If You Ask, They Will Buy: Selling Additional Services to Existing Tax Clients

By Cari Weston, CPA, CGMA, MST

Editors: Steven F. Holub, CPA, MBA, and T. Charles Parr III, CPA, CGMA

This column challenges traditional thinking and steps into unknown territory, but it also provides mental preparation for this journey and gives practical steps necessary to start today. The topic is selling services to clients. The difference is that the selling is not to new clients but to existing ones. Cross-selling , as it is commonly called, is simply selling new or complementary services to a firm's existing clients.

The Realities of Selling

The bottom line is that regardless of firm size, services must be sold. Without clients willing and able to buy these services, the business would cease to exist. Traditionally, however, CPAs do not share the same attributes of those most often associated with advertising or marketing positions. Tax professionals are more naturally inclined toward technical roles, which do not require the same set of skills.

While some firms have a department specifically responsible for marketing the firm, most of those marketing plans are directed outward and target new clients while frequently ignoring existing clients. Most firms, whether large or small, are looking for future partners who can not only get the work done but also develop business. Those who venture out on their own need clients, and more specifically, fees, to pay the rent and feed their family. Furthermore, it is usually best that selling be done by the professionals themselves, for a variety of reasons that this column discusses.

Accountants do not enter the profession expecting selling to ever be part of the job. Selling is left to the guys on the car lots and in software megastores. So what happens when a highly competent and technically adept tax professional starts trying to move up the ladder in a public accounting practice? The role begins to shift from primarily being about productivity, chargeable hours, and realization on jobs to being about managing a base of clients and revenue. It also becomes about increasing that client base and adding value to the financial health of the overall firm. Those who excel in this area have little trouble climbing the ranks; those who do not often find themselves unable to advance beyond their present level.

The CPA who hangs out his or her own shingle and starts offering services as a sole proprietor probably has an entrepreneurial aptitude, right? Chances are good that this could not be further from the truth. A middle manager often makes this move after finding himself or herself stuck in an existing firm and deciding to break free to have a sense of ownership and seniority that his or her current employer is not offering. Other common reasons that CPAs cite when starting a practice are to gain control over the process, to "do it better," to stop earning money for other people when they can put that money into their own pocket, or to establish greater work/life balance. Despite best intentions, being good at preparing tax returns does not by itself qualify someone to run a business, any more than being a good cook qualifies someone to run a restaurant. If that person spent most of his or her career crunching numbers and never cultivated the soft skills necessary to develop new business, there may be few tax returns to prepare.

How Do Tax Professionals Feel About Selling?

Selling is still a dreaded word in this business. CPAs are generally averse to the idea, for various reasons. Approaching people to sell them anything can be intimidating. The underlying reason is often simple fear—of initiating the conversation, of making clients feel as if they are being "sold on something," or of being too pushy. With cross-selling, this is compounded by the fear that a currently happy client may become resentful or suspicious or even leave the firm altogether. This fear is exacerbated when the service being sold is to be provided by someone else.

Some of this underlying fear may be based on a lack of self-worth. CPAs are notorious for undermining the value of their services by using minimizing phrases such as "no problem" and "that's easy." While the work done for clients may be easy for a well-educated, licensed, seasoned professional who constantly updates his or her technical knowledge, it is by no means easy for the general public. If it were, nobody would ever need a CPA. Imagine a brain surgeon who can step into surgery and save a life based on his or her knowledge and skill alone. Would anyone dare to think that because the surgeon performed the surgery with ease, it was "easy"?

And whether intentionally, or as a result of the underlying fear or lack of confidence, some tax professionals will not ask for the work, believing that clients will ask for the services they need. One flaw in this line of thinking is assuming that clients automatically are aware of all of the services the firm offers or recognize their own needs and how the CPA can help address those needs.

Why Sell to Existing Clients?

First and foremost, it is easier to sell to existing clients. To a certain extent they are presold as they already have an investment in their relationship with their CPA. Who knows them better than their CPA? Imagine all the personal documents that must be reviewed to prepare a tax return. They provide insight into not only tax matters but family, investment, and business matters as well. The condition of the records alone may provide an opportunity to add value for the client by offering bookkeeping or organizational services.

