On demand and one-stop shops
Millennials.
They look for love with the swipe of a finger, they expect their music streamed and their TV on demand. They expect a phone to be a TV, a stereo and a camera.
They expect a watch to tell them the time, their emails, their heart rate and how far they’ve walked each day!
They’re a demanding bunch.
Maybe that’s a little harsh. To be fair, most of the technology touched on above is now commonplace.
You might be old enough to remember when a phone was just, well, a phone. Maybe you even remember when taking a few holiday snaps meant waiting a week for your photos to be developed – at which point you’d get handed a sleeve of bright white, or orange tinged, indistinguishable bits of paper.
As new technology is developed and adopted our expectations change. We’ve become precious and protective of our time. It seems the more of it people try to give us, the more we value it as a commodity.
Those technology natives, who wouldn’t know a pay phone if they walked barefoot through the usually broken glass of one, have grown up in a world of immediacy. Hand one a shopping list and ask them to visit the butcher, fishmonger and greengrocer to fulfill it and they’d likely give you the same blank look you’d get if you asked your puppy to do it.
But what does all of this hyperbolic millennial-bashing have to do with you? I’m glad you asked.
A recent study by bill.com into the expectations millennial business owners have of their financial advisors, raised some interesting trends.
| TOOL1 | <39 | 40–55 | 56+ |
|---|---|---|---|
| Taxes | 83% | 92% | 83% |
| Bookkeeping | 54% | 34% | 30% |
| Sales tax | 28% | 19% | 22% |
| Payroll | 31% | 26% | 19% |
| Audits | 25% | 27% | 33% |
| CFO services/consulting | 31% | 17% | 10% |
| Accounting technology recommendations and training | 24% | 16% | 8% |
| Bill payment | 22% | 14% | 8% |
| Budgeting/forecasting | 23% | 14% | 9% |
| Invoicing | 20% | 8% | 4% |
| Collections | 10% | 7% | 5% |
As the table shows, the demand for compliance and bookkeeping services remains predictably important. Where things get interesting, however, is when you get down the list into some of the more value-add services:
31%
CFO services
24%
Technology
recommendations
22%
Bill payment
23%
Budgeting
Millennials it seems, just don’t have the time or inclination to meet these needs alone.
Indeed, in the same report is a list of critical accounting firm traits ranked by millennials.
Third in their list?
"Is versatile and able to provide a wide range of accounting, tax and financial services"
42%
Put short, modern business owners are looking for a one-stop shop of accounting.
What is a one-stop shop?
A one-stop shop is a company that offers its customers a multitude of products or services.2
And the award for the most obvious answer to a question goes to...
What it means to be a one-stop shop has changed dramatically in recent years though.
Think supermarkets – one of the original one-stop shops. Love them or hate them, most of us turned our backs on high street shopping for the convenience of having all our groceries available under one roof. But who would’ve thought that one day you’d be able to pick up a new credit card and house insurance with your meat and veg?
Increasingly, consumers are looking for the same level of convenience in their professional services. As the bill.com study shows, the new age of business owners wants a single point of contact for a wide range of their needs.
Technology is facilitating the ability of accountants and bookkeepers to fill that role, offering personalised and real-time answers, either independently or through cooperative models, with other companies.3
While integrating these services may cause short-term disruption to current structures and practices, but it could also present a significant competitive advantage.
A 2015 Accenture report4 showed that banking customers are increasingly looking for services beyond those of traditional banking. There is little to suggest this attitude won’t cross over into their choice of other professional services if it makes it easier for them to control their finances.
Jack of all trades, or master of none?
So, if one-stop shops are nirvana, why aren’t we all building them?
Well, for a start, change can be complicated, costly, and frankly, a bit scary. But that’s not the whole story, there are some inherent benefits of carving out your own niche.
Standing out from the crowd
Expertise, advice, experience. When what you’re selling is frequently intangible it can be hard to differentiate yourself from the competition and, in a world of one-stop shops, finding your unique selling point is even harder.
Know your clients
No one understands your clients’ businesses, and their needs, like you. If you’re meeting their needs and building a reputation for expertise in a particular field, why change?
Stay flexible
If you know and understand your clients it stands to reason you’re in a great position to see changes in your market coming ahead of time and can adapt accordingly. This is much easier to do if you concentrate on a small number of services.
