Who's Really the BOSS?

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Rachel Dillon: Welcome to Who's Really the Boss podcast. I'm Rachel Dillon, and along with my husband, Marcus Dillon, we share the joys and challenges of leading a $3 million accounting firm together. From team structure to growth strategies, we share our leadership successes and failures so you can avoid the mistakes we have made and grow a valuable accounting firm.

Rachel Dillon: Welcome back to another [00:00:30] episode of Who's Really the Boss podcast.

Marcus Dillon: Hey, thanks for having me back.

Rachel Dillon: All right, so we need to do a quick girls update. What's the latest?

Marcus Dillon: Somehow I got signed up to run a 10-K and half marathon, so, um. Yeah, we'll we'll let people know if I die or not. I think that'll probably happen. I think the 10-K is in December and then the the Baylor Marathon is what they call it, right? Um, [00:01:00] sometime in February. So we'll see if I do survive, if I actually train for it. I don't know. Like she said, February. So the last time I ran a marathon, I didn't train. Uh, you know, I think that was a lesson learned. Um, and, you know, I still have some, you know, injuries to show for that. Um, lack of training and just figuring I can go out and run 26 miles. Um, I think I made it up to, like, ten [00:01:30] in my training, but. Yeah. Um, so I'm doing that. I think it's funny because Mallory, who's on our team, she said, you know, I don't know if she knew what she was saying, but she said, y'all are going to chase your girls for the rest of your life. And so whenever Kendall, who's at Baylor, got into running, and then I asked her like, what her pace is, and then she immediately said, you should run it with me. And I'm like, okay, when you're college aged kid asks you to do something with them, even if it means like running a 10-K or a marathon, it's like, okay, I guess I'm going to do that. Like just [00:02:00] to spend time with you and continue to chase you down in more ways than one. So. So that's what's going on with Kinley. She's training to probably beat me at a 10-K in a half marathon.

Rachel Dillon: Yeah. And Avery is coming up on her, um, National letter of intent, like official signing day with TCU. Anything else going on with Avery other than just senior stuff like making it through senior year?

Marcus Dillon: Yeah, making it through senior year. Um, she's really [00:02:30] keeping calm and balanced. Um, the other thing that Avery did for the first time is an open water swim, um, here recently. And we've never done that. So it was kind of a new experience for the whole family. We've gone to a lot of swim meets over the last 12, 13, 14 years, however long they've been doing this, but never done an open water. So, um, yeah, it was it was fun to see her, um, do that. She obviously won first for females and got fifth [00:03:00] right. For guys to like close to placing on the podium for a for a male.

Rachel Dillon: Yes. So a couple people have asked me, did she enjoy it? Did she like doing that? And I was like, well, I don't know if she liked it, but she did like winning. So that definitely made all of our experiences of the day that much better. Had she, you know, done horribly or not placed, she might have a different outlook [00:03:30] on that, but she is looking forward to doing so. That was a two day that she swam here recently, and then in the spring she will swim A5K to qualify for some kind of open water big meet in Florida. So I don't know that she's really certain about that, being that it's like more than two times further than what she just did, but her teammates that have done that before were reassuring her that that the five K is actually much easier [00:04:00] than the two K, so however that works out. But I think she'll I think she'll do it again.

Marcus Dillon: Yeah, it'll be interesting. So that'll be fun. So I think that is an April and then in May or June. Um, so we'll have to get a long term update on that and see if she becomes an open water swimmer or just sticks to, you know, the 25 or 50 yard, um, pools that have a lot of chlorine in them. So.

Rachel Dillon: Yeah. So update we did update for Kinley, update for Avery. [00:04:30] I'll do a little update for myself. Uh, I have had the opportunity to talk to a lot of accounting firm, not just owners, but a lot of the conversations that I'm having with collective by DBA, people interested in joining the community or signing up for a forums, mastermind group, or even advisory. But the fun thing about that is a lot of them are inviting at least their leadership team, if not full teams, to have these conversations. So [00:05:00] I have been able to talk to, um, just a lot of different people that I don't normally talk to on a daily basis here recently. And one of the things that has come up, um, just in our conversations is the need for marketing to find new clients. Um, and if you are like most, finding new tax clients is not hard at all. Um, you don't have to do much. [00:05:30] Have a working website and a working phone number. That's about all you need to find new tax clients. Um, depending on what type of area you are in, we're in a pretty, uh, growing large, um, area city. And so that's pretty easy for us to find if we were looking for new tax clients. But this is Where, what type of marketing or just I need to turn on marketing to find monthly recurring kind of high value [00:06:00] clients.

