The Domino Strategy: How to Identify the First Step to Achieving Your Firm’s Long-Term Goals

June 18, 2018 Bob Wang

Domino Strategy Accounting

As the owner of a small business bookkeeping services firm, I’m always thinking about growth, whether that’s expanding my company’s geographic reach or increasing our sales. Goals such as these are impacted by a set of characteristics unique to service industry businesses – characteristics that affect everything from how we should be marketing our business to what types of services we should be offering and how we should be developing our competitive strategy.

Now, I tend to think of business goals as a line of dominoes. The last domino is the end goal, and all the dominoes before that are the tasks and smaller goals that must be completed or achieved before that final domino can fall.

One domino can, in fact, knock over another 1.5 times its size, so all you’ve got to do is figure out what the first small task is that will set everything else in motion. Knocking that one down will help you build enough momentum to knock over the last domino, your long-term goal, at the end of the line.

Great. But how do you do that?

Identify your dominoes by understanding service business characteristics

This is where those unique characteristics of service industry businesses come in. If your goal as a small business owner or entrepreneur is to grow your service-based business, then considering these characteristics in the context of the domino strategy can be a helpful way to identify where you need to start.

Let’s take a look at my company, Legacy Advantage, as a case study. Our current goal is to double our sales. That’s the last domino.

The first domino is the improvement of our onboarding process, during which we clean-up and catch up a client’s bookkeeping and get them set up on new systems and apps.

How did we determine that this should be our starting point? Let’s take a look at each service industry property, its implications with respect to our goal, and how onboarding fits into the picture.

1. Intangibility

Services are not a physical product. They can’t be consumed or experienced until the moment when the service is purchased and provided. This means that the client can never be 100% certain of what they are purchasing. Our clients can research our company’s history and ask for referrals, but they won’t really be able to ascertain the strength of our bookkeeping services and whether or not we’re a good fit for them until we actually do their bookkeeping.

Implication: Client satisfaction and retention are paramount, as these encourage the solid word-of-mouth recommendations and referrals needed to expand our client base (more clients, more sales). We need to ensure a quality experience for new clients so that their expectations are met, and preferably exceeded.

Why onboarding? After all of the marketing and pitching is said and done, the onboarding process is our first moment of real interaction with new clients. The moment we show them what we’re about and what we can do for them. It’s a time-intensive and stressful process. More importantly, the true value of the new systems and processes we’re putting in place can only be seen once they’re implemented and in action.

This means we really need to connect with clients during this experience, show them what we’re doing, and educate them about the benefits. The more impressed they are with this process, the more likely they are to stay with us and recommend our services to others.

2. Inseparability

Services are sold first, then provided and consumed, usually at the same location (whether that be a physical location, such as a restaurant, or an online location, such as a specific website). Some services (e.g., hotels, restaurants) require that the customer be present when services are produced and consumed. Others, like our bookkeeping services, require some communication with the client, but do not require them to be present while the service (bookkeeping) is performed.

Implication: We do all of our bookkeeping through QuickBooks Online and use certain digital apps to automate processes such as receipt tracking. Our clients must be able to access these systems (our “location”) and use them properly in order to interact with us.

Why onboarding? The onboarding process is when we set our clients up on QuickBooks Online and other apps in our tech stack and train them in the use of these – how to load their information, how to view their financial data, etc. If the set-up and training services we provide are less than fantastic, so too will be the results of using that system.

They need to be able to access, understand and interact with our system easily. But learning new processes and technologies can also be very stressful. We need to be attentive to our clients’ needs and ensure they understand our value during the onboarding process.

3. Variability

The quality and consistency of services are entirely dependent on the person or vendor providing that service, and services can vary greatly in quality because of this. Obviously, variation exists between individual bookkeepers and bookkeeping firms. Many of our clients come to us because they are dissatisfied with their current bookkeeping arrangement – i.e., there’s a problem with their books and they need it fixed.

