If you’re an entrepreneur, chances are you’ve heard the name Mike Michalowicz.
Mike Michalowicz is the entrepreneur behind three multimillion dollar companies and the author of Profit First, The Pumpkin Plan and what BusinessWeek deemed the entrepreneur’s cult classic, The Toilet Paper Entrepreneur.
Mike is a former small business columnist for The Wall Street Journal and the former business makeover specialist on MSNBC. Today Mike travels the world as an entrepreneurial advocate speaking to groups of entrepreneurs and business professionals. He is globally recognized as the guy who “challenges out-dated business beliefs” and teaches us what to do about it.
I was very excited when a mutual friend introduced me to Mike Michalowicz. Amid his dizzyingly array of projects, Mike also co-hosts a podcast with his Profit First Professionals co-founder, Ron Saharyan. Their podcast, “Grow Your Accounting Practice” caught my eye (or ear…) and I knew I had to interview Mike.
There are some powerful lessons in this interview for the CPA, accountant, or bookkeeper who wants to grow his or her practice. Let’s get to it!
Mary Rose Maguire: I’m very excited to interview you, Mike Michalowicz because you are very accomplished! You’ve got so much going on, books and speaking, and your podcast and everything. But I’m going to jump right in to focus on some marketing concepts and ideas for CPAs, accountants, and bookkeepers.
So, my first question: Do you think it’s important for CPAs and accountants, and bookkeepers to focus on a niche market? Why or why not?
Mike Michalowicz: Yeah. So, I am a major advocate for niche specialization. In fact, when someone joins our organization for CPAs and bookkeepers, one of the things we insist is pursuing a niche. And the reason is because it’s far easier to become what we call an industry authority than a general authority.
An industry authority is someone who’s recognized with specific expertise that caters to a market in a specific way. And when someone has those skills of accounting, bookkeeping, tax returns, and all those different skills – they can apply them to a specific community; they can further enhance their service set by addressing the specific needs of that community.
As an analogy, when a new member comes on we talk about the difference between a general practitioner doctor and a heart surgeon. And, when a patient’s life is on the line, I want a heart surgeon to do my heart surgery, not the general practitioner. Because I want someone that has the experience and the knowledge. I’ll go to the general practitioner if I have a rash or a cough or something, but the second it becomes life threatening, I’ll go to a specialist.
And, this is true in the business world, too. Yes, the vast majority of clients just have skin rashes, but they also value that practitioner at the same level that this is a surface level solution and won’t pay a premium for it, and won’t even take the recommendations necessarily that seriously until the business life is on the line. And if I see a challenge as mission critical to my business, the customer I will seek out the specialist and pay a significant premium to them.
So, when you’re in a niche, you dictate a premium, you’re easily recognized because you’re circling amongst the same community and you build specialized skills because you’ve mastered what that community needs.
MRM: I like that. It’s sort of the same way with copywriting. I chose a new niche but had another because it’s in my background ‒ information security. But you’re right. When companies look for service providers, they would much rather have someone who understands their business and what’s going on rather than just a generalist.
Next question: Would you recommend a CPA practice accountant or bookkeeper to dive into public speaking? How could it help them? You could even touch upon doing webinars. How could a CPA practice accountant or bookkeeper pull that into their mix?
MM: Yeah. So, I would think long and hard about it first. I think it’s an amazing outlet and a way to market yourself and position yourself as a professional. However, I have gone to events where the person is really a bad speaker, not effective and it actually dissuades people from doing business with them. Because they were incoherent, they were not engaging and I’ve seen people say, “Well, now that I’ve seen this person in public, no way do I want to do business with them.”
But your public speaking skills aren’t representative of your business skills. So, in some, not all, but in some circumstances, I’ve seen someone who’s a great business person hurt their business by being a poor public speaker.
Now, conversely, if you do a good job on the stage, I think it’s a significant advantage – and you don’t have to be the world’s greatest public speaker. But by going up on stage and sharing your knowledge, you immediately, again, distinguish yourself. You’re in front of a group in an authoritative position; you’re on stage with people listening to you for 30 minutes, an hour, an hour and 20 minutes. And, the competition is rarely going up to speak, so you stand out because you are a speaker.
Secondly, people seem to put more credibility in someone that stands on stage as a public speaker than learning about someone through word of mouth or even watching a video over the internet. It transcends the perception of authority. There’s more authority when you’re on stage because those attendees see that you were vetted out. You had to be selected to be a speaker, so there’s got to be some significance you have.