Marcus Dillon: Yeah, I wish it was as easy as just turning on marketing and the high value monthly recurring cast clients just show up at your door. But I think most of us know that that's not the case. And I've talked to a lot of firm owners similar to you over the last few months. And it's not it's not like we're the only ones that aren't having like tremendous success on marketing efforts. So I think, um, times have just changed [00:06:30] a little bit. Um, you know, the services you offer, the kind of the persona you put out, um, on your social or on your website as far as, like the relationship that your ideal clients want to have with their CPA or advisor or team of advisors, um, matters a lot. And so having relationship and having multiple touch points with ideal clients goes so much further than it probably ever has, because the amount of options [00:07:00] in the market today are more than they've ever been. And that's just, you know, thanks to like a global workforce and global services that allow for, you know, people that were usually limited to a geographic area for these types of services to really work with people nationwide or worldwide.

Rachel Dillon: Yes. So with that, the kind of the sentiment of I need to turn on marketing really comes from maybe three from a couple different [00:07:30] areas or a couple different conversations. Some of those are around the fact of trying to to think of ways that they can create capacity in their firm for these new monthly recurring clients, and not really wanting to explore options because they need to be certain that they'll be able to replace that revenue. And so the thought of, I just need to turn on marketing, [00:08:00] maybe even first, before they create any type of capacity in the firm. Um, but what we found really with that is and I and I'm saying turn on marketing intentionally because it is kind of said in a broad use of the term. But what we have seen from our experience is that even when you turn on any type of marketing, it is not that the [00:08:30] floodgates open and form submissions and the phone starts ringing and that type of thing. It's not an immediate, um, kind of response to that service that you've turned on. So I think that that's one thing to remember there is that when when you start turning on different. We'll say marketing levers or turning up different marketing dials. Because there are multiple things to do. It's [00:09:00] definitely not an auto response. And you're going to get something back within, you know, minutes or days from from those efforts.

Marcus Dillon: Yeah. So hopefully what we can accomplish today is kind of giving ROI on our mistakes that we've made with marketing budgets. And Rachel and I will be the first to tell you, even though you see a lot of content and everything, maybe hear our voice on multiple different channels or platforms, we [00:09:30] still think we do an awful job at marketing and sales. So, you know, don't feel like you're alone in that. Like, we can tell horror stories about where we spent money, where we should have spent money, where we've hired people, where we shouldn't have hired people, uh, you know, and just hope that you all learn from our mistakes and give us ROI on the mistakes that we have made. So, um, I think where we can start is, you know, if you're trying to grow, which I know most people are, most people that we surround ourselves with are trying to grow their [00:10:00] business. And so you want to hang out with people that are just trying to do similar things to you. So if you're around firm owners who aren't really, you know, looking to grow, they're just good and stable and they're just counting down the days until they get released out of this prison they call their accounting firm, then you may not want to hang out with them if you don't align with that same sentiment.

Marcus Dillon: So go hang out. Go find your group of peers that also want to grow firms and grow businesses and try new things, like that's where I've seen [00:10:30] the most help along my journey too. So surround yourself with great people. Um, they'll push you further. Um, part of that is we've always wanted to grow and not necessarily decrease head count. Whenever we made a shift from like a tax practice to more of a Cass align practice and wanted to, you know, create opportunity for team members, not necessarily lose team members whenever we lose clients. And, [00:11:00] you know, part of our story is we would actually, um, create exit opportunities for clients because we were looking to change or grow in different ways and didn't want the baggage of maybe some clients that didn't want to change the way they did things or weren't really the ideal fit for the services that we we wanted to offer on the other side of that change. So as part of, you know, the different exits that we've done, which I told someone yesterday, I think we've done nine [00:11:30] paid exits of client blocks. Now, this is recorded in 2024. I don't think that we're doing another one this year. So even if you listen to this next year, I think we'll still be at nine. Um, that those dollars from, you know, the value that we receive when we exited clients, really good clients, really good people to CPAs and other accounting professionals that wanted to grow their business in a different way than DBA.

Marcus Dillon: And those clients were the fuel and [00:12:00] the right mix of clients for the services that they wanted to provide. So it was always seen as a way to help our fellow peer grow their business, obviously. Also make sure that the client or former client was fully served by a great by a great professional. What we did with those, those dollars is, um, you know, we would do different experiments, whether it was marketing, investing in current team members. But that was the fuel, you know, that we use [00:12:30] to go reshape DBA. And, you know, when we went from a $2.2 million firm in 2017 and we started to exit client blocks, Um, revenue only went down one year overall from 2017 to 2024, and it was that year of 2020 whenever we sold our largest client block, which was a $400,000 exit, which included our audit practice, which included some complex clients. But every other year we were able to gain [00:13:00] back revenue and keep the team in place, keep headcount the same, keep client service the same, and we would just use the funds from those client exits to to be the fuel for those experiments that we were doing.

