Nine Years and Counting with the Original CSR!

Doug Fabian, CPA in Cleveland, Ohio

Doug Fabian, CPA, has done the NCI Plan 2 Client Acquisition program twice now. The first time around, in 1999, it worked so well he had to shut it down after 8 months, in which time he hit the guaranteed billing amount for a year. Eventually he merged with a larger firm and when he and his partners decided they wanted to ramp up their marketing, Doug, again, turned to NCI. Having learned from his previous experience, he had a much better handle on the program and the amount of work it can generate. The second program began in 2004 and has been running steadily since, with the same CSR originally hired and trained onsite by NCI. During our interview Doug talks about his two experiences running the program, offers advice to those running it or considering it and the importance of being able to replace lost clients through proactive marketing, among other things.

Please tell me a little bit about your business background and what lead you into owning your own accounting practice.

Doug Fabian, CPA

I worked in industry in accounting as a CPA for the Fortune 500-type companies in their corporate tax division. I decided to start my own practice when I got married because my wife’s income allowed me to leave my higher-paying job in industry. My dad was a sole proprietor attorney, so that helped to inspire me to go into business for myself.

How long were you in business and what was the overall size of your business when you undertook the NCI program?

I started out with zero clients. For marketing, I read some books on the subject and sent out direct mailers primarily. I did that for about six years and the staff was just me, a secretary, and a couple of bookkeepers. I think we were at about $120,000 in gross billings. Around that time, I ran across one of NCI’s brochures. I was always interested in learning new ways to market. So I thought I’d give the NCI approach a try. I wanted to grow faster and the NCI approach also seemed like it would give me a way to do less in the practice because, at that point, I was doing almost everything on my own and getting pretty busy. So I did the Plan 2 program in November of 1998, where NCI came to my office and hired and trained a sales person for me. I actually ended up letting my salesperson go about eight months into the program because I got overwhelmed by the clients he was bringing in. I was unprepared for it and I was also having a hard time finding and training bookkeepers to help me keep up with the increased workflow. So I shut the program down and took about a year to get all caught up. Then I hired one appointment setter and I started the marketing back up at a slower, more-controlled pace, with me doing the selling.

How much in billings were you able to add in the eight months before you let your salesperson go?

I know that when I merged the practice with my current partners, I was doing $220,000. I’d say we got to around $200,000 with the NCI trained sales rep. So we added about $80,000 in eight months, and I remember Bruce telling me we had hit the guarantee amount for 12 months in only eight months.

Then, in 2002, I merged with my two partners. They were doing about $2 million at the time and we added in my $220,000 to that.

How did the merger come up? What were your deciding factors there?

The opportunity came up. I didn’t want everything to continue to rely on me in the practice. I couldn’t even take a vacation without worrying about the practice being able to run. My two partners and I hit it off really well when we met. We had run across each other since we were both providing the local small-business market with accounting services.

About a year and a half later, I was still doing a little marketing with one appointment setter. I told my partners about New Clients, Inc., and how it had worked for me in the past. We had about 40 employees and a good infrastructure since I had merged with this larger firm so I felt we would be in a better position to take on the work generated by the Plan 2 program. I also wanted to apply my experience with the program from the first time around. So we did the Plan 2 program a second time in January of 2004 and have been doing it ever since. I still have the original salesperson the NCI hired and trained for me in 2004, going on nine years now.

At first, we had three appointment setters and the new CSR, Bob, and I monitored the program closely. Eventually we added more appointment setters and a second salesperson to target payroll clients. We had 10 appointment setters dialing at one time. We ended up stopping the payroll marketing and we’re back to three appointment setters and the original CSR, targeting accounting work. One of the issues with targeting the payroll is we were going after much larger clients and that can be very difficult.

Going back to the first time you did the Plan 2 program, what concerns did you have before initiating the program?

I really didn’t look at it as far as concerns. I looked at the projections and the guarantee attached to the program. I was doing mailers to grow and I noticed that the return from them was decreasing every year.  Plus, it takes time and money to put those together. In addition, I contacted some of your references and that was good enough for me, so I went for it.

Can you estimate the amount of growth Bob has brought in during your second program?

You have to remember we do a lot of write-up and, when you get so large, you need a marketing element to address attrition. Businesses close up, you lose some, people retire, etc. We’re doing about $3.3 million in billings now. I can’t attribute all of that growth to Bob, of course, but he certainly contributed his share. Keeping up with the attrition is so important; we do 600-700 monthly accounts, so staying on top of that is crucial.

That’s quite a few! I can see how being able to replace lost clients will keep the company stable and growing or, if not actively growing, it prevents you from going backwards.

That’s where we are now. We have some growth but the marketing is providing us with maintenance and stability of our client base. We get a lot of referrals, too. I think that if we wanted to get aggressive again, we’d want to add another sales rep. and we toss that idea around from time to time.

I understand, and given the size of your firm, along with the ongoing recession we are all dealing with, maintenance is a good thing. We know that a lot of businesses are going under, so you have to protect yourself from those kinds of losses.

Sure.  When I merged with my current firm, before we did the second program, they were slowly losing write-up clients to attrition and were not actively marketing at that time. With the program in place, we’ve grown and now are stable during a bad economy. We haven’t lost business we couldn’t make up and we haven’t had to lay anyone off. We employ about 50 people.

