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1. Title Slide Powered by: ADP LUNCH & LEARN CPE PROGRAM Value-Added Products and Services: Consultative Selling and Cross-Selling Adapted for CPE accreditation by SmartPros Ltd. (www.smartpros.com) with content development and review by the Selbst Group (www.selbstgroup.com). V.1109A The ADP Logo is a registered trademark of ADP of North America, Inc.

2. Today’s Agenda • CPE Presentation • Group Discussion on Review Questions • Review of Program Reference Material • Review Instructions to Complete Course on ADP’s Accountant Web site

3. Today’s Objectives • After today’s presentation, you should be able to: • Understand industry trends in providing value-added products and services • Establish and retain clients through consultative selling techniques • Implement the cross-selling process as part of your standard client communications • Grow your practice through cross-selling value-added products and services

4. Overview of Today’s Presentation • The difference between products vs. services • Trends: The Multiple Disciplinary Practice • Growing your firm through value-added services • Building value-added services through outsourcing • “Consultative selling” for the professional services industry • Cross-selling techniques for growing your firm

5. Products vs. Services • Statement Provided by Author for Group Discussion: • Professional service businesses are generally built around the billable hour. TIME is your product. TIME, however, is a physical constraint. Imagine this…If you could personally bill $1,000 an hour for 40 hours over 52 weeks, you’d generate roughly $2 million in revenue a year. How many of us can do that? Products, on the other hand are more conducive to scale, driven by demand and availability. You build a widget once and then duplicate it. Every widget you sell has a profit margin. The more widgets you sell, the more revenue you generate. • Group Discussion Question: • Do you fee you are bound by the “physical constraint” of the billable hour, and if so, why?

6. Basic Economics… • Basic Economics of Revenue and Profit Growth • Cut expense to provide existing services • Raise prices to existing clients • Cross-selling additional service to existing clients • Acquire more clients KEY POINT: Cross-selling to existing clients is easier and less costly than acquiring new ones.

7. The Multiple Disciplinary Practice… • Looking at the Big Four • The Big Four utilize a wide array of value-added services • Some offerings may be emulated on a smaller scale • KEY POINT: Even though you may service a much smaller market or client base, you still may see some areas you can emulate on your own scale that might be valuable in growing your small- to medium-sized practice.

8. PricewaterhouseCoopers

9. Deloitte & Touche

10. Ernst & Young

11. KPMG

12. The Multiple Disciplinary Practice • The Multiple Disciplinary Practice is considered the pinnacle of value-added services • Professional services are inherently related • The Multiple Disciplinary Practice offers instead of refers • Value-added services can be arranged to fit your needs • Co-engagement • Referring • Outsourcing • KEY POINT: Your role as THE Trusted Advisor puts you at the center of this circle in servicing your clients. Of course, you choose the extent of your service offerings, and the manner in which you deliver such offerings.

13. Value-added Services… • Value-added Services for the Small- to Mid-Sized CPA Firm • Financial planning and asset management • Payroll, retirement, and benefit solutions • HR services • Legal services • Insurance services • Fraud consulting • Valuation • Technology consulting and implementation • KEY POINT: These are all areas where you can find either a CPA-branded solution, a co-engagement partner, a referral partner, or an outsource partner that will enable you to offer such solutions to your clients.

14. Potential Benefits… • Outsourcing or Referring… • Allows you to focus on OTHER revenue opportunities • Can broaden and increase the number of clients you can service because most outsourcing is SCALABLE. • Gives you access to the latest, greatest and most expensive technologies • Can provide complete, turnkey solutions • Usually involves a controlled upfront investment • Often comes with less risk • Can provide growth with a predictable ROI

15. Examples… • Examples of Outsourced Solutions • Retirement services • Benefits administration services • Payroll/payroll tax administration • Time and attendance solutions • State unemployment insurance management • Worker’s compensation insurance

16. Selling Value-added Services • Value-added services alone won’t provide growth • Consultative selling techniques are key to the professional services industry • Using consultative selling techniques to cross-sell products/services

17. Attributes of Traditional Selling • Pushy – • “I’m going to tell you what you need.” • Aggressive – • “You are making a mistake if you don’t do this.” • Close the deal – • “What is it going to take to get you to buy this right now?” • Transaction focused – • “Thanks for your money. Don’t call me unless you want another one.” • Take it as-is – • “Sorry if it’s not right for you, it’s all we have.”

18. Attributes of Consultative Selling • Mutually beneficial relationship – • “We both benefit from give and take.” • Built on trust – • “You’ve taken care of me in the past. I trust your judgment.” • Client advocacy – • “I’m on your side. I’ll fight my own company for you.” • Ongoing contact with timely follow-up – • Frequently touching bases, and always following up meetings with a summary of tasks and deadlines. • Focus on the client’s longer term goals – • “I’ll pass on the sale today for a better opportunity tomorrow.” • Custom-tailored solutions to client needs – • “If it doesn’t meet your needs out of the box, I’ll customize it to meet your needs.”