Rachel Dillon: Yeah. So let's talk a little bit about how did we determine who we were going to market to. I think that that's maybe the biggest misconception is that I, I [00:13:30] think some people think I just need people to consistently send emails out to. I'm not sure if they've even thought that far. But maybe they think maybe there's the thought of I just need someone consistently sending emails out about our firm. Um. Some are. I need someone to be like a social media manager and handle all of the social media so [00:14:00] that people see us and have some awareness of who we are. I think, um, sometimes it might be. I think that's mostly where people go when they're thinking about that. Most of the time, people are not thinking about key aspects within their website as marketing. They are just thinking, I have a website, so that part's taken care of. I have it, somebody maintains it. That's good. Um, [00:14:30] but something that's missed is who the marketing is going to like. Who are you actually targeting and what services are you providing to them? And so let's let's just talk through like where we started and then what we landed on to be able to turn on different types of marketing and sales efforts over the past, [00:15:00] however many years. Yeah.

Marcus Dillon: Great point. So, you know, we've kind of already laid the groundwork of like the timing of when we hit that inflection point. So it was 2017. It wasn't the business that we wanted. Um, we had team members. We had clients on the bus. Um, so from there, you know, we hit that rock bottom. Um, we were still profitable. We still had tons of clients. Like, we would have been successful in most people's eyes, but it's just not what we wanted. So [00:15:30] on the other side of that, it was a lot easier to know what we didn't want as far as like those ideal clients. So as we started to develop a ideal client persona or avatar, um, how did we want to serve them? So it was like multiple touch points per year. We, we so we wanted to turn on advisory even though we didn't know what that was at that time. We wanted to have multiple conversations because what was frustrating is having these once a year conversations where you really [00:16:00] couldn't help somebody and you really just were doing a compliance project and, and, you know, checking the box for them. You weren't providing much value. So that was one of it. Um, we also wanted, um, selfishly, like really clean, easy industries. We wanted to stay away from certain industries, which were just more complex that we didn't feel we brought a lot of value to given, you know, my background at the time, um, you know, as kind of the main leader in the practice. So we stayed away from, like e-commerce and restaurants [00:16:30] and just a ton of moving pieces, like heavy sales tax, um, multi-stage just, you know, we we kind of narrowed the focus on who we wanted to speak to.

Marcus Dillon: Um, and instead of just having a broad voice. Right, like, broad voice being like, we'll serve any business client. We'll serve any individual, like, just look us up in the phone book, you know, type thing. Uh, remembering the days of old, uh, we started to get really specific on industries that fell within. [00:17:00] Like, hey, we can do a lot of good things with this industry. We can do a lot of good things with the owner of the business in this industry, because we wanted to go all the way from business, all the way down to individual, um, because we knew there was a lot that maybe could get missed or forgotten about by the time it actually does impact the individual family that owns that business. So how we started, you know, we had a lot of clients to choose from. At that time. Over 2400 [00:17:30] clients were in our tax program in 2016 and 2017. So it was easier for us to say, this is these are the clients that we like to serve, and these are the clients that we don't like to serve. And what we chose to do is based on the ones that we like to serve. Just started talking to them and what they needed and how would we help them better off. And we already had, thankfully, some ideal clients that we were able to kind of use as an avatar. [00:18:00]

Rachel Dillon: Yeah. So way back then on our website, we actually had listed, um, a whole lot of services. We did annual, um, individual tax, we did annual business tax, we did bookkeeping. If you needed bookkeeping, we would do it on a quarterly basis. On a monthly basis. We would do after the fact, after the fact payroll. We would do audits and compilations and reviews. So we had a wide range of what somebody might be reaching out [00:18:30] to us, um, to find out about just based on what we were showing on our website. And so what we really had to do one, we just had way too many clients. So that was step one. We figured out like, okay, this is too many clients to serve, and majority of them between January and April. What can we do? Like who? Who would be better served by someone else and would somebody be willing to pay for that? [00:19:00] But what that helped us to do is one create just a little bit of capacity for us to even think and look at the other remaining clients and see, are there industries that are more prevalent within this list of clients than not? Are there types of clients meaning, I guess maybe in values or in responsiveness and communication with us that we would rather work with than not? Um, size of business? How many [00:19:30] owners. So different things like that, that we really were able to create a little bit of time where we could breathe and look at those clients and decide, okay, this is what we would like to serve. And you mentioned that we did one really big client block, and it actually took our, um, annual revenue for that year down. But the other client blocks were not so big. So talk a little bit about how you determined how [00:20:00] many clients were the right amount to be able to focus on new initiatives for the firm?

