One way I try to help accountants embrace marketing is to fill my training sessions with spreadsheets and numbers, things that most accountants love working on. There’s a lot of insecurity around learning marketing, but when accountants hear they need to do some spreadsheets first, they dive right in.
Here are six numbers we suggest you track:
1. Closing ratio.
As qualified leads come from your marketing efforts into your sales funnel, it’s a good idea to track how many of these leads you’re able to close into business. Your closing ratio is the percentage of successes divided by the total number of qualified leads you make proposals to.
A high closing ratio may not necessarily be something to brag about. It could signal that your prices are too low or that you rely solely on referrals.
If your closing ratio is low, the way to improve it is to build your selling skills. Closing ratios can vary by service as well as by the source of the lead.
2. Marketing return on investment.
Is your marketing investment returning a significant amount of new clients for you? Measuring which campaigns did well and which bombed will help you increase your return in future periods. Measuring ROI at a more granular level will yield even better insight.
3. Cost per new client acquired.
This is pretty priceless information, and it’s the rare executive that knows this.
4. Marketing costs as a percentage of sales.
Do you know how much you spend on marketing each year, including internal non-billable labor? Many of these costs are lumped into office supplies, dues and subscriptions, entertainment, and overhead. If marketing costs were tracked better, we would know which costs provide a higher return.
As competition increases and marketing departments evolve in accounting firms, we’ll need to do a better job of tracking these costs.
5. Client retention rate.
Client retention rate or its opposite, client attrition rate, should be measured to see how the firm is trending. You might think this is a measure of customer service, and it can be, but it affects marketing in two ways. Marketing costs increase if more new clients are needed to replace lost clients. And part of your marketing plan should be dedicated to marketing to current customers. It’s kind of like taking your spouse out to dinner after you’ve married.
6. Revenue per client.
It’s good to track whether this number is increasing or decreasing so you can attend to the trend.
These six metrics are just a few of the marketing metrics that you can use to increase the profitability in your firm.