Attract better clients
With an increased focus comes an increased understanding of what you offer and what you’re best at. When the market knows this you can expect to attract an audience whose needs are closely aligned to the services you provide.
Experts are just, well, better
Who doesn’t like to know that their problems or issues are being addressed by an expert? If you prove your expertise, you send clients away happy. With happy clients comes a great reputation. With a great reputation comes more clients. It’s easy.
A convenience truth
So that’s that then, expertise wins over choice.
Well, not quite. There are reasons why larger firms undertake aggressive acquisition strategies and why they’re looking at more and more niche service providers. Primarily, because it seems to be what clients want.
Beaton Research and Consulting surveyed 25,000 people to try and understand if they prefer a one-stop shop. And it seems they do. In the world of accounting, they found that client satisfaction rose with each new line of service offering they were exposed to up to 5 lines.
"It’s really interesting to see that clients enjoy cross buying, we have the first incontrovertible evidence of this"
George Beaton Executive Chairman, Beaton Research and Consulting 5
But what’s in it for me?
Ok, so one-stop shops give clients convenience and at least the impression that they have more bargaining power, but what are the benefits to you and your business for making the change?
More clients
The evidence all points to clients wanting a one-stop shop so it stands to reason that they’re out there looking for one. Take the hassle out of their search, be the firm that can satisfy all their needs and new business will flow.
Higher revenue
It’s not just the number of new clients through your door that will help your bottom line. Clients like to cross buy. Present your customers with new lines of service and they will happily pay for services they didn’t know they needed.
You control the conversation
By becoming your clients sole point of advice, you’re able to understand exactly what they need. You can control their overall experience and precisely manage what they’ve been promised. No more having to deliver on other people’s promises.
Better relationships
More to the point, stickier clients. As their sole point of contact for business advice you will know them better than anyone. Managed well, it’s incredibly difficult for clients to leave a relationship with a trusted advisor who knows the nuances of their business.
No longer compete on price alone
The ability to tailor services to the direct needs of specific clients increases their level of trust. Clients who build a personal connection with your firm are far less likely to have their heads turned by financial offers or the aggressive pricing strategies of your competitors.6
One-stop shop or expert advice. Which is it?
There will always be a home for experts. Even in the world of one-stop shops, many different disciplines and skill sets are required to meet all the service-offering requirements that clients have.
While building your own one-stop shop may seem like a lot of work, it will save time and frustration in the long run. The next generation of business owners will demand one-stop shopping for their financial services, and it would be irresponsible not to consider how your firm is going to meet those demands.
As the bill.com study showed, future clients are going to seek out firms who can offer a wide range of services and it would be a challenge for anyone to meet all of those needs without building scale.8
Perhaps you’re lucky enough to have the time and resources to consider a plan to build your own one-stop shop? If not, it may be time to consider partnering with an accountant, bookkeeper or financial planner to meet your clients’ demands together.
"I do believe that in the next five to seven years, we will see a convergence between the financial planning profession and the accounting profession. I believe that clients will pay for this type of advice because they are looking for a one-stop shop."
Matthew Rowe MyAccounts Executive Director 9
Speak to your clients. Find out what they want. Aspire to be their key advisor. Be the person your client thinks of first when a decision needs to be made about their business – and make sure you’re giving them what they need. In a world where they can get insurance, a credit card, and a bunch of bananas in the same place, who knows where they might turn for advice if you don’t?
1 http://cashflow.bill.com/rs/657-XMM-212/images/Bill.com%202017%20Millennial%20Business%20Owner%20Survey%20Special%20Report.pdf
2 https://www.investopedia.com/terms/o/onestopshop.asp#ixzz56BoadYtO
3 https://hornellp.com/media/1679/becoming-the-firm-of-the-future-whitepaper.pdf
4 http://www.forbes.com/sites/tomgroenfeldt/2015/05/11/financial-services-customers-are-fed-up/2/#6c35f350551e
5 http://www.afr.com/business/accounting/clients-prefer-a-onestopshop-20150921-gjrin0#ixzz56BuCrWME
6 https://www.investopedia.com/articles/financialcareers/07/multi-service.asp#ixzz56BqV4Psg
8 http://riskinfo.com.au/news/2013/04/23/consultancy-predicts-rise-of-the-one-stop-shop-advice-practice/
9 https://www.accountantsdaily.com.au/professional-development/10084-client-demand-for-one-stop-shop-grows