Marcus Dillon: Yeah. So, um, part of it is in 2017, I could have looked at our client list and applied the Pareto principle of 80 over 20 rule and, you know, 20% of the profitability of the or 80% of the profitability came from 20% of the clients. And I could have made the hard decision then like that [00:20:30] other 80% of the clients that were really dragging us down through like, inefficiency or just weren't really elevating us to be where we could or even really kind to our team members. Um, I could have made hard decisions then that like, hey, like, this is the call that we needed to make. But that was that would that would have been a pretty drastic call. So I think for me and just making sure that we were able to do this evenly from 2017 [00:21:00] to even where we were at today, it was a lot easier to do that and smooth transitions and in dollar amounts that really didn't impair profitability or payroll making payroll. So because we wanted to keep the team size about what it was. So we just started to grade clients, you know, and it's not rocket science. A, B, C, d. And then we put some parameters on what an A client would be. And you know, an a client is somebody that's great to work with. And we're serving them in the way that we want to, [00:21:30] you know. So that's a very selfish way to think about it.

Marcus Dillon: A B client is somebody that is is an ideal client, but you aren't serving them in the best ways possible. So there's some opportunity with B clients. The C clients are a little bit harder because those are non-ideal, non-ideal clients. But you're serving them in ways that like you're okay with like they are opting into the services that you want to grow, but they're just not ideal. So that makes them a C and a little bit harder to have a [00:22:00] conversation with. And then D or non-ideal clients like just don't fit the persona at all, and they're not being served in the way that you want to serve the overall general market. So that's how we graded. And then the C and D are the two that really we were able to like, evaluate and say, okay, is there opportunity here to actually turn this non-ideal into an ideal. And we know that people don't change. Right. So typically those are the clients that we would look at and exit [00:22:30] a few at a time if they were just difficult to work with. We didn't include them into like a client block exit. We would just kind of refer them out, not even to anybody, just like, hey, we're not going to do your work anymore, but good luck. So so it was really the C clients. And within that C group we would, um, you know, feel like comfortable like how much of our revenue.

Marcus Dillon: So it was always looking back probably 5 to 10% is what we felt comfortable with. That $400,000 block. [00:23:00] That one was. Oh, that was a little bit, uh, un uneasy. Um, but that one was, you know, at the time, about 15, 18% of our revenue that we exited that one year. So, um, that one was a little bit more stressful. And, um, we can talk about that. Like that wasn't our best deal for a variety of other reasons, but we'll share that story another day. So I think 5 to 10% If you think about like price increases and what you're going to do anyway. Like you could regain that [00:23:30] five, 5 to 10% really easily in the very next year just by doing price increases alone on the remaining clients. You may have some additional churn, but likely you're going to add some some clients under your new model too. So I think that's where I felt safe, like, hey, I'm going to exit the clients that I'm probably going to be equivalent to on price increases alone. And then anything I add to it with really good ideal clients moving forward. Like that's the growth, that's the good stuff that we're able to [00:24:00] do. And so that that was the decision to make on how we can free up capacity to serve our, our best clients and even better prospects in ways that we wouldn't have if we hung on to those clients.

Rachel Dillon: Yeah. And I'll just add on to that, just a little bit of that 5 to 10%, which at any point in time I think we've had a block. Have we had a block as low as $50,000 in revenue? Yeah. Up to maybe like two. Close [00:24:30] to $200,000 in revenue.

Marcus Dillon: Yeah. So 250. Yeah.

Rachel Dillon: So that 50 to like 100. That was a pretty sweet area because in some cases they don't even need to get a loan or any kind of funding like the buyer can tip could potentially just pay cash for that. Um, it goes really quickly. It's not a huge amount of clients, meaning it's not going to overload their team. [00:25:00] So the client should get really good service whenever you do that. And then also in our firm, it's almost like we didn't even notice that those clients were gone. Now, if your team is way over capacity, that might not feel like enough for them. Like you might have to do that more than one time. Um, yeah. But that that those were some benefits of doing kind of that smaller block that in between there, you know, the 150 [00:25:30] to the 250. That was great. It gave a lot of capacity to our team. The amount that we were able to receive from that referral and monetizing that block did give us runway, so that we were able to continue on again without really feeling it as a negative or a weight on the business. But when we did the the largest block sale, which [00:26:00] you said came with some different implications, that one was, I will say, harder from the client perspective, because it was so many clients transitioning and the firm had capacity, but I don't know that they had the capacity for that many at one time. I don't know that they had the best execution plan in place of how they were going to, um, kind of nurture those clients in the beginning to [00:26:30] make sure that it was a smooth and successful transition.

Marcus Dillon: Yeah. And I think every you can look at the buyers or the acquirers of those clients, um, and kind of even grade them based on our experience, too. So where we've had the most success are those client block exits up to probably 150. Um, once you go over 200,000, you probably do need somebody that's going to take down a loan. It's going to be a little bit more, um, administrative on [00:27:00] the exit of those clients and just due diligence and things like that. So our best have been 150 or below and we've done majority in that range. Um, all the way down to 50, 75 kind of as a sweet spot as well. And so the other thing that we've seen is the acquirers of these clients are typically the best ones are firms that already have some team in place, and they're wanting to grow, and they're just not growing fast enough through organic channels that they [00:27:30] see this kind of as a supplement. And so they would kind of kind of have existing team to be able to take these and run with it. And then the other is whenever somebody is ready to hire that next new team member. But instead of taking that pay cut over multiple years while you grow organically, you can kind of bring in some revenue at the same point.

