Firm Spotlight: At Herbein + Company, A Little Peer Pressure Among Staff To Generate New Business Is A Beautiful Thing

If you’re busy serving clients, and new business is coming in, is it enough?

Partners at Herbein + Company of Reading, Penn., decided that the answer was no. While the firm did a good job with their existing clients, and they were pretty good at answering the phone and taking orders, firm leaders could no longer assume new clients would come to them from word of mouth alone.

H + C set out to develop a comprehensive strategy to actively develop new business by hiring three marketing professionals, making stronger connections with the business community and giving bonuses to managers for bringing in new clients.

In about two and a half years, the firm has reinvented itself. Various marketing programs have built brand awareness for the firm in the Pittsburgh market. Managers are networking at business events, and partners are tracking progress on new business weekly. The changes have benefited more than the firm’s bottom line – the long-term advantage is that young professionals are seeing greater opportunities for promotion within the firm.

IPA asked firm president and CEO Carl Herbein and operating officer and partner, Thomas Bakaitus Jr., to discuss their strategy.

The firm started by hiring a consultant to look at the big picture. “Every firm has rainmakers,” Herbein tells IPA, “but to keep it growing, we realized that with a professional marketing culture we [can] depend more on a system and an overall firm method, rather than hoping the next senior we promote will do it.” The consultant helped the three-office firm develop a marketing plan and a job description for a new marketing director. Jack Kolmansberger, with over 10 years experience in marketing accounting firms, came on board as chief marketing officer in the firm’s headquarters office in Reading, then two more marketing personnel were hired.

Last fall, the partners decided to send out an e-mail marketing report, to the staff, every Monday that shows new clients, proposals that are outstanding, and a “batting average” that shows the percentage of proposals the firm won or lost. There’s an incentive, too. Managers who bring in new business get a bonus of up to 10%, based on the realization of collected billings. The program also credits managers if the work is recurring or if credit is shared for bringing in new clients.

The weekly report includes the initials of team members, so everyone knows who is generating new business. Although the system can create internal competition, no one balked. “There was no pushback,” Bakaitus says. “I can’t think of one situation where we had any whatsoever.”

Herbein says managers understand that the firm works as a team and that they want the firm to be around for another 40, 50 or 60 years. “Our people recognize that they need to participate and it can’t just be the partners.”

He cautioned, however, that a program that creates competition must be carefully managed. Consider, for example, a professional who isn’t a great business developer but is an excellent technician. While that person’s initials may not appear next to a new client on the report one week, he or she may have more charge hours. That information is also published. “Sales is a top skill, but it’s not the only one,” Herbein says.

Since October, the firm has experienced growth of between eight and 10%. “Without making these efforts, we think we’d be going backwards and we’re not,” Herbein says. The firm is part of PKF International, and at an annual meeting, some of the larger firms in the network were reporting negative growth numbers, he says. “We’re not seeing that.”

Herbein and Bakaitus say all these initiatives to bring new business into the firm are about making an investment in the future. The firm wants to remain independent, hire top talent and continue to grow and evolve. “We have a really talented group of two-, three- and four-year people,” Herbein says. “They need to see opportunities or we’re going to lose them, and we have a bunch of keepers.”

To that end, each professional at the office has a personal marketing plan. Because selling the firm’s services is an important part of what partners do, teaching skills to young professionals will help them be more prepared if they decide they want to become partners later. It also prepares them in case a decision is made down the line to consider selling an accounting firm, so that they have a better sense of how to handle such a situation.

He says the firm is transitioning from a “partnership-type environment” to a more “corporate environment.” Rather than a partner having his or her own book of business, the quintessential “eat-what-you-kill” approach, partners are collectively working on the firm’s success as a whole. It’s a cultural shift that emphasizes the talent and depth of the entire firm rather than that of individual personalities.

Herbein and Bakaitus are pleased with the direction the firm is taking, and plan to build on the success of their marketing initiatives. Herbein says, for example, that he is responsible for the firm’s largest industry concentration, the dairy foods business, and he is targeting segments within that industry for greater penetration.

Herbein says he never would have imagined the firm setting up a booth at a trade show 10 years ago, but the firm exhibited its services at the Worldwide Food Expo in Chicago last fall. “It was a wonderful experience,” he shares. The firm will also be represented with a booth at the International Dairy Show in Dallas in September.

Another focus is the Pittsburgh market, where market research shows that the office suffers from being viewed as a small, 35-person operation rather than part of a regional, 110-person accounting firm with depth and experience. “That was something that we didn’t pay any attention to,” Bakaitus says. “There was plenty of business coming in.”

That was then. Now, the firm is meeting with bankers, but in a way that’s much more than a “meet and greet.” The sessions are more like training sessions, where the firm provides valuable information they can use. Firm professionals are also getting out in the community, attending social events and business gatherings.

The efforts seem to be working, as one business person told Bakaitus, “You people are everywhere now.” Herbein has only one regret about the firm’s comprehensive marketing strategy: “I [wish we] would have started 10 years ago.”