts belong to different groups where 2/3 of their contacts are unique. So let's say that that each of the next tier know 66 business owners who are unique and that they each know 66 business owners who are unique. That says that you reach another hive 2/3 of the time.....so now the math. First round: my 98 give you 66 each so that's 6600 and you convert 6500 of them (roughly 98%). They know 66 people. That's 430,000 and at a convert rate of 98%, you get 420,000 clients. Even if it takes you three months for your "wins" to refer and three months for you to convert, that would be 420,000 clients in 18 months.

If you were on that path, I would suspect that you wouldn't be writing here for help. So the problem is that either the clients aren't spreading the word to all their contacts, you aren't able to close on 98% of the referrals, as you suggest, or that you don't have the capacity to personally talk to all of the referrals so you can close at your 98% rate. I believe your 98% closure rate...drummers don't exagerate. So let's work on how to induce the present clients to completely spread the word and also touch on how you can "clone" yourself so you can serve all the referrals.

First, the cloning...have you thought about franchising your business business model? You are almost there now. You are talking to other firms and trying to get them to understand how to do what you do. To franchise this, you have to provide the training to get them to work the business model and then to market it for them. You have to provide them with not only initial "start-up" value, but also continuous value so that they see an advantage long term to belonging to the franchise. Think McDonald's. They have established a brand and advertise nationally to drive people to the local stores. So you "teach" the business model, including how to get clients to tell all of their contacts and how to close. You charge a healthy "franchising" fee and with the proceeds you spread the word nationally - of course, within the guidelines of the CPA standards. It's all true...no out-landish claims. Thus, this shouldn't be a problem.

Now, to induce clients to spread the word to all their contacts, think about appropriate incentives. Take clients to lunch if they refer. Give them a free month of service. Do some co-advertising where you take an ad out in the paper for clients who refer. For each new client, send a "thank you" gift. Make it something that will be visible and provoke people who come into their office to ask them where they got it. As your advocate, they will be glad to tell your story. If it's not too close to an ethics violation, you could offer your clients a percentage of your fees for a successful referrals. If you franchise, you could offer clients a share of ownership in the company for referrals.

Wayde
 
Posted by: kpalmer Member Response
7/31/2006 3:28 AM (CST)
Robert -

One must carefully consider the advice given by bass players: their whole existance is based on the activities of your right foot on the BD pedal . . . :-)

Now I'll try to avoid double-stroking, paradiddling or shuffling too slow for all you high finance folks: in Canada we have to make the best of our teeny, tiny population and I may have an idea that might work.

Premise:
You have existing customers. They love you. They'd never leave. They spend more than average, are totally blown away by your service, refer all their customers to you - but the problem is that your 300% growth rate is too low. Presently, you do a speaking engagement and sign up most of the attendees.

hmmmmmmmm. I'd say that you should be booking speaking engagements for a living, no? Stick to what you know works, focus on booking speaking engagements all across the Country.

Fairly simple, no?
 
Posted by: re* Author Response
7/31/2006 10:27 AM (CST)
To Wayde.

Your acceleration is way to fast. Most of our referrals share the same hive as the person who referred them. So there is not the same effect as more and more of the hive get referred to me. Secondly, they don't jump to a second hive. The circle of influence of most of my referral agents. is fairly limited, and they have little influence in a second hive. Which if you think about it, makes sense. After all we are talking about people who own service businesses. Just like yours.

I obviously don't know what happens to the people referred. Some of them have their tax person call for advice. But some obviously stay with the tax person they love.

Examine your own circle of influence. If you referred a colleague to a CPA firm in a far off state, you would have to be pretty enthusiastic to even get a raised eyebrow in response. Folks, this is real life stuff, not an academic exercise.

Also, I can't take someone to lunch if his offices are 1,000 miles away. I don't need to do anything to entice referrals. What I do want is apparently not possible.

To wnelson

Yes that makes sense. But I have reached the stage in my life I don't enjoy driving two hours to an airport, jumping on an airplane at 5:30 in the morning, making connections in Atlanta and finally arriving at my destination at 4:00 PM. Speaking the next day, and on the third day repeating day number one all over again. Just to speak to 500 people at a small convention. Yes it grows our firm ... but.

What I want is for the buzz to jump from hive to hive so my life is easier. But as I correspond back and forth, it becomes clear to me that is probably not in the cards.
 