And you want to be in an authoritative position. Meaning, you’re the speaker, people see you as an authority on a subject. Even if it’s the same stuff you tell your clients one-to-one, face-to-face, because you’re doing it on stage, it’s like a doctor suggesting medicine. You’re just seen as a greater authority and people are likely to take your direction much more like they take your direction because they see you as an authority.
So, I’m a huge fan of speaking if it plays into your talents and if you’re willing to develop it. Because like anything else, public speaking is a skill that you may have some innate talent to do but you need to develop it. If it speaks to you, then, yeah, I would strongly suggest being a public speaker.
MRM: Sure. And maybe go visit a local chapter of Toastmasters if you don’t feel confident.
MM: Oh, yeah. Totally right. So, I did the Dale Carnegie Public Speaking Course. I think if this is something that we are going to devote time to and it is by the way—the other challenge is it’s time-consuming. I mean, an hour speech is a nine-hour event. You’ve got to get to the event, network, it could be a half day if you have to travel, it could be a day’s work if it’s travel business.
Obviously, you can gain the skill. If you feel a desire to do it, definitely join Toastmasters. It is extraordinary.
MRM: You’re right about the time that’s involved, which is why I would like to do more webinars.
Webinars at least offer you the ability to share the information whatever you have but you can share it with wider audience and they can consume the information without necessarily having to drive somewhere.
But like you said, I think the part about the authority, I believe totally in what you just said about when you’re standing up in front of people, it’s a different dynamic.
MM: And I am a fan of webinars. I do them most of the time. But I see them as supplemental because I think that the perception is a webinar, you could do it out of your kitchen and you don’t have to be vetted. And there are some amazing webinars out there but I think that’s a general perception. But when you are a speaker on the stage, there’s that vetting process that I think gives you just a little more credibility.
MRM: Right. I agree. What are the top three to five mistakes CPAs, accountants, and bookkeepers make with their marketing? I’m sure that’s a big question.
MM: Yeah, it’s a big one. The first mistake I see is there is no differentiation from the competition. Now, we’re an extraordinary accounting firm, we’re a great bookkeeping firm but that’s what everyone is saying and therefore the customer sees us as not distinct and it forms downward price pressure.
If a client or prospect sees a traditional accounting website, they’re going to say, “Oh, you’re just another accountant. Are you cheaper?” So that’s a downward price pressure because, from their perspective, an accountant is just an accountant.
So that’s a big mistake. What makes you different? This points back to the niche specialization. If you specialize in an industry or a niche of some type and say, “I do accounting specifically for Amazon sellers and I know how to use the proprietary software that Amazon uses, and direct you on ways to improve your inventory turn, therefore, improving cash flow,” that is very powerful. So, what makes you distinct from everybody else? That’s got to be in there.
The second thing I see is personality. Many marketing messages are void of personality and people buy that. People buy your personality and I’m not saying you have to necessarily be the class clown, the “waka-waka” guy that’s joking around. You can be the ultra-studious accountant that crosses every “t” and dots every “i.” If that’s your personality, put it out there. Position yourself that way. So, show your personality.
Another thing is I don’t think they show is this human side, too. This is a person-to-person relationship, not a business-to-business. We say, “In our business, we’ll help your business do this.” But share a little of your story. There’s a thing called the Phoenix Effect that I see missing in so many marketing opportunities that accountants and bookkeepers have.
The Phoenix Effect is where we share our grand vision, but we also share the struggles of our business and our personal story. We humble ourselves. So, when I became an accountant, I always wanted to help people really maximize the returns because I believe people should have the freedom of using their own money and not giving to the government, whatever the vision is.
But when I started out, it wasn’t like people flooded our doors. We had to hustle. We had to work with some clients and honestly, we weren’t a fit for them. Over time, we learned that there were very specific needs, there were customers’ needs addressed and we’d improved our services to get better and better at it, and then, come back out. This is The Phoenix Effect. “Today, we’re stronger than we’ve ever been. We are ready in position to serve you because of our years of experience. Won’t you consider us as your accountant?”
So, most of us, we just do that last part, saying, “We’re extraordinary. We’re great. Won’t you use us?” But there’s no humbling story. And it actually repels some people because it’s like on Facebook. The person has a perfect life all the time and we’re like, “Geez, what’s this person saying?” Life isn’t that perfect.
So, we, in our business, need to humble ourselves, too.
I see inconsistent marketing and this is a great mistake accountants and bookkeepers make. I see them marketing sporadically. “Oh, I should try the Chamber of Commerce this week. Oh, I should run the ad on the diner placemat next week. Oh, I should run Facebook ads now. Oh—,” and there’s no consistency.
