Make Direct Marketing Pay Off





Direct marketing has become a popular and successful form of CPA firm marketing with the following potential benefits:

The process encourages you to define a very specific target audience of prospects most likely to buy your services.

The format enables you to develop a specific message for your target audience.

You can control the timing of when your audience sees your message.

It is the most measurable form of marketing as leads, proposals and sold work can be traced to a specific campaign.

Your campaigns can be integrated with your other marketing efforts (advertising, public relations, Web site, seminars, tradeshows).

If it is repetitive, direct marketing can be a more cost-effective way to build name recognition and position in the market than advertising, since it focuses on your specific target market.

Larry Bildstein , CPA, is the president and CEO of The Whetstone Group Inc. The Whetstone Group helps professional service firms develop and implement growth plans. His e-mail address is .

A successful direct-marketing campaign requires close adherence to five essential components: planning, data gathering, mailing, telephone follow-up and tracking. Effective follow-through on all of these steps can lead to a significant return on your investment.

Lyne Noella, director of corporate strategy at Stonefield Josephson Inc., a Los Angeles-based firm with 162 employees (54 CPAs) and six locations, was instrumental in launching her firm’s “We Pay Attention” campaign. The goal was to increase the firm’s visibility and image to public companies and, ultimately, win more public company business. The integrated campaign included advertising, public relations and speaking engagements as well as monthly direct mail with both in-house and outsourced telephone follow-up. In-house employees responded to public companies that were known to be looking for a new auditor; outsourced professionals followed up with desirable prospects from the mailing database to set up appointments.

“Don’t confuse action with productivity,” says Noella. “Don’t do direct marketing just for the sake of doing it. Have a strategy and a plan. Conduct research, understand your firm’s talents, and respect your audience.”

My company, The Whetstone Group, helped Barbara Bond, CPA, a partner at the California firm Hood & Strong LLP, develop and implement an international tax direct-marketing campaign. The firm, which has two locations in California and approximately 100 employees (49 CPAs), sent a series of letters to a target list of San Francisco-area companies that were likely to conduct business internationally. After the mailing, telephone lead follow-up resulted in scheduled appointments with interested prospects for Bond and her team.

Bond agrees that planning is crucial. “The key to success for direct marketing is the initial planning and the selection of the population to be called.”

Define the target audience. When choosing your audience, consider the criteria of a profitable client. Consider the geography you want to serve, the industry and size of the company, and the decision makers you want to reach.

Establish objectives. Outline what you expect the campaign to achieve. Is your goal to build name recognition? Are you trying to set introductory appointments? Do you expect to close new business?

TD&T, a 55-person (21 CPAs) accounting and consulting firm in Oskaloosa, Iowa, opened a new location in Cedar Rapids, Iowa. The firm developed an appointment-setting campaign to meet potential new clients. “Identifying our objective was easy,” says managing principal Dick Donohue, CPA. “We were starting from scratch and needed clients.”

Send Your Message

The mailing can take many forms, from a 3-D “gift” mailer, to professional, one-page letters on your firm’s letterhead. To increase response rates, personalize the letter and add a signature to make it look less like bulk mail. Individual laser printed and hand-stamped envelopes increase the chances of being opened.


Consider timing. Schedule the campaign at a convenient time for your target audience. Harding, Shymanksi & Co. PSC, based in Evansville, Ind., with 110 employees (43 CPAs) between its two locations, worked with my company to develop a direct-marketing process as one activity that would establish and grow its construction niche. “When our niche team implements direct marketing with outsourced lead generation, we always consider the time of year,” says Randy Schulz, CPA, vice president and the leader of the firm’s construction team. “Our prospects are contractors, and they have seasonal schedules.”

Make sure the timing is convenient for you, too. “You and your team members must have the time for follow-up,” warns Schulz. “If you get too busy to follow up on your appointments, you’re not getting any return on your investment.”

Develop the message. “Craft a very concise and compelling message to convince (potential clients) they need to learn more about what you can do for them,” advises D. Scott Moore, director of marketing and business development at Dixon Hughes PLLC, a firm based in High Point, N.C., with 1,100 employees (470 CPAs) and offices in seven states, which has used The Whetstone Group’s lead generation services.

A well-developed message to prospective clients should follow these guidelines:

Ensure your message is focused on the audience, not on you or your firm.

Address a relevant business need for which you can provide a solution.

Make sure the message differentiates you from your competitors.

“We actually had one prospect comment about our direct-mail pieces, saying: ‘ I was going to throw it away, but it was so compelling ,’ ” says Noella of Stonefield Josephson.


Tips for Creating a Follow-Up Strategy

After the initial appointment, create an ongoing follow-up strategy to turn leads into new clients.

Determine the appropriate frequency of follow-up and continue to mail them information, such as case studies or relevant articles, to keep your name in front of the prospect.

Differentiate yourself from the competition by working your strengths over your competitors into conversations. Tell your prospects why they should work with your firm and not the competition.

Create urgency for the prospect to take action—talk benefits, highlight the opportunities (reduced costs, time savings, improved cash flow) or potential losses (penalties, loss of savings).

Control the next steps. Suggest a meeting with their team or introduce them to other members of your firm.