Posted by: wnelson Accepted Answer
7/31/2006 12:22 PM (CST)
Robert,

Just some more thoughts:

I never implied it was an academic exercise. I am just trying to get facts so that I understand the problem better. The mathematical model I discussed is based on my own circles and hives. I belong to two chambers, two professional organizations, a networking group, and a technology company organization. I have a sphere of influence in all of them and with the exception of the networking group and the one chamber, they do not overlap. Many service business owners belong to the chamber, rotory, a church, and other organizations. These are all hives and they may not have much overlap.

I'm not an expert at hive-jumping - I haven't written a dissertation on it or spend hours researching it. But, being pretty good at statistics and modeling and human nature, I can predict that the probability of the spark jumping across to another hive without an evangelist (one of your happy customers) having influence there is pretty small unless you make evangelists just for the purpose of spreading the word. And to do that, you must not only have a happy customer, but he has to be so over the top that he is compelled to tell not only everyone he knows, but also to stand on street corners and shout out the "good news." Think "early Christianity." To get an evangelist this enthused, it takes a lot of believe and a desire to change the world. Think: "What's in it for your evangelists? Why would the world be a better place if everyone were your customer?"

Buzz marketing and viral marketing depends on three things: The members of the hives spreading the word among themselves, members belonging to other hives and spreading the spark, and the message being compelling. For the message to be compelling, it has to be packaged consistently and easily understood and easy to pass. Many viral marketing pieces are pre-packaged. Decisions are made in two parts: emotional and rational. The pre-packaged message hits both parts.

You are already nearly there for evangelists, it sounds. They are enthused. With the exception of adding some things - like a "welcome aboard" gift or some incentives to put them over the top, I am assuming that they are ready to spread the word. This would be more efficient if you packaged the message such that you let them spread the emotional part with their enthusiam and then have them pass the rational part with a card, a brochure, a video message (on a credit card sized CD or DVD?) etc. Of course, you can have this message on your website and do SEO to make sure you are #1 on any search (for a price). Even though I wonder how many decisions for selection of tax services are made as a result of Googling, it is an option in the marketing portfolio. Being active on blogs - yes, that will help too. It will take time to build rapport and influence - it won't take hold immediately.

Wayde
 
Posted by: re* Author Response
7/31/2006 12:40 PM (CST)
Wayde,

I certainly appreciate your active participation in this matter. You clarified everything in my head and that is extremely valuable. I have awarded all the points to you.

This is what I decided.

Concentrate on service industries with a vested interested in seeing others succeed, such as realtor brokers over an entire office, mortgage brokers over an entire office, network marketers with downline, etc. That way I will get the buzz out of their circle of influence.

And if they jump to another hive, that is great. But that is probably why the don't jump hives. The hive will change when one moves.

Continue what I am doing because it is working.
 
Posted by: wnelson Member Response
7/31/2006 12:50 PM (CST)
Robert,

Thanks. Feel free to contact me off-forum via eMail, phone, whatever. My profile has my eMail address and website URL with contact info. I'd be glad to kick around any ideas you have. You had an intriguing issue and it was a pleasure working with you on it.

Best regards,

Wayde
 
Posted by: re* Author Response
7/31/2006 1:01 PM (CST)
Wayde

Good grief. What are you going to do with all those points?
 
Posted by: wnelson Member Response
7/31/2006 2:13 PM (CST)
Robert,

I wish I could turn them in for prizes or airline tickets or a drum machine! For now, I am just collecting. Some day I'll ask a very important question - like how to end world hunger or the nature of man or the unified field theory and I will lay out a 30,000 point reward and gather inputs from far and wide. I'll compile the answers into a book and win a Pulizer or maybe a Nobel Peace Prize. There will be great rejoicing. Maybe a parade. :)

Wayde
 
Posted by: beth Member Response
8/1/2006 9:56 AM (CST)
From what I read I assume you have your "ideal client" profiled. If not that is important in marketing. It's the get it right approach: offer the right person, the right offering, at the right time in the right way and keep doing it time after time.
My suggestion for marketing is go to them the "ideal client". Consider e-marketing efforts,i.e., search optimization, pay per click, PR releases, podcasting, and blogs. Help them find you.
the #1 question every business should ask today is: Have you and/or will you recommend our produts/services? I follow that with what do you say when you recommend us? I have found when recommending, people talk value. We want clients to understand our features, functions, and benefits and the most important is REALLY get our value to them.
 


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