Business Review Weekly

Money Guide Week Telemarketers reel in big, new clients By Tony Thomas

Adventurous firms are winning good clients by telemarketing, a technique frowned on by much of the profession. Because switching accountants ousts the incumbent, firms that telemarket are unpopular among peers. But as one marketer puts it: "Clients stay loyal even to accountants that are killing them."

The deputy director of the Institute of Chartered Accountants, Allen Blewitt, believes referrals and direct approaches by partners generate a higher class of long-lived business than cold calls, which often irritate prospects. "Ethical telemarketing depends a lot on the coal-face professionalism of the telemarketer," he says.

"If a prospect says he already has a good accountant, the marketer should leave him alone, not harass. The institute defines how a new accountant should take over, but how the client is won is more a grey area. Firms should not hire the sort of telemarketers who go for the jugular every time."

Alan Muir, a partner in the Melbourne firm Haines Muir Hill, says his firm began telemarketing four years ago, after two Big-Six firms made heavy approaches to its prized clients. Telemarketing has won about 25 clients, including half a dozen big ones.

Typically the fees won are $5000-15,000. The firm has six partners, 31 staff and $3.3 million fees, with partners charging $190 an hour. Partner Peter Fry obtained an initial database from the EastNet business association, and hired Roy Martin of First Approach Marketing to make calls a couple of days a week. Muir says, "We gained one $50,000 client and one $65,000 client, who came in after two years on our mail-list. One had changed among six firms within nine years and was momentarily without a firm. It has stuck with our firm for four years. The other had been unhappy with a large firm."

Initially not enough pre-screening of targets was done and partners had a hard slog with prospects grousing about a previous accountant's $1200 fee. Because of obsolete databases, some meetings were set up with tiny businesses or major corporations. Now the prospect is screened and warmed with an advance phone call. Interviews are allocated among four partners. He says: "We often wonder why bother, but we come away from some thinking, well, there might a chance there. Many are at least interested in our financial planning."

The firm's affiliates in Newcastle, Perth, and Sydney are considering the use of telemarketing; the Adelaide and Brisbane affiliates began it last year. "The key is using a streetwise telemarketer who knows a bit about accounting services, not just flower deliveries and mobile phones. A good one will even chase the BHP audit. The weak ones get thrown by unscripted questions," he says. The firm chose to pay an hourly rate of about $28 for telemarketers rather than a commission rate on fees won.

The database contains businesses with 10 to 100 employees, and turnover of more than $500,000.

Elliotts Partners, in central Brisbane, has been telemarketing for 12 months. Partner Matthew Schlyder says it has cost about $9000 and generated an extra $50-75,000 fees, more than 60% recurring. The firm, which has seven partners, 34 staff and fees of about $3 million, bought high-quality lists of up to 1000 small businesses from Dun & Bradstreet and others. The businesses have at least $500,000 turnover and five employees, in any industry in southern Brisbane. The firm hires phone workers for a day per week through Roy Martin's group. They work from an outline of the firm's services (not a script) and their target is to win an appointment.

Telemarketers get through up to 100 calls, of which about a third are follow-ups. Many prospects say they are happy with their accountants, but a day's calls generate three or four appointments with people wanting a change or help with specific needs. From these, the firm wins about 10 new clients a year. The per-client fees range from $3000 to $15,000. The firm has rejected some marketers who were not up to scratch, he says.

Partners have coupled their personal marketing with use of the Focus for Results business-needs analysis program and offer a free one-hour interview. This has led to fees of up to $15,000 from single clients. "We tell prospects we want to be their accountants; we play off the front foot but are very ethical about it," he says. Other wins merely involve providing computer consultancy, business development, and pharmacy consulting and valuations (the firm already has 40 pharmacy clients). The firm describes itself as "business advisers", not accountants, in its marketing of special services. Partners observe the ethical procedures for changeovers of accountant.

Schlyder says some partners worried about a car-salesman image, but successful trials changed their attitude. Another Brisbane firm, Drake & Murphy, uses the same telemarketer to prospect the northern Brisbane market. Partner David Drake says the technique is "very powerful".

Money Guide week is edited by Tony Thomas