Secondly, a level of trust has already been established with the client. One of the biggest barriers to selling any type of personal service, especially those involving finances, is developing a solid level of trust. This is also why obtaining a new client through a referral is much more valuable than by a cold approach. Existing clients transfer some level of their trust via the referral, so that the CPA does not have to start at ground level.

A client's experience with his or her CPA is a good basis for a relationship, but even better is when the CPA knows the client. Increasingly, tax professionals are learning the value of vetting potential new clients and ensuring a solid onboarding process before accepting them. This should be an exhaustive process to ensure that only the clients with a good fit make it onto a firm's roster. However, despite the best of methods, occasionally a bad client slips in the door. These troublesome clients may not show their true colors until well after the firm has begun providing services. While the best solution would be for these clients to be retrained or fired (see the AICPA Tax Section Client Termination Checklist and Sample Client Termination Letter  (Tax Section membership required)), the reality is that sometimes they stay on longer than is ideal. When determining which clients should be offered additional services, the CPA can look to previous behaviors, including treatment of staff, condition of records, level of participation, and payment history to determine if this is a client he or she would serve again.

The No. 1 reason to sell additional services to existing clients is that clients want them. Too frequently clients seek new providers because they complain that their CPA is not proactive enough. Clients say that they want someone who comes to them with updates, ideas, and recommendations throughout the year, rather than just preparing their tax return once a year. Clients assume that in addition to preparing tax returns, a CPA will identify opportunities and help them reach their goals. Cross-selling may generate revenue for the firm, but it is really about adding value for the client.

How to Sell to Existing Clients

The most important first step in cross-selling services to clients is to build and maintain good relationships. Clients will want to buy additional services from people who have established a track record as well as gained their trust. This is not to say that everything has been perfect every step of the way, but it should mean that any mistakes or missteps have been handled to the client's satisfaction and that needed corrections have been made. Often, a deeper relationship is created when a problem has been handled well, rather than if everything has always been smooth sailing.

Clients can buy additional services only if they know what services are available. A CPA should not assume that clients are aware of everything a firm offers. It is important to make sure clients are aware of all of the services available and how they might benefit from those services.

This can be done in several ways, including regular newsletters, postcards, emails, brochures, or fliers in the waiting area or on desktops, as well as seminars and receptions. However, nothing beats a face-to-face conversation with a client where the service is related to a personal situation. The conversation does not have to happen in the office to be effective. A lot of information can be shared over a cup of coffee or at lunch. In a more relaxed setting the client is less likely to feel as though he or she is being pressured. If a direct approach is not appropriate at the time, one technique that is often effective is to share success stories from other clients. Obviously, names and specific details should never be shared, but there is nothing wrong with relating the general facts and how the additional services benefited the other client.

An often overlooked component of cross-selling is that developing successful relationships should take place at the firmwide level, not just at the partner or owner level. Many successful "rainmakers," or CPAs who excel in developing new business, do so individually and covet the relationships they establish, which is a mistake in promoting cross-selling. The mentality of "you eat what you kill" too often predominates in the business world, which means that each individual in the firm is paid according to the revenue he or she generates. In a world of limited resources, each client cannot consume all services; therefore, an internal competition for clients' attention is created.

For a firm truly to be effective at cross-selling, it must have a culture of creating value for clients at all staff levels. While teamwork may be important in meeting a client's need for service, it is even more critical in selling and particularly cross-selling professional services.

How to Prepare Staff for Cross-Selling

Firms must recognize the importance of every interaction with a client as well as internally among staff when it comes to creating a culture of cross-selling. Every person, from the receptionist who answers the phones and greets the clients before visits, to the person whose name is on the door, plays an important role.

To fully utilize all staff, the firm must begin from day one to emphasize client service, knowledge sharing, and providing value at all times to its clients. This should include wording with proper emphasis in the employee handbook and new-hire training, and it should be constantly reiterated and reinforced. Staff must be taught the firm's mission and purpose and be trained on all the services the firm provides. While they do not need to be experts in every one of these services, they should have a basic understanding of each service and whom it might benefit.

This can be done in a number of ways, including encouraging staff to read firm materials relating to the services. Perhaps a more effective method would be to hold one-on-one training sessions for new hires and regular group training sessions to discuss or refresh their knowledge of new services offered. This can be done by "experts" in each service area recording a video or audio file that can be stored in a cross-selling library. It can also be done through live instruction at a monthly "lunch and learn" that could cover a new topic each month.

