Does the Rainmaker Model Still Work?
Relevance and Alternate Approaches to Succeed
Traditionally, accounting and financial services organizations have relied on their firms’ partners to “make it rain” or by using their connections, both personal and professional, along with a sprinkling of charisma, to bring in new business and revenue. How effective is this traditional model in a technology driven world where buyers of services can now access more information than ever to use in their decision-making strategies? Dr. Frederiksen discuss the relevancy of this traditional model.
Traditionally, accounting and financial services organizations have relied on their firms’ partners to “make it rain” or by using their connections, both personal and professional, along with a sprinkling of charisma, to bring in new business and revenue.
But in today’s business environment, the rapid evolution of information technology in general (and of the internet in particular) has changed all that. Buyers of services can now access more information than ever to use in their decision-making. Such resources as websites, social media, digital forums, and other online platforms allow buyers to conduct thorough research on potential service providers—often before the latter are even aware that they are being examined and evaluated.
Goodbye Rainmaker Reputation … Hello Team Value
Because of the bountiful amount of information that is available online and elsewhere, buyers can more easily evaluate the expertise and experience of unfamiliar accounting firms. This ability allows them to search for the firm with the specific expertise needed to solve their business challenges—and one of the results is to significantly reduce the rainmaker’s relevance to the firm’s business development activities. This in turn is leading a growing number of firms to shift to marketing strategies that emphasize their firm’s range of expertise in solving business problems, rather than exploiting the professional network of an individual rainmaker.
This “one-firm” approach creates the opportunity for cross-channel engagements that involve multiple services and a variety of partners and other team members. In the old rainmaker paradigm, the larger the accounting practice, the more likely clients could be siloed to interact only with a specific partner and/or practice area. But in the one-firm approach, as new client business challenges and needs arise, appropriate referrals are made across the firm.
When Rainmaking Ends
Under the traditional rainmaker model, a firm could be highly vulnerable in several ways. Basing the firm’s positioning on the experience and reputation of a lone rainmaker could limit the firm’s flexibility, marketing-wise. But by emphasizing the broader expertise of the team, in contrast, the firm can develop greater visibility and promote its value to an eager market.
In a similar manner, gaining referrals based solely on the personal relationships of a rainmaker presents relatively little value to the marketplace and may be limited to the capabilities of that individual. By comparison, the team approach emphasizes the expertise that resides across the firm, which is what today’s buyers are more often searching for.
Transitioning from the rainmaker model to one based on the strengths and capabilities of the entire team fundamentally changes firm dynamics:
- Business goals: Where the rainmaker model typically emphasizes building relationships, the team approach focuses on raising marketplace visibility around expertise in order to create a competitive advantage.
- Firm positioning: Instead of placing a heavy reliance on a rainmaker’s reputation as a trusted advisor, the team model positions members as “visible experts”—industry thought leaders who are skilled in tackling the specific challenges of clients.
- Referrals: When rainmakers win new business based on their own relationships, they also tend to guard the business closely. In the team approach, in contrast, referrals are won based upon the firm’s expertise and develops new business opportunities across the firm rather than sequestering clients with a single partner.
- Marketing function: Under the rainmaker model, marketing often plays the role of the rainmaker’s glorified administrative assistant. The team approach is different in that marketing has a more strategic role in promoting team expertise and creating opportunities to cross-sell services.
- Firm value: The rainmaker model creates value based on the rainmaker’s practice and personal relationships—and when that individual leaves, the firm’ value can diminish substantially. The team model not only builds more value by promoting the firm and its wide expertise, but also reduces the risk of value loss significantly, since the departure of one team member has much less impact.
I think the team-based approach to marketing is a winning formula for accounting firms. Marketing firm expertise builds brand identity and value, and at the same time, minimizes the risk of revenue loss that can occur when a productive rainmaker leaves the firm. The team approach takes the focus off the individual and places it more strategically on the firm, helping to ensure steady, sustainable growth.
Lee W. Frederiksen, PhD, is Managing Partner at Hinge, the leading branding and marketing firm for the professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to become more visible and grow.
Dr. Frederiksen can be contacted at (703) 391-8870 or by e-mail to LFrederiksen@hingemarketing.com.