Have you done any other acquisitions to grow?

We did pick up one. We wanted an office on the other side of town, so instead of just buying an empty office, we bought a small firm where the CPA was retiring.

Okay, and your firm does write-up, tax and bookkeeping which is exactly the type of firm we encourage our clients to build because they are relatively easy to grow, profitable, sell for a premium and are relatively easy to transfer to a new owner.

It’s also less work on the CPAs. We used to do audits but we stopped because that falls on the partners to handle, while the monthly write-up clients can primarily be handled by bookkeepers.

Exactly.  The work is easy to delegate, which frees you up to focus on the bigger picture like running the practice and handling problems that come up.

It also frees us up to do consulting work. I haven’t done a financial statement in I don’t know how long.

That’s the goal; you want to be able to delegate those lesser tasks to your staff. Then you can enjoy the fruits of your labor or refocus the extra time back to the practice. You have to build up to that first, but once you get there, you should be able to enjoy it, and a big part of that is being willing to let go and delegate to other people. That’s actually what our Advanced Processing Seminar is designed to teach our clients how to do.

I took that seminar, taught by your client, Duane Gravley. I took that course after I shut the program down the first time to address the processing issues I was dealing with. I believed in the system and knew it worked, but it was the internal part I had to fix.

That’s exactly why we developed that seminar in the first place. What has been your biggest challenge in running the marketing program over the years?

I’ve been fortunate that I’ve never had to replace my salesperson in nine years. I also have good appointment setters that are effectively being managed, so that’s not a challenge. The biggest challenge is just making sure that the work is getting done for all the new clients.

What advice would you offer to someone considering an NCI marketing program?

My advice would be to make sure you have enough working capital to keep the business and the program running early on. It takes money to build a practice. Number two would be to make sure you don’t fall behind on the work because once you fall behind on the work, it’s always hard to catch up. You can’t tell your salesperson to slow down with bringing on the clients, so you need to be prepared to handle them as they come in. Plus, some of the clients will have a lot of back work that you need to stay on top of. With a sales rep. bringing in two to three new clients per week, the work can sneak up on you.

The way I’ve done it-and I still do this today-when a new client comes across my desk, I go out and meet with them at least twice. The first time I figure out what type of accounting they need and I write up a list of all the things I need from them to do the work. Then I come back the next week and pick up everything and make sure I have everything I need. That way, they get to meet me and see me a second time to establish the relationship. I set aside about two hours for each meeting, so it’s an investment of time, but I find that it’s worth it.

What advice can you offer to someone currently engaged in the marketing program?

I can’t stress enough that you have to have a good hold on things internally for processing the new clients. You can’t have anyone slip through the cracks. We have different reports that we get from our bookkeepers called production reports, which detail what work they’ve accomplished and how long it took them to do it. Later on, we brought in some managers. It really comes down to just making sure your internal processing is effective and efficient.

Can you think of some of the larger clients you’ve been able to sign up via the program? I ask because certain people we talk to about the marketing programs voice the concern that they will only get small clients that they can’t make money on, which you and I know isn’t true, but can you speak to that?

I can make a comment on that one. You get all types of clients. You may get some small ones that barely need the service. You’ll also get companies that have been in business for 30 years, nice and established. It all comes down to timing, which is why the appointment setting is so effective. You keep reaching out to find the ones who need the service. You call someone where they’re angry with their accountant or their CPA just retired. We’ve also had the experience of calling on a popular franchise and ending up with eight locations signed up from that one call.

I’ve heard similar stories of people picking up multiple franchise locations from a single call like that.

Normally, I find that the smaller clients end up being more profitable than the bigger clients. Let’s say it’s a small QuickBooks client; the bookkeeper can knock that out in an hour and then it’s done. The tax returns are also nice and simple. The big clients want a lot more from you. I can handle a lot more of those small monthly accounting clients. When I’m tired in tax season, I’m happy to see one of those come across my desk

Can you sum up your feelings on NCI and our marketing program?

The program works. I know it works. I felt good about the program the first time even though I stopped running it. That had nothing to do with NCI. Then I went back and did the Plan 2 program a second time. That tells you a lot: that I did the program twice. The NCI program is the focus of all of our marketing since implementing the program a second time. My two partners are pleased with the way the program works, as well. I have no complaints. Anytime I needed something I called New Clients, Inc. As with anything new, you run into challenges and have questions. I’ve called NCI and discussed some new ideas for the marketing or to address problems over the years, so the support is there. The support is also available way past the time you write your check to NCI. No one ever sent me something saying the relationship was over. You can probably see in my file that two years ago the new client growth had started to slow down, so I called NCI to exchange ideas and I sent over some of my statistics from the program to get additional advice.

Doug, I’d like to thank you for taking time out of your busy schedule to do this interview. We appreciate the kind words and the good advice. As always, if you need anything, give us a call!

Chris Clark – Executive Editor, NCN

Chris Clark is the oldest son of New Clients Inc. founder and CEO Bruce Clark. He has worked as a Senior Account Executive at NCI for the past four years. During that time he has presented at the Practice Development Seminar on Internet and E-mail marketing and he also plays the prospective client during the seminar role play sessions. Chris also edits and contributes to the NCI newsletter, New Client News.