Prepare for telephone follow-up. Effective direct marketing requires telephone follow-up. Work the phones to schedule face-to-face meetings. This starts the process of building relationships needed to secure new work. In your planning phase, consider who will be responsible for making follow-up calls, who will represent your firm on sales appointments, and whether those individuals have the time and skills to work the sales cycle with the new leads.

“Your people must be comfortable with the process, ready to commit time to the appointments and proficient in consultative selling situations,” says Moore.

“Telephone follow-up helped Hood & Strong,” Barbara Bond affirms. “We can close business, but we are not great at getting the invitation in the door. It also helped that our telephone lead generator scheduled meetings with only those potential clients who were really interested in our services.”

Follow up with a phone call one week after the mailing, and use it as a reason to call. Try to schedule appointments with interested prospects in the following one to two weeks. A quick turnaround capitalizes on the prospect’s sense of urgency in meeting with you, resulting in fewer cancellations.


Ensure Data Accuracy

Use a targeted, focused list to increase your chances of success. For example, to promote employee benefit plan audits, call those companies that have already filed IRS Form 5500, Annual Return/Report of Employee Benefit Plan . For cost segregation studies, call building owners. For R&D studies, call manufacturers who are large enough to benefit.

Lists of your target market can be obtained in a number of ways. One of the easiest ways is by using the Dunn & Bradstreet database through .

Make sure your data is up-to-date. Nothing sabotages your chances of success faster than trying to follow up with someone who hasn’t been with the prospect’s company in years. Call each company on the list before the mailing goes out to make sure addresses and contact names are correct.

“Good contact information is essential,” says Randy Schulz of Harding, Shymanksi & Co. “When you’re calling, you want the majority of your time spent talking to the decision maker.”


The sales cycle for most CPA services is long and tracking the results of direct-marketing campaigns takes discipline. To improve your chances for a positive ROI, consider these questions:

What is the likely dollar value per engagement? For example, are you focused on $500 tax returns or $10,000 audits? The cost to implement the campaign is the same in either case, but it’s obvious which has the bigger return.

What is your typical experience with the sales process? Out of 10 leads, how many are closed?

What is the lifetime value of the new relationships? Are these one-time projects or audits for the next several years?

Moore guided Dixon Hughes through diverse direct-marketing campaigns ranging from a larger campaign directed at long-term care providers, to smaller, more targeted auto dealer campaigns. Overall, the outsourced telephone lead-generation team called 526 decision makers on behalf of Dixon Hughes and set up 38 appointments.

“Our experience shows that once we get a qualified meeting, we can close on an opportunity about half the time,” says Moore.

For Hood & Strong’s campaign, the outsourced telephone lead-generation team called a list of approximately 1,200 contacts over three months, securing 51 appointments.

“Our international tax campaign was very successful,” recalls Bond of the Hood & Strong campaign. “We closed a fair amount of new work and are still closing work. Initially we closed on international tax work, but now these new clients are asking for additional tax services.”

Dick Donohue’s yearlong telemarketing campaign eventually brought in 54 clients for TD&T. “Our firm’s goal is to grow 8–10% a year, and part of that growth will come from appointment setting,” he said. “It’s a numbers game. I know if we can get in the door enough times, we’ll eventually land new clients.”

There are other ways to gauge success.

Stonefield Josephson didn’t track the amount of new work brought in based solely on the direct mail and telephone follow-up, but Lyne Noella says the firm’s gross revenues increased significantly over the past three years, due in part to the integrated “We Pay Attention” campaign. In fact, two of their mail pieces alone resulted in calls that secured at least two large accounts.

Harding, Shymanksi & Co.’s construction niche has implemented six campaigns since December 2001, with the outsourced call team contacting 808 names and generating 47 appointments with decision makers. Although the team doesn’t track work sold by campaign, they know the campaigns have increased the firm’s market brand.

“Name recognition is tough to measure,” acknowledges Randy Schulz. “But if you’re doing your part to increase name recognition and credibility in the market, down the road when the prospect needs help, or is ready to make a move, hopefully they’ll think of you.”


Calculating ROI on Direct Marketing

It’s a good exercise to calculate your return on investment for a direct-marketing campaign. Calculating ROI helps you evaluate the right target markets and methods to promote and sell your services. It also encourages sales follow-up and cross-selling services to new clients to maximize the lifetime value of the relationships generated. Consider the following in determining if your efforts are paying off:

Investing in a first-time campaign to 200 targets costs about $6,000, including list purchase and list cleanup (both one-time costs), development and mailing of a direct mail piece, and outsourcing telephone lead generation. The typical results from such a campaign and sales follow-up are 10–12 leads generated, with two new engagements eventually closed.

To determine if your efforts truly resulted in a positive ROI, consider your margin on the fees generated from new engagements. Typically, CPA firms see a 25%–30% margin on their work. If the new engagements mentioned above generated $20,000 in fees, at 30% margin, the value created is approximately $6,000; you’ve essentially broken even.

If one of the new engagements is an annual audit worth approximately $10,000 in fees per year (assume increases with inflation), and you estimate your average useful life of an audit client to be 10 years, the ROI looks even stronger.


Be patient,” Donohue advises. “When you walk into a meeting with a prospect from an appointment-setting campaign, it’s going to be a different first meeting than if it was a bank or attorney referral. You have to be patient and understand you’re going to have to work that lead. We’ve landed several really nice clients from our campaign—but it may have taken four or five follow-ups to get them to switch.”


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