Marcus Dillon: Give that partially to that team member. They're also able to do other responsibilities in the team, and then you've got budget for them [00:28:00] to actually go and do services. So those have been the the best mix for us. And you know, it's not um, it's always been viewed as a way to help people grow that, you know, are looking to grow in certain ways. And the client always has the opportunity to go or find a new provider. It's never, you know, hey, you have to go use this person. So I think the other the other thing that would be evaluated are whole service lines. [00:28:30] So if you are in your firm and like we were in 2017, we were actually doing some services that we no longer do today. Um, so a test audit review comp, um, you know, and we were subject to peer review and we knew that we aren't looking to grow this. You know, it wasn't a large percentage of our practice. It was probably 2 to 3%, 4%, nowhere near 5%. So it was one of those that we weren't looking to grow it. But from an administrative standpoint, it was very [00:29:00] expensive to maintain.

Marcus Dillon: And peer review was a thing that was very stressful that you had to go through every three years, all the education you had to do for the one audit or two audits that we used to do at that time. So that was also some of the decisions we made. And then also the timing of the work came into the conversation too. So it wasn't an ideal like these weren't off season projects, right? These were thrown in the middle of other projects and deadline driven. So it's just it was exited [00:29:30] for a few different reasons. And then profitability just wasn't there either. So because we pretty much had a dedicated team member just to that line of business. Um, so those are some of the other questions you can kind of ask yourself as it relates to ideal clients, but also as you start to build out your ideal services, I would say go back to you're more likely to know what you don't want to do, given your experience and your career and your ownership or leadership up to this point. And it's easier to to kind of create that [00:30:00] negative no list a lot easier than it is. The hey, I'm going to go after, um, the yes list. Yeah.

Rachel Dillon: So all of that to say, as you know, a lot of firm owners they are serving. I mean, just the really as as simplistic as you can get, serving too many clients, serving too many different clients and providing too many different services to really build up any [00:30:30] efficiencies. And obviously, why do we want to build up efficiencies? Because one profitability, but more importantly time. Like the team, the owners, nobody wants to work overtime forever. It's sometimes it's okay every once in a while it's okay. But to just know that every single year, year after year, it's coming and it's coming for four months and then again, three more months near the end of the year. [00:31:00] That's just not something people want to do. And so talking through the marketing to the clients that you do want to serve or to those high value clients so that you can just have fewer quantity overall, but really figuring out, okay, but what do we do with all of these clients that we are serving if they're not ideal, if they're not as high value or recurring services like we'd like, then what do we do? And so that's really where that conversation was going.

Rachel Dillon: As far [00:31:30] as exiting clients, um, we have done a few different options on, um, outsourced marketing as far as for Dublin Business Advisors. We've we've done a few different experiments, but all of them have been very much the same, whether it's been hiring an outsourced team to do emails and social media, or it's been hiring an internal team to, um, kind [00:32:00] of do sales and marketing together, or even just delegating to me internally to do have, you know, prospecting conversations and sales calls. Um, the one thing that's the same is that every single one of those have to have very specific, a very specific detail of who are they supposed to be targeting, who is the ideal client? [00:32:30] What are we serving them with? What are we able to provide and some sort of idea of cost? So those are the, if nothing else at all, no matter if it's somebody who's already on your team that you're delegating to or you're looking to hire or put some kind of system or process in place, those are the three most basic questions that you have to be able to answer.

Marcus Dillon: Yeah. And so let's break that down a little bit. [00:33:00] You know, we had internal team, um, and we were adding folks because we thought we had a, um, a process problem. We had a process problem, but we thought it was just a people problem. We thought we needed the person that could really just, you know, dynamic enough to sell whatever we wanted to to our ideal client. And that doesn't exist. So whenever you say, like, hey, you need to figure out very specific, very detailed. Like [00:33:30] we set people up for failure because we pretty much, like, released a couple of folks into the market to say, hey, go promote DBA like, this is what we do. And then they would come back and like create more work, like, okay, you brought in this prospect, but they don't really know what we do and they don't really know what they need. So like these are multiple conversations to where it's at the end of the day it was just a referral out because like it still didn't make sense. So the internal team, you know that's a much larger [00:34:00] budget is what we've seen in our experience. Like if I had to do it over again, I would outsource Source. Even though outsource comes at a premium, I would outsource and evaluate for a much longer timeline and give that to an owner as a way to supplement their marketing and sales efforts. Because what we've seen is the owners or the leaders of the firm are the most capable.