Implication: We have to stand out amongst our competitors by providing a top-quality customer service experience. Our files must be immaculate, accurate, and timely, and we must ensure quality and consistency, particularly as our operations expand.

Why onboarding? As mentioned above, the onboarding process is our first real point of connection and interaction with our clients. If we can consistently offer high-quality onboarding services that leave the client feeling empowered, informed, and excited about working with us, we can stand out against our competitors.

In addition, our ability to provide accurate and timely financial data depends on our ability to access our clients’ business financial records. We automate this as much as possible, but some inputs are required, and the more painless we make this process, the better service experience we can provide.

4. Perishability

Services can’t be stored up and used later. If no one is engaging those services today, the opportunity to provide and profit from those services is lost. This is particularly relevant for service industries when it comes to growth – if your services aren’t being used, you’re not only losing profit, but also burning through your resources. In addition, the efficiency of the services you provide directly impacts your service capacity.

Implication: Doubling our sales means increasing our client base. To do so, we must increase our capacity while maintaining the quality of service for both new and existing clients. We can’t afford to lose existing clients, nor turn new ones away.

Why onboarding? Onboarding is an incredibly time-intensive activity and a major drain on our resources – a bottleneck. And if we’re only able to onboard, say, one client a day, and we’re already operating at that limit, there’s no way we can increase sales. Creating a more efficient onboarding system therefore increases our capacity to take on new clients.

Improving our clients’ understanding and use of the systems we set up also improves the efficiency of our future interactions with those clients. If we don’t need to constantly explain the system to our clients or tidy up mistakes, we can devote more time to onboarding new clients or to providing our existing clients with additional value-added services (e.g., financial reports, business insights, etc.).

5. Lack of ownership

Because services are not physical, tangible products, the customer purchasing the service does not own it. Instead, they are paying for access to the service for a period of time. We provide bookkeeping services for as long as our clients continue to engage our services, which could be on a weekly, monthly, or project basis depending on their needs.

Implication: The quality of our work and the services we provide must be of high value to our clients. They must see the value in retaining our services over the long run. We must do something for them that they are not able to do for themselves.

Why onboarding? The more time we invest in educating our clients during the onboarding process and learning about their business, the more they’ll see us as a partner and our service as an indispensable source of financial insight into their business. And while they may not own the bookkeeping service itself, their ability to access real-time financial information can give them a greater sense of ownership and participation in the bookkeeping process.

Knocking down the last domino

In summary, by considering the unique characteristics of the service industry, it’s easy to see how these relate to retaining and attracting new clients – the bedrock of growing sales (our last domino). Moreover, it’s also fairly clear that our onboarding process crosses each and every one of these areas, meaning that improving our onboarding efficiency is a high-impact project akin to knocking over that first domino.

Consider your main goal (or goals) and list out all of the tasks required to get you there. Then consider that goal in the context of the service industry characteristics above and look for the task that has the greatest crossover. That’s likely your first domino! Start your line from there, knock that first domino down, and keep the momentum going until you reach your end goal. 

Improving your onboarding process can help you build stronger client relationships. Download our free Bookkeeping Client Onboarding Checklist to learn more!

About the Author

Bob Wang

Bob is owner and founder of <a href="">Legacy Advantage</a>. He obtained his CPA through working at the Private Client Services division at a Big Four accounting firm. Bob is passionate about empowering organizations through quality bookkeeping services.

Follow on Twitter More Content by Bob Wang
Previous Article
The Accounting Community Rocks! Here’s Why You Should Get Involved
The Accounting Community Rocks! Here’s Why You Should Get Involved

Connecting with the accounting community can add a ton of value to your practice. Read our blog post three ...

Next Article
5 Ways to Help Your Firm Hire Remotely
5 Ways to Help Your Firm Hire Remotely

Onboarding and integrating remote employees can be challenging! Here are 5 tips for hiring remote employees...