It points back to the niche. Where is your community congregating? The folks you’re targeting. If you have a niche, it’s easy. They’re usually at the conferences or they listen to the podcast for that market or they subscribe to magazines. We need to target where they are but we have to be there consistently. This usually takes 7 touches I think for someone to even know you exist. Now, it takes about 70. Yeah, so you have to be constantly present.
And the last thing, this is my favorite marketing technique. I actually talk about at it ad nauseam and I’m surprised how few do it.
We need to break the label.
This is a real simple little marketing technique but it really plays into an advantage for us. And here’s what it is:
If I tell you I’m an accountant and you’re my prospect, you immediately have a picture of what I do in your head because you already know what an accountant is. Therefore, it’s very hard for me to point out my differentiator because you already have a picture in my head I have to dispel the image of what an accountant is.
So, we tell our members, “Tell your prospect that you’re, for example, a profit advisor and expect that you’re in the headlights because that’s a term they’re not going to be familiar with. Then explain, ‘My base service is accounting, I’m extraordinary with that, but you should expect the extraordinary service from any accountant. What makes me unique is that I have the specialized skills to drive profitability in your business.’”
So, basically, pick a term that points to your differentiator for yourself. You want to get the “deer in the headlights” look because now they can’t put you in that box of all of the competitors and you can point out how you’re different.
The one caveat is this: do not use a marketing term or something gimmicky. That will dissuade the customer. Acknowledge, of course, that you’re an accountant but also realize that from a customer’s perspective, all accountants are the same, all bookkeepers are the same. We need to distinguish ourselves and a unique term will help in doing that.
MRM: Very good! Oh, my gosh, that was just gold right there.
MM: Great.
MRM: Thank you very, very much. It is very helpful to hear this because everything you just said are things I’ve noticed also.
So, yeah. So, hopefully, the more that things are said and discussed among the professionals, maybe then some changes will start to happen.
MM: Yeah, I agree.
MRM: Because you said that it’s not just 7 touches, it is 70. I mean, it’s the same thing. We also need to hear the same message over and over, and over to —
MM: Over and over.
MRM: To say, “Oh, yeah, maybe I should do that.”
MM: Right. Exactly.
MRM: You’ve written several best-selling books: Profit First, The Pumpkin Plan, and The Toilet Paper Entrepreneur, which BusinessWeek called a business cult classic.
Your books had been translated into 10 languages, so you know the power of the written word. What can CPAs, accountants, and bookkeepers do to leverage the power of the written word for their own business?
MM: So, I think I found at least for my life, there’s only thing that dictates a stronger authoritative position if you will than speaking on stage and it’s putting something in writing, in a book particularly. It seems—it only seems magical that when something—the exact words you are saying to your clients when you put those between hard covers that the perception is—that it’s the word of God almost, that it’s taken with so much significance.
I’m a huge fan of books. I’m a huge fan of business authors or anyone that can educate the business market to help them improve their businesses. So, I encourage anyone who feels compelled to write a book, write a book.
My one word of advice is to write a book that serves. The books that fail are the ones that are really just seeking to bring in business like, “Oh, I’m going to tell you steps one through four but there are four more steps after this, so you have to call my office to learn about them.” That’s a sales guide. Those books don’t change lives.
And, the irony is this realization I had for myself – when I started writing my books, from day one, I got more businesses coming to my business than I ever anticipated and the common theme was I gave away everything I knew in the books. This is amazing. Others then wanted me to be their guide in enforcing this or helping them with that.
So, when you write a book as a CPA, give away everything because there are two types of readers. There are the do-it-yourselfers. They’ll read your book and be able to actually do it themselves and become a wonderful referral source when someone else says, “How are you doing this?” they say, “Well, I read this book.”
Now, the other half of readers are the ones who want to find an educated expert. They read the book and say, “Yes, these are the answers. But man, I don’t want to put that time into it. I’m going to call the person who wrote this book.”
MRM: Brian Clark, who started the site Copyblogger, said that whatever you give away, if you give away a bunch of stuff, people are going to think, “You’re giving away all of this for free. What else do you know?”
MM: Right.
MRM: So much has changed within the accounting profession. What must a CPA, accountant or bookkeeper do to position them for success in the upcoming year and beyond?
MM: I think the biggest thing we need to do is prepare ourselves for the rise of the machines, something you and I talked about before we started this interview. CPAs and accountants really need to start becoming more consultative, interpreting the numbers and giving our clients guidance on how to move forward and achieve their objectives.
Accounting in the traditional sense was preparing tax returns, reduce the tax liability, mitigate other financial problems that may present themselves. I think now with the computers becoming so sophisticated, they can now handle those tasks. We’ve got to be proactive.
