Make Your Firm A Household Name
How one firm forged a brand name identity.
What sets your firm apart from your competitors? You assume it is your commitment to quality, the one-on-one relationship you have with clients or the variety of services you offer. But how would prospective clients—people who have never set foot in your office—understand what differentiates you from the rest of the pack? You have to make your firm name synonymous with the firm’s image and an assurance of quality. One way to do this is to transform your firm name into a brand name—a high-profile symbol the public recognizes when they need professional services. 
(ILLUSTRATION BY: KELLEY GRAPHICS)
The CPA designation already sets you apart from other service professionals, but it alone will not position your firm ahead of other firms and the many new full-service companies, such as American Express and HRB, that invest millions of dollars each year in marketing and brand identity campaigns to ensure they remain household names. Your firm does not have to spend millions of dollars to brand itself: It does, however, need to do more than just create a new logo. In developing a brand, you have to commit to marketing your value-added, high-quality services consistently for every client. You also have to ensure your brand reaches prospective clients at every opportunity.
Lyne Noella believes brands work for firms much the same as they do for product manufacturers. (PHOTO BY: DALE DEHMER)
WHAT IS A BRAND?
Lyne Noella is the managing director of marketing at Larson, Allen, Weishair & Co., LLP, a 90-member firm in Minneapolis. Noella joined the firm in 1998 and spent her first three months conducting a “marketing audit” to determine how the firm’s structure, services and culture related to its vision and development plans. She found the firm had a terrific business and a great management team, but the firm image was inconsistent and fragmented—everyone was doing his or her own thing, office by office. The partners wanted a more focused approach to marketing and asked Noella for a solution. She decided that creating a firm brand would offer the public a neat, recognizable package that would equate with the firm’s quality services.
The first step in getting the brand identity project approved was to explain what branding meant and how it would sell the firm to new clients and attract strong strategic alliances. Noella asked the partners what they thought when they heard the names Mercedes, Xerox and Nike. She explained that a strong brand works for professional services firms much the same as it does for product manufacturers—the brand provides customers with an assurance of quality. “A brand is the consumer’s perception that a product or company is distinctive and offers more than the competition,” said Noella. “Developing a brand means capturing the firm’s image, services and goals and marketing it all in one consistent, high-profile package.”
She then explained how an accounting firm could benefit from a good brand. According to Noella, a dynamic firm brand
- Differentiates the firm. To be noticed, you must stand out.
- Creates a strong marketplace image. A brand makes the firm distinctive but also “familiar” to those who come in contact with it.
- Projects quality. In a business where the services aren’t as tangible as a product, the brand can make a statement about the quality and nature of an organization before a prospect even sets foot in the door.
- Projects the firm’s culture. You know by the brand the environment the firm creates for its staff and clients.
- Positions the firm. A brand provides context—it relays to a prospect that your firm is a Saks-Fifth-Avenue-type firm that caters to high-income clients or a K-Mart-type firm that provides a variety of basic services for lower fees.
- Conveys strength. The brand conveys decisive leadership and a strong foundation.
- Serves as a springboard for “stand-out” marketing. A brand is an excellent platform for innovative marketing strategies.
Noella and the firm partners recognized that selling value often is more successful and profitable than selling price alone. The partners agreed that a brand would help express the value of their CPA firm and, thus, attract the kind of clients they wanted. They gave Noella the green light.
Larson, Allen, Weishair & Co. principals look over the three branding concepts during a special offsite retreat.
THE TEAM APPROACH
Noella created a nine-person “branding” team that was made up of five members of the firm’s marketing division who did initial brainstorming and copywriting, a principal in its executive search division who represented another branch of the firm, an outside graphic designer, a client from a technology company to offer fresh, independent ideas and a Web site architect. The team’s charge was to come up with branding “concepts” it could present to the firm’s CEO and board of directors. The team met once every two weeks to brainstorm for ideas, and it came up with the following three concepts:
Concept no. 1: Tradition with a twist. This approach conveyed the idea of a traditional, quality firm with a sense of humor to attract a younger, more diverse client base. It used a service bell as its logo.
Concept no. 2: The sporty LarsonAllen. This concept personified the youthful, dynamic culture of the firm to attract young, prosperous clients. It used vibrant colors and strong typography to carry it forward.
Concept no. 3: The global LarsonAllen. This was a more global, corporate approach to business that emphasized energy, leadership and the power to carry it forward in the world market.
