The key to your business’s future isn’t innovation, or learning, or finding your next competitive advantage — though each of those things is vitally important and will give you a huge leg up on the competition.
No, the biggest key to your future success is people.
Think about it: Are you trying to sell stuff or solve problems? Are you worried more about your own ROI or the value you add for others? Is your attitude “What’s in it for me?” or “What can I do for you?”
How you answer those questions will determine what comes next for you and your business.
Robbie Kellman Baxter understands that better than most. She’s the author of the best-selling The Membership Economy, a bible of sorts for the era of social business. “I define membership as the state of being formally engaged with an organization or group on an ongoing basis,” Baxter writes. “An organization able to build relationships with members — as opposed to plain customers — has a powerful competitive edge. It’s not just changing the words you use; it’s about changing the way you think about the people you serve and how you treat them.”
Baxter’s point is clear: When you start treating your stakeholders as members rather than mere customers, amazing things start to happen.
“Companies that enjoy a membership relationship with their customers are enjoying multiples of about eight times of their transactional peers,” Baxter told me recently. “The companies that understand how to create subscription models and build community and create stickiness are seen as being imminently more valuable than the ones that don’t.”
This mindset goes way beyond the association / not-for-profit business model. CPAs should care about this stuff as much — if not more than — traditional membership organizations.
“This is what consumers expect,” Baxter told me. “They’re getting these experiences from LinkedIn and Facebook and Pinterest and Pandora. They expect to be known and recognized. They expect the relationship to not be transactional but to be smooth and ongoing, and they expect a constant evolution of value. They want new things from everybody with whom they do business. If you think about a professional services provider, an advice provider, they’re thinking, ‘I don’t just need advice in these specific moments. I need advice on an ongoing basis. I need to get smarter about these areas, and I need to have access to examples of other people who are dealing with the same issues that I am.’ An accounting firm can harness that power by bringing together like-minded clients and allowing them to talk to one another.”
Baxter said the Big 4 are doing a pretty good job of this already, but smaller firms have an opportunity of turning the tables as well.
“The most fruitful question you can ask yourself is this: What is it that brings my clients to me, and how can I solve a bigger part of their problem?” Baxter said. “If they’re coming to you when they have a problem, what they want is to not have the problem in the first place. That’s when you can say, ‘Here’s what can I offer so that you don’t experience that problem.’ It’s not about selling services. It’s about solving problems.”
It’s also about knowing when to start tinkering with your business model. As leadership guru Emmanuel Gobillot is fond of saying, “What got you here won’t get you there.” As technology automates and commoditizes many of their core services, smart CPAs are already looking for their next competitive advantage.
“Look at what you’re offering at all times with a critical eye and ask yourself, ’Is this really where we should be?’” Baxter said. “Is someone else able to do this more cheaply and easily than we do, and should we cede that turf? … If someone else can do it for free, don’t do it. Say, ‘Thank you very much for helping to move our cause forward and for taking care of a portion of our mission, and now we’re going to focus on the next thing on our list.’
“The other piece,” she added, “is to keep asking questions of your members: Where do we provide value? What is it that we’re not doing that we could be doing? Even if you don’t know what we could be doing, tell us what your challenges are, because we can keep going there.”
The key is to keep growing, and always with an eye on the future — and what you can do for others.
“There will always be a need for people who can solve unique problems, who can anticipate problems and who can educate,” Baxter said. “As long as you keep moving toward that and let others handle the commodities, that’s where the greatest profitability is.”
Listen to my interview with Baxter in its entirety.