Meaning, as the computers spit out the numbers, we need to be approaching our clients saying, “Here’s what the future is looking like and here are the suggestions and actions you should take.” So, really become a consultant to our clients and not one that is looking back but one that’s looking forward.
MRM: Yes. I’m working with a CPA owner who uses a term I really like: he’s targeting “growth-oriented businesses.” So he wants to help—he’s already branded himself as the CPA firm that is going to help businesses make more money, not just save money with taxes or whatever, but actually be profitable. And, that profitable term is very much a keyword for many small business owners.
MM: Agreed.
MRM: If this was the first time someone learned about you, which of your books would you recommend reading and why? And also, please add any other books you think are “must-reads” for the growth-minded CPA, accountant, and bookkeeper.
MM: I used to refer to my favorite book and say, “Oh, you should read The Pumpkin Plan or you should read Profit First.” But then I found there’s a better way of telling or guiding people for a book to read. I ask them, “What’s the biggest challenge you’re facing in your business today?” And based on that feedback, I make a recommendation.
So, The Pumpkin Plan is if you’re looking to become a niche specialist. The Toilet Paper Entrepreneur is if you’re at the very early stage of your business and trying to get traction. Profit First is if you want to actually increase your own profitability or guide your clients’ own profitability. And then Surge, another book I wrote is about catching momentum of a market.
I always ask a client what are they facing now and seek out a book that addresses that. For me, I’m reading the book, The Goal. It’s a book I read about two years ago. I fell in love with it. It’s actually for manufacturers, but it applies to all businesses and how to make them efficient, so that’s the book I’m thinking to now. And, I love it. Now, the reason I’m reading this, I’m a co-owner and manufacturer. This is a need I have in my business – how to make the manufacturing business more efficient, so that’s a challenge I’m facing and therefore that’s the book I’m—in this case, re-reading.
MRM: Wow! That is interesting. I did not know that about you.
MM: Yeah.
MRM: You’re involved with manufacturing, too?
MM: Yeah, in St. Louis, Missouri, it’s a leather manufacturer. That’s another benefit of being an author is it attracts a lot of people looking to get your guidance and work with you, and some people—it becomes pretty compelling. So, I’m an investor or a partner, really is a good term – in two businesses, a manufacturer and also an augmented reality company.
MRM: Next question. What is the one thing you’ve done in your marketing that has produced the most surprising result?
(I shamelessly swiped this question from one of my copywriting heroes, Kevin Rogers.)
MM: I always like to try out things that are different and new and haven’t been done before. So, on my own website—and if you check it out, you’ll see. It’s different than most websites. I found that a lot of people struggle with my last name, “Michalowicz,” like you did in the beginning. I decided to make this weakness my biggest strength.
And so, on the website, I make fun of my own name. I want people to get engage with it so they can learn how to pronounce my name and—it’s the reason that’s important. It’s important if you read a book by an author and you don’t know how to pronounce the name, it’s hard to remember that author and sometimes it can be less compelling to read that book because you can’t pronounce the person’s name.
So, I said, “Okay, this is a weakness of mine. I got to make my name stronger.” And so, on my website’s homepage, I have this little button where you can click on my name and it starts doing all these mispronunciations of it.
Well, here’s something I tried out. I literally—whenever I talk to someone who’ve seen my website, literally, that’s the first thing they always bring up and say, “Your last name is so hard. Oh, the ways you make fun of your name is hysterical and I know it’s Mike Michalowicz now.” So, it’s a fun way of educating people about my name. I actually did this as a hoot. I didn’t expect it to be so popular and it has been.
MRM: I’m on your website right now. I see it and I just love it. This is hilarious! Because when you put the cursor on the “mi-kal-o-what?” your picture changes and you get a funny quip.
MM: Right.
MRM: It’s really wonderful. Because what you are doing here (which you have advocated), is showing your personality. The one thing I was impressed about you right off the bat was the energy you had and such an earnestness. I mean, I could tell that this is a genuine thing for you, that you really want to help entrepreneurs, but you’re fun. You’re a lot of fun!
MM: Thank you.
MRM: Yeah, you’re welcome. But that comes across very strongly. And, I think going back to what you were talking about with personality; one of the ways I’ve helped a few clients is by creating a branding archetype. There are about 12 branding archetypes. The “Trusted Adviser” is just one and everybody wants to be the trusted adviser. But it’s not just accountants or bookkeepers. In the information security world, it’s the same thing.
MM: Sure.