Once all staff have an understanding of the services, their individual roles need to be defined. Regardless of position, everyone's role is to have positive interactions with clients whenever possible, to interact and pay attention to what the client shares, and to in turn share that information with the rest of the team. This could involve having the receptionist greet all clients who enter the office and ask how they plan to spend their summer or holiday. The staff person who is scanning client tax documents or preparing the tax workpapers can note any new or unusual items. The tax return reviewer can identify significant income or expense changes compared with the prior year or fluctuations in investment accounts. The contacts do not have to be limited to office interactions, as conversations held in the line at the grocery store or at a child's soccer game can also lead to valuable information that may point to opportunities to provide value to a client.

This information is useless if it is not shared, so the firm must create an avenue for sharing what is learned. The firm can use customer/client relationship management software to record and review interactions. The firm could also hold regular client value meetings where a group of clients (or all clients, in the case of small firm) can be discussed and every staff member who has contact with or new knowledge about the clients can update the group. The group can determine who may benefit from additional services and devise a plan for reaching out to these clients. This has the added benefit of identifying good clients who may not be receiving regular, positive interactions with anyone from the firm and to create a plan for making contact.

In addition to creating and encouraging collaboration, the firm can establish a reward system that supports this culture. It is important to avoid structuring it in a way that provides incentives for staff to sell unnecessary services to clients; rather, the goal is to add value to the client experience. Perhaps everyone who has a hand in identifying the new service and helping to deliver it to the client can share in a percentage of the fees. A reward system could also be based on the client's perceived value of the additional services. The rewards can be monetary, or they can include trips, spa services, or tickets to ballgames or concerts. For firms with smaller budgets, it may be additional time off. The key is to find something that works well with the team.

How to Get Started

Resist the urge to devise a perfect plan before beginning. It is usually best to have a plan up and operating that recognizes most or many of the clients' needs for services and how the firm is able to address them, rather than waiting for the perfect plan to begin. Once the plan is in effect, small changes over time can make a big difference in the success of the plan. A number of great resources are available to help develop a more formalized plan; the key is to get started.

Run an internet search on "cross-selling tax services" for ideas. For those inspired to begin right now, here is a quick-start list:

  1. Prepare a list of services the firm offers.
  2. Identify which services are complementary to each other.
  3. Create internal bundles of complementary services.
  4. Mine existing client data to categorize services by client type.
  5. Identify gaps in services offered based on bundles.
  6. Brainstorm benefits to each client of adding services.
  7. Schedule a meeting to discuss services with clients.
  8. Close the sale.

The concept of cross-selling is instrumental in developing a successful practice. It helps to bridge the gap between the need for selling new services and providing good service to current clients. Firms of all sizes can suffer from a revolving door where they focus very hard on getting new clients in the door but then are unable to keep them as the service levels drop once the relationship is established. Firms that keep their eye on the needs of existing clients at all times, not just for the purpose of selling new services, will find that they have happier, more devoted clients. This type of client is more inclined to stay with the firm through the good times and bad and is more likely to send friends, family, and business associates to the firm as well.

Fear not, accountants, the first step has been taken just by having these clients in your office; the next step is to determine what additional needs you can help address and sharing them with those existing clients. The next time you consider attending a three-hour networking event that might result in a single tax return engagement, consider how your time might be better spent by taking an existing client to dinner and telling that client all about your new line of business.

If you need a little encouragement, listen to the archived Tax Power Hour session on "Missed Opportunities: Selling Additional Services to Clients" for a discussion on the steps and practical tips. (Find archived Tax Power Hour events at www.aicpa.org .)


Steven Holub is a national director in the Professional Practice Department of Cherry Bekaert LLP in Tampa, Fla., and is a former chairman of the AICPA Tax Division Tax Practice Management Committee. Charles Parr is the managing shareholder of Parr & Associates in San Antonio. Cari Weston is a senior technical manager–taxation with the AICPA in Washington. Mr. Parr is chairman of the AICPA Tax Practice Management Committee. For more information about this column, contact Ms. Weston at cweston@aicpa.org.

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