19. Benefits of Consultative Selling • View challenges from same viewpoint • Better investigation of client’s business model • More opportunities to cross-sell and cross-refer • Less cold calling • Get opportunities to “match best price” • Loyalty makes it harder for clients to walk away

20. Roadblocks to Consultative Selling • Slower sales cycle • Investigation process is time consuming • Need to build a relationship before selling • Telling the client what they don’t want to hear • KEY POINT: Personal communication is a major factor. Personal communication is a requirement of consultative selling, and not everyone has a natural strength in this area. Taking communication skills classes is always a benefit to growing your practice

21. Communication Skills… • Communication Skills in Consultative Selling • ASK clients what they need. Don’t TELL them. • LISTEN and TAKE NOTES. • Match your capabilities to meet THEIR needs. • ALWAYS follow up meetings. • Provide a summary of the discussion • Outline the client’s stated needs • List action items, deliverables, and a timeline

22. Why Firms Lose Clients • Firm does not communicate well with client • Firm doesn’t listen to client’s needs • Poor follow-up • Firm is reactive, not proactive • Poor product/service quality • Flaws or errors in product/service • Poor customer service • Firm does not evolve as client needs change • Firm doesn’t offer full service • Firm and client are not equally invested • Client doesn’t feel firm is “partnered” with client’s business • Client feels firm only wants client’s money

23. Cross-selling is… • taking advantage of an existing relationship to introduce, offer or refer additional products and services in an effort to increase the revenue potential from that client.

24. The Cross-selling Process Six Steps to the Cross-selling Process: • Reach out to clients • Investigate • Match solutions to client needs • Gaining agreement • Managing objections • Gaining commitment KEY POINT: Consider using these bullet points as a cheat sheet in your next client meeting. Think of it as a way to shape and guide the discussion.

25. The Cross-selling Process, continued • 1. Reach out to clients • Get on the phone or send a personal e-mail • Review current programs • Discuss new capabilities

26. The Cross-selling Process, continued • 2. Investigate • Always use open-ended questions • Don’t make assumptions and jump to a solution • LISTEN and TAKE NOTES • Ask them … • What’s new in their business • What’s working well • What isn’t working well • What the company’s current goals are • What methods will achieve those goals • What specific issues need the most attention • Summarize discussion back to client in their own words

27. The Cross-selling Process, continued • 3. Match solutions to client’s needs • Funnel clients from wide concepts to specific needs • Stand in their shoes. What is the “value proposition” to THEM? • Don’t try to close too soon

28. The Cross-selling Process, continued • 4. Gaining agreement • When the client appears ready, ask them to state: • How the product or service might benefit their company • If they see any issues or concerns (barriers) • NOTE: Those barriers are commonly referred to in sales speak as “objections.”

29. The Cross-selling Process, continued • 5. Managing objections • TAKE NOTES and LISTEN • Acknowledge any concerns • Re-state client problems in their own words • Brainstorm flexible options and solutions • Discuss issues until client appears comfortable moving forward KEY POINT: You will go through this cycle until the client is out of objections and you are in general agreement about your proposed solutions.

30. The Cross-selling Process, continued • 6. Gaining commitment • When the client appears ready, you need to ask for the business • Immediately follow-up with action items and a timetable • Keep in touch – start the process over KEY POINT: The key is to stay in touch on a frequent basis to discuss business in general. Not only to service your existing products and services but to keep a pulse on cross-sell opportunities as your client’s business, and your business, evolve.

31. Summary of Today’s Presentation • Services vs. products • Trends: The Multiple Disciplinary Practice • Growing your firm through value-added services • Building value-added services through outsourcing • “Consultative selling” for the professional services industry • Cross-selling techniques for growing your firm

32. Discussion Questions • 1. What are your thoughts on the concept of the “Multiple Disciplinary Practice?” Is the trend real, and if so, how does it effect your firm?

33. Discussion Questions, continued • 2. How active has your firm been in up-selling additional products and services? What are some of the strategies that seem to work well for you?

34. Discussion Questions, continued • 3. Do you plan on adding any additional value-added services in the near term? If so, what are the most realistic for your firm?

35. Discussion Questions, continued • 4. Have you noticed any trends in your clients asking you for advice in non-traditional CPA offerings? If so, what kinds of tangent products or services do they value your opinion on?

36. Discussion Questions, continued • 5. Lastly, what is the single most important aspect to growing your business, and why?

37. Next Steps • Review Handout Material for Additional Content Information • Review CPE Card • Access CPE Certificate by Completing Online Components Through www.accountant.adp.com Thank you