The branding team then presented the concepts to its CEO, Gordon A. Viere, and the firm’s board. The meeting lasted more than two hours—Noella had expected it to take 20 minutes. Viere and the board agreed the marketing group should set up a retreat offsite so the branding concepts could be presented to the firm’s principals. The team created mock logos, stationery and advertising campaigns, as well as a Web site design and other props to rev up the audience. The branding team also visited various firm branch offices to get as much feedback as possible. “We made it clear that the brand would not be chosen by popular vote, but that all comments would be carefully considered during the selection and revision process,” said Noella.
Each presentation stirred up differences of opinion and lots of comments. “The thoughtful, enthusiastic— and sometimes brutal—responses forced us to think hard about our approaches and consider alternatives,” said Noella. To get a “second opinion” from outside sources, the branding team contacted friends, referral sources, such as local attorneys and insurance agents, and business-executive clients from different industries. The team communicated with its sources face-to-face, over the phone and online. Noella even contacted the Minnesota commissioner of trade and economic development to discuss the strengths and weaknesses of the three concepts.
| Filing and Accounting for Your Brand |
| Favorable tax status |
| The current tax environment seems favorable for businesses wishing to transform a corporate or firm name into a brand. Such trade-name expenditures no longer have to be permanently capitalized—at worst, they must be amortized over 15 years; at best, a company can take an immediate tax deduction. The appropriate tax strategy, therefore, for a business is to deduct a “justifiable” amount of these “branding” costs as advertising and amortize the remainder over 15 years as trade-name costs. Three recent developments helped create this favorable environment by reducing the aftertax cost of establishing a brand identity. Before 1993, trade-name expenditures had to be capitalized, but could not be amortized. Now, such costs are included under IRC section 197, which allows goodwill and certain other intangibles to be amortized. The rules generally exclude “self-created” intangibles; however, proposed regulations section 1.197-2(d)(2)(iii) clarifies that developing a trademark or trade name is an exception. Such costs should be amortized over at least 15 years. In 1992, the U.S. Supreme Court’s Indopco decision (503 U.S. 79, 1992) expanded IRS power to capitalize costs that result in future benefits. To ease fears it would use Indopco to snare advertising costs, however, the IRS issued revenue ruling 92-80 (1992-2 CB 57). The third crucial development came out of RJR Nabisco (76 TCM 71, 1998). Concerned that allowing virtually all advertising to be deducted was “giving away the store,” the IRS drew a distinction between the costs for developing a campaign (capitalize the costs of developing the message or image) and those for executing a campaign (deduct the costs of the ads that implement the message). The Tax Court was unimpressed by the distinction; its position was that revenue ruling 92-80 effectively prevents the IRS from applying Indopco to advertising. But even if the IRS continues to push its position, many of the costs incurred by LarsonAllen (Web site, magazine and brochure development, print ad campaign, trade show booths and specialty items) appear to be deductible as “execution” expenditures. CPA firms may have to segregate deductible advertising from capitalized (but amortizable) trade-name expenditures. Since the IRS was defeated in its attempt to capitalize some advertising as “brand equity,” it may be more aggressive in requiring a brand name to absorb expenditures that would typically be expensed. Common practice is to capitalize only the legal and registration fees in securing a trade name. |
| Accounting for intangibles |
| For financial reporting purposes, APB Opinion no. 17, Intangible Assets , governs the accounting treatment of brand names. Generally, costs a business incurs to develop, restore or maintain a brand name may be expensed as incurred if they do not meet other criteria specified by the APB, including determinable life and “specifically identifiable asset.” Traditionally, when brand names are part of the purchase of another company, their value has been included in goodwill. In its 1994 report, the AICPA special committee on financial reporting specifically addressed the confusion and problems in accounting for self-developed intangibles of service firms: “We are not enamored of recording self-developed intangible assets unless their values are readily apparent. We consider the cost of creating them to be so often unrelated to their actual value as to be irrelevant in the investment evaluation process. Furthermore, it usually is next to impossible to determine in any sensible or codifiable manner exactly which costs provide future benefit and which do not.” |
| —Prepared by Melanie J. Earles, CPA, DBA, assistant professor of accounting, and Larry Maples, CPA, DBA, professor of accounting, Tennessee Technological University, Cookeville. |
MAKING THE CHOICE
Based on the feedback it got, the branding team chose the “global LarsonAllen” concept. “The partners wanted to emphasize that the firm had “no borders or boundaries,” said Noella. We have many international clients and we have set up a number of important strategic alliances with service providers abroad.