MRM: Everybody wants to be the trusted advisor. But they don’t realize that there are other branding archetypes such as The Rebel, The Magician, The Artist, The Everyman. I mean, there’s like a ton of them. The Clown or The Jester is another one, too. But the thing is, that adding more personality can really help differentiate yourself and by you doing what you did with your web page, I think it immediately puts you in an accessible place. People are attracted to that and all the fun images you have.
MM: Right.
MRM: The one I’m laughing at right now is the one with the—you have a necktie around your head.
MM: Yeah. It’s another little marketing technique that really played out well – those pictures – because people really stay on the homepage for a long time.
MRM: Yes.
MM: And, yeah, the goal is to show that I’m no different. One of the challenges authors have and speakers have is while you are on stage, you are seen as an authority but you’re also seen therefore as different, better. And sometimes, because of what you are doing and how you are living, it becomes impossible for the person listening.
MRM: Right.
MM: So, I always want to show that this is just my journey, but I’m not anything special. I’m a regular guy and that’s what I try to show in those things.
MRM: The last question, what question didn’t I ask you that you wish I did?
MM: There’s one question I get asked now because I’m working with so many CPAs and accountants and bookkeepers: Is the industry actually going away? I love that question.
It’s not going away, but it’s definitely not staying the same either. I think we’re undergoing a massive shift, but as of today, we’re still early on.
What I liken it to, is kind of like the horse and buggy. If we were going back in the olden days, there was a time if you wanted to move around or if you wanted transportation, you used the horse. And it was only when the invention of the automobile came about that we started this slow decline in the beginning. It’s where Ford and the Model T came along. But people used horse and buggies. That’s how you got around. And slowly over time, the car got more and more momentum and then at a certain point, it just exploded and everyone had a car and no one had a horse and buggy. I guess, well, if you’re Amish, you have a horse and buggy but no one else gets around by horse and buggy.
We’re seeing this happening again in the automobile industry. This is a parallel with taxis. Taxis have started to decline. Uber and Lyft are chipping away at an exponentially growing rate, but if you ask taxicab drivers if their job is in jeopardy, they say no. We’ll always need a taxi.
I beg to differ. And, I think the taxicab drivers that are going to do best are the ones who are now doing the Uber and Lyft services.
So, I see the same thing happening in accounting. Automation software is unbelievable; the sophistication of the software is unbelievable. I’ve been with companies now that are not the QuickBooks of the world or the Sages, but are companies you haven’t heard of before that are working in a back lab trying to develop artificial intelligence that will take QuickBooks and Sage out of business.
There’s some really sophisticated unbelievable stuff going on. And, I don’t know who’s going to win the software battle, but I know it’s going to force accountants, CPAS, and bookkeepers to fundamentally shift who they are. And I see some making a leap now. They’re moving to become consultants, coaches even to their clients, like business coaches.
And so, the issue is not going away, but we got to jump on this change, otherwise, you’re going to be caught under it and it’s just going to roll you over.
MRM: Yes. And along with that comes the changing in how you market yourself, how you position yourself.
MM: Exactly.
MRM: I like what Martin Bissett said during one of your GYAP podcasts. I actually wrote it down. I was like, “Yeah, this is so true.” He said accountants need to get back to “the true noble mission,” which is to help businesses thrive – not just record history. And, I thought that was really profound because again, it’s something Greg LaFollette alluded to when I interviewed him. He said, “Business owners are basically coming to accountants saying, ‘I want you to hold my hand. I want you to guide me. I want you to… like there are financial decisions I need to make and I need help navigating that.’”
And, just the compliance issues, which before, took a lot of time because you didn’t have a software to help you. But now, the software is there. So, the accountants now could be the translators, the Sherpas in a way, saying, “Okay, I’m going to show you how to work this software so that you get everything out of it.” I like what you said during that interview. You were talking about partnerships or Martin was maybe talking about partnerships.
But I think ultimately, what you’re just saying is that there’s going to be different expectations from the business owner towards the accountants, CPAs, and bookkeepers. It’s like, “Okay, I already have this. This has already been solved for me. What now do I need to solve next? What’s my next biggest problem? And how does a CPA and a bookkeeper or an accountant, how do they fit into that problem? How can they answer that need?
MM: Right.
MRM: Very good. Mike, thank you so much for your time and all the wisdom you just shared. This was phenomenal.
MM: Great. Thank you.
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If you’re a CPA, accountant or bookkeeper, you really owe it to yourself to subscribe to the podcast, “Grow My Accounting Practice.” It’s just chock-full of great stuff and you will indeed grow your business. So make sure to check that out.
And to learn more about Mike Michalowicz, you can start here: http://www.mikemichalowicz.com. His website is a perfect example of how to inject personality into your brand and still communicate a powerful message.