Marcus Dillon: Even though we throw ourselves under the bus that we [00:34:30] don't know how to sell, that we don't know how to market, you are the business, unfortunately, you know. And so I think that's where you are actually the most ideal person on your team to be front and center. And we were just watching, you know, a 30 for 30, um, on dude perfect, which is great if you haven't seen that. Go watch that 30 for 30 on dude. Perfect. And they have a a saying I guess where it sucks to be the [00:35:00] face. And so, you know, as an owner it sucks to be the face. And you know, you're going to get drug into conversations. You're going to get all these additional responsibilities because you are the face. Be okay with that. It's your business. And I know that you and I both, um, since this is our business, we've had to become with we have have had to become okay with being the face, even though we are uncomfortable at times doing that. And I would say if you've accepted that, then supplement your efforts and some of the admin [00:35:30] stuff that you may not do well, that's where you go and get these team members and an outsourced model or fractional model to help supplement your time, because you are being pulled in many different ways as the owner and now as the face of marketing and sales.

Rachel Dillon: Yeah. So I think I'll we'll back up because we did try hiring an internal sales team. So we had a business development, um, position and then an assistant [00:36:00] for that business development position who also was amazing because did some of our office administration as well. Um, and so the best people that we could have ever imagined that came in, but what we had tried prior to that was we had tried outsourced. Um, what was called outsourced marketing at that time, and that was working with a team who would schedule social media posts, who [00:36:30] would send, um, drip email campaigns. So, you know, a 4 or 12 week, um, campaign and going out to a targeted list, which we bought a list of clients who should have been ideal, but the only way they were able to come up with that marketing and with that, um, email content and even to purchase the list, we had to get real specific. So we had to answer what industries we had to answer, what [00:37:00] revenue size we had to answer, how many owners we had to answer geographic location that we were willing to serve in order to even find a list of people to market to. And what we found, we actually had that service turned on for a year.

Rachel Dillon: I think we did that experiment for a full year, and we did have some replies. Back to the emails. I followed up with those immediately same day, if not within 24 [00:37:30] hours, um, and then would follow back up with them again. We didn't get any new clients from that. We got a few meetings, but we actually did not get, um, we didn't get any new clients from those efforts. And I believe at that time it was about $1,800 per month. Correct. Um, yeah. And so that that to us felt like a lot of investment [00:38:00] with not enough return on how that was going. So whether our target was too big, our list was not big enough. Um, whatever that might have been, we didn't see the fruit from that. What we did get was an amazing framework of how to do those drip campaigns and how to, um, kind of preschedule and create content in batches that we could just schedule out, [00:38:30] maybe for a couple of weeks at a time, or a month at a at a month at a time. And so we could continue on with those efforts. And then what did we do next? Next. We hired the team.

Marcus Dillon: Yeah, we brought it in house.

Rachel Dillon: Yeah.We had 2020 in between. And we thought, you know, potentially it's that we are not getting in front of the right people, which I think is correct. Um, the, the way [00:39:00] we were trying to go about it as far as just email communication or social media communication for our ideal clients, being doctors, dentists and vets, that's not really where they're hanging out. As far as looking for someone like an accountant or a legal service or a professional service of that nature. And so we thought, well, we need an actual person to go out in the community and to go meet these [00:39:30] people and be with these people, because our services are so relational. And what we do offer is high value and highly relational. And so an email back and forth, that's not the type of client that's signing up for the type of services that we provide. And there are clients who do sign up for that. But typically what we found is that they're not the ones looking for the investment into their business and their leadership and their team [00:40:00] like what we provide. Um, they are more looking for like the compliance in nature and just, like, quick and dirty, right? Like, how do we get this done as quickly and as, uh, uh, I guess low cost as possible, as cost effective as possible. And so we went the the team approach internal. Yeah.

Marcus Dillon: Yeah. And so that team got out of hand pretty quickly. And, you know, just the team concept, [00:40:30] it takes time to build as well. So you're not just like you're not going to turn on that marketing campaign and see all the prospects and qualified leads come in. The same can't be expected whenever you spend much higher dollars to develop your own internal team. So I would say outgrow your contract services first, something that you could easily scale to the point. And then that's when you look at does it make sense to bring in some type of administrative role first, to kind of help [00:41:00] do what maybe that external company was doing. I think the $1,800 a month was for a year was a great education because, like you said, it taught us how to do things. It taught us how to preschedule. It taught us how to, um, develop the content and the software to use, um, where we're at today is because we invested those dollars way back when, and now we have software in place that automatically sends [00:41:30] replies whenever somebody submits a request and kind of has automation built into it and can track the buyer journey, um, throughout prospect phase all the way to sales phase. So all of that built upon that previous education, um, in between, whenever we did have the internal team and relied on others to go out to market, to really be an advocate of DBA and ourselves, our team and our services.