The team refined the brand based on the staff comments, including changing the logo color and rewriting the firm slogan, and then rolled out an information campaign to everyone involved. “The global LarsonAllen brand reflected the philosophy and approach of the entire firm,” said Noella. “The principals and board agreed that the concept captured the way the firm interacted with its clients—it symbolized our work ethic and firm culture.”
The chosen brand highlights the name LarsonAllen and includes the slogan “Achieve the Desired Effect.” The theme of the brand is the sun, which, according to Noella, signals energy and leadership as well as a global and progressive approach to business. The logo was set as a horizontal, with a clean-looking typeface. “The slogan is the firm’s promise to apply its talent and resources to bring about the results the client wants,” she said. After selecting the official firm brand, Noella and the design team had to develop creative vehicles to disseminate the new brand among clients, referral sources, prospects and the business community at large.
Brand identity must be delivered to the target audience through paid advertising—for a broad reach at a high frequency—and through public relations—to earn recognition. Besides appearing in the standard information releases, the logo made its debut on the firm’s Web site, its new four-color magazine, a brochure, print ads and trade show booths, as well as on a host of specialty items, such as chocolates, tea bags, T-shirts and mugs that were distributed to promote goodwill and perpetuate the firm brand at meetings with clients and alliance partners, trade shows and seminars.
Once a firm chooses a brand, it must deliver it to the target audience through paid advertising such as these LarsonAllen print ads—for a broad reach at a high frequency—and through public relations to earn recognition.
THE COST OF COMMITMENT
The cost of developing a firm brand can be high. It generally is relative to firm size because it is essential that your branding team spend all of the time and resources necessary to include the partners in all your firm’s offices. It took the newly named LarsonAllen six months to develop the brand and see it implemented. The highest cost was the hours staff spent working on the project; however, the firm saved in actual dollars spent because it used its own inside marketing group, it had a strong leader in Noella, who aggressively drove the process, and it had partners who supported the project from the very start.
Included in the cost of disseminating the brand are essential advertising, stationery and signage expenses and the expenses associated with the production of specialty items to perpetuate the brand. “You could spend all the money in the world introducing your brand to the marketplace,” said Noella, “or you can limit your costs by focusing on a few core communication vehicles, such as a Web site for international exposure, a print advertising campaign and all the firm’s publications.” The balance of the branding campaign can be supplemented inexpensively both by using press releases and by ensuring the firm’s staff communicates the brand to clients and referral sources. “A strong brand serves as a springboard for our staff to discuss with potential clients our firm’s philosophy of doing business,” said Noella. “Our staffers often repeat the slogan ‘Achieve the Desired Effect’ when they discuss the firm services.”
It is still too early for the firm to measure the results of the branding campaign in terms of new clients. However, Noella said that the firm’s strategic partners were very enthusiastic about the new brand. “Recognition and acceptance of the brand by the firm’s strategic partners were critical for us, especially as we engage in high-level joint ventures.”
| Steps in the “Branding” Process |
| Ensure that the leadership is ready to commit the resources and time necessary to brand the firm. Form a branding team that consists of internal and external staff to ensure the brand is “broad-minded.” Come up with a variety of branding concepts. Seek feedback from firm partners and staff. Seek feedback from the marketplace (alliance partners, referral sources and clients). Choose the brand. Implement the brand firmwide, using all communications channels, and ensure the staff perpetuates the brand at all client meetings. Launch a public-relations information campaign to get the word out about your new brand. |
FIRM AS ICON
The idea of brand development may be difficult for some CPAs to grasp—after all, many of them are still grappling with the basics of marketing. However, over time, CPAs will see their competitors creating brand identities for their firms. To stay ahead of the competition, CPAs will have to commit more time and money to marketing. Branding the firm, such as LarsonAllen did in Minnesota, is a great way to make your firm name a popular icon that the general public associates with quality. Sell your services just as Volvo sells safety and Tiffany & Co. sells quality—your firm will imprint itself on the minds of prospective clients and business partners.
JOHN VON BRACHEL is a Journal senior editor and editor of The Practicing CPA . He can be reached by e-mail at jvonbrachel@aicpa.org . Mr. Von Brachel is an employee of the AICPA and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.
