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The steps to successful revenue replacement
Written on Sep 28, 2023
By Jessica Salerno-Shumaker, OSCPA senior content manager
Adapting a business model can be an uncomfortable, yet necessary process for firms who want to remain sustainable long-term.
“Firms are seeing that they need to evolve their business model because the business model that got them to where they are today won't get them to where they want to be in the future,” said Jon Hubbard, shareholder and chief growth officer at Boomer Consulting.
Hubbard will present “Revenue replacement: A new approach to growth and client filtering,” at the upcoming fall Ohio Accounting Shows.
A crucial aspect of this evolution is about replacing “non-fit revenue” with “right-fit revenue,” Hubbard said. Understandably, Hubbard said firms are hesitant to let go of any revenue at all, even if it’s relatively small. This doesn’t mean immediately firing all clients who don’t aren’t the right fit, but rather focusing on finding the right-fit clients over time and incrementally letting go of non-fit clients.
The first step is identifying the right clients. He says to consider how you would describe the ideal client, their characteristics and challenges.
“If we can identify target clients that allow our firm to rally together in pursuit of them, we will increase our chances of winning that work,” Hubbard said.
Target clients require firms to be “on their A-game,” Hubbard said, forcing the firm to come together with a one team mentality to ensure the client is receiving the best comprehensive service possible. He also said there’s a difference between a “target client,” and an “ideal client,” because ideal clients can come with emotional baggage. Just because a client is easy to work with and you’ve established a great relationship with them over the years doesn’t mean they’re a target client, or that they’re worth keeping.
After you’ve found your target client the next step is developing a robust package that you can offer. Because you’ve identified the target client you understand what makes the most sense for them and can have a holistic conversation around possible services.
Find out the next steps to further develop at Hubbard’s session this fall.