Marcus Dillon: Anytime you have kind of a commission based system, [00:42:00] you're going to have a disconnect where that commission based sales person, they want to close deals. Some of those deals may not be the most ideal fit. So they're trying to to make a deal work. Right. And so you can't control the conversation as well as if an owner or a leader were having that conversation. So what we are seeing now that we have exited that team for about two years are the clients that are beginning to churn or have churned, were the ones that that team brought in. And [00:42:30] it's because, like they came in with such high expectations because essentially they were sold on what DBA could do with them. Not really what DBA does and what DBA holds itself out to do, because there was a commission based compensation kind of arrangement in place for that person to close deals and that whole team to close deals. So the other thing that we actually tried in kind of at the tail end of the team, because as we didn't see the right amount of prospects [00:43:00] coming in for that team member to go, then have good conversations to then close deals we actually turn on to lead gen service. Um, so you want to give a little bit of explanation about that and the experiment we did on that lead gen side.

Rachel Dillon: Yeah, the lead gen side, that was um, that is a great experiment. And, um, spoiler alert it did not work out well for us. However, again, we learned a whole lot because what we lacked [00:43:30] in sharing as far as details about our ideal client, our ideal service, what we would accept, what we wouldn't accept with kind of transitioning that to an internal team. I think that we didn't do a great job of like really sharing with those internal team what it would do to the service team if they brought in the wrong clients, or how the client would feel if they weren't getting served the way they thought. Um, we had to be [00:44:00] very, very specific with the lead gen. So lead gen would do cold calling on our behalf as if they were a team member of Dillon Business Advisors calling, even though they were not our team member. They had an email alias address set up as us, and they called on behalf of Dillon Business Advisors. So they would say they worked. Um, emails went out as if they were coming from you, Marcus, and [00:44:30] some from me. And so then they also had to know the voice. And so we had to review what those emails would look like, what the follow up emails would say to make sure that they were going to match. So when they actually had a scheduled meeting with myself that it wouldn't be contradictory of what they had been receiving. And so they did the cold calling and would set a scheduled meeting. So they had a meeting link to use that [00:45:00] was, um, that was specific to them. So we could kind of track what meetings were coming in from the lead gen team. And then I would get on those calls and I'll tell you as specific as we were, and the list was very specific, it was, um, I believe our list. I can't remember if it was geographic this time. Our first list was geographic, like within a 50 or 100 mile radius. This time. [00:45:30]

Marcus Dillon: I believe it was Texas based. Yeah. It was.

Rachel Dillon: It was around the cities. Correct. It was around the major cities of like Austin, Houston, Dallas. And so a lot of the emails and conversations went out as like, hey, I'm right near you, or I pass your office like it was. It was very relational. How these went out. So it piqued a lot of interest of people knowing that they were capitalizing on the relationship of that. But [00:46:00] most when they were calling, they still were looking for something different than what we did, or they were just very interested in that sales, like in that marketing and sales process and just wanted to know more about, like, the lead gen service that we use. And so, um, those didn't quite fit either. So we did have scheduled meetings. We did that experiment for six months. We did get some scheduled meetings, but out of all of the scheduled meetings that we did, only [00:46:30] 1 or 2 were actually ideal clients, and neither one of them ended up signing. And I think a little bit of that was maybe some messaging that went out, um, maybe specific to like revenue growth promise may have been in that and so or that's what the prospect that's what they understood from the messaging that they got. And so then when they were on the phone with me and I let them know what we do and how [00:47:00] we work, that didn't really align with what kind of got their attention and why they scheduled the meeting.

Marcus Dillon: Yeah. So the other thing is we learned what what those, um, you know, appointment people were, were leading with was advisory. And it's, it's okay to lead with something. But in our mind, advisory happens after relationship. After all the hard work of the accounting and the compliance is done. Um, we [00:47:30] had to you're whenever you're getting on those calls, you kind of had to back them all the way up to explain, like how we can get to advisory and how we can get to growth strategy is through all the other compliance and bedrock services that we need to perform. So I think that was a little stressful on your side, I'm sure, whenever you were having those conversations. But but that alone also kind of shows like, hey, you were the best person like to [00:48:00] have those conversations, protect our team from overcommitting to something that we really don't do. And we're still, um, you know, we count that, you know, those dollars spent for those six months, um, it wasn't a small fee and there was onboarding, right? So, I mean, it was it was quite an investment. We count that as an education. So I think now where we're at, um, well, let's back up like all these different strategies. So even like [00:48:30] let's say the internal team and the budget of payroll that we had for that 18 months, two years, that was about $500,000 that we spent on essentially three team members over a couple of years.

Marcus Dillon: And when we look back for for it to be successful for that amount of budget, about 250 per year plus or minus, to be successful, we would have had to onboard and, and kind of assimilate [00:49:00] clients in the 500,000 plus range per year. And so then you start breaking down like your average price point is $2,000 a month at that time. Like that is a bunch of clients that were getting onboarded. And when we look at a service perspective, we were not set up from a service perspective to even allow for that type of growth. So we had some disconnect there. And I think exiting that experiment with the internal team [00:49:30] allowed us to refocus and say, okay, what what is really our growth goal around DBA and where we're at today. And so for like 2024, we've added through October 15th, 1518 clients, right? So the average price point for those clients is probably around $22,300. If I had to guess. But, um, you know, we set out a goal of 18 new clients this year and actually met it in ten and a half months.

Marcus Dillon: And that's not [00:50:00] through these hard, you know, sales approaches or anything like that. It's just working the relationships that we already have, both internally with existing clients and then our referral relationships. So we feel really good about that growth path. And I would say like whenever you evaluate, okay, we spent upwards of 500,000 because that doesn't include all the costs that go along with having a couple of team members in the software that they had and the seats and all that fun stuff. Um, compare that back to just going out and [00:50:30] buying a firm, you know, buying a firm that has proved to be successful for us in the past. The different times we've done that, and being able to take that client list that comes with that acquisition and then filter through the clients that may be able to ultimately end up with an advisory relationship. So I think those are the ways to view it. I think you have to get really specific, not only on who your ideal client is, but what the goals are for your firm, because that should also drive some of the conversation [00:51:00] into like what success looks like and then what budget should be for that team or that service.

Rachel Dillon: Yeah.

Rachel Dillon: So I think for Dillon Business Advisors, and this is not true for every accounting firm, but for Dillon Business Advisors, our best and best success most recently has come from serving our current clients really well and creating relationships with referral partners that know how well, [00:51:30] that also know those clients and know how satisfied those clients are. And so a lot of our growth this year has been current clients who have been able to start or acquire additional businesses to bring in more business, their own monthly recurring client for each of those new businesses, or from people close to the firm who have been able to refer people in. That's not always the case with [00:52:00] everyone, but with our the relational aspect and the value that's provided. But I think really the conversation here, when I hear someone say, I need to turn on marketing immediately, red flags go up and I'm like, caution, you can spend a whole lot of money turning on marketing with not a lot of results if you're not careful. So you just need to know, like exactly what you're trying to achieve and exactly [00:52:30] who you're trying to serve before you enter into that relationship. Because it's easy to hear. A lot of times we just want to put money into something and hope the problem goes away. Like, I'm going to put money into this so someone else can deal with it. But initially for the setup to get that marketing started, it is going to require, um, some thought from ownership and leadership as to what are the details that are going [00:53:00] to be used to get that marketing effort going?

Marcus Dillon: Yeah.

Marcus Dillon: And I would say get creative in your marketing budget. So part of the marketing budget, it doesn't always have to be for like online services and building out these different templates and things like that. And then the people to allow you to kind of have this social media presence, if you will, some of the best marketing dollars may be spent, you know, taking your existing clients to lunch, you know, if that's if that's where you're getting some really good leads from your existing clients, take them to, you know, ball [00:53:30] games or whatever you enjoy doing rounds of golf and give them the invitation to invite somebody that that they would like, because that's more or less how you're going to make these connections. And they would probably invite people that they're close to that either own a very similar business or hang out in the same circles. And so you're just going deeper with the connections you've already made. So I think that's something that we typically always write off and think that, hey, there's all these clients on the other side of the screen that are going to fit so much better than our existing clients. [00:54:00] And even I have to remind myself sometimes like, hey, the best, the best place to spend time is with the people who are already spending money with your your business, whether it's from a loyalty and customer service standpoint, maybe that's all it is, or there's actually opportunities within that client family or a relationship connected to that client family. So, um, and yeah, it sucks to be the face that that kind of has to be you. A lot of times [00:54:30] that does that. But that's what you signed up for whenever you became a firm owner.

Rachel Dillon: This has been a great conversation. Thanks for sharing about what we've tried, what hasn't worked so well for us, what has worked well and we are always open to new ideas and love being creative and doing experiments. So I know what we do now won't be what we do forever. So always looking to [00:55:00] hear feedback from listeners as well on what they've tried and what has worked well for them. Yeah.

Marcus Dillon: All right. Well, thanks for leading the conversation.

Rachel Dillon: All right. See you on the next episode.

Rachel Dillon: Thanks for listening to this episode. If you enjoyed the conversation and want to learn more, be sure to visit collective Wcpa. You can schedule a meeting directly with me, Rachel, by clicking on the Contact Us page. Be sure to subscribe, like, and share so you don't miss any future episodes. We look forward [00:55:30] to connecting with you soon!