Joe Pancerella, CPA, Shillington, PA
Joe Pancerella is one of NCI ‘s recent Plan 2 clients. His firm is located near Reading, PA. Joe had an established firm but he wanted to take things to the next level and insulate himself against what is happening with the recession. He has been considering NCI ‘s program since early 1993 and he felt now was the right time to implement. That’s right; he felt that during the depths of the worst recession since the great depression was a good time to start a consistent marketing program. We get into the reasons as to why that is in the interview below. As you can see in the title, in the past two months of running the program, Joe has already added over $48,000 in recurring monthly revenue.
Chris: In terms of the NCI program what have your results been thus far? When did you get started and what have you been able to accomplish and bring on in that time-frame?
Joe: Well, let me get my weekly report just so we can be accurate with that question. The appointment setters started working September 20 th. Then on October 2 nd the CSR started and already had one client secured. Now let’s count our clients. One the first week, none the second week, and then that’s when it starts to get fun; two the next week, then four, three, two, five, two. So nineteen as of, wait I’m not done, [there are] two more. So at the end of two months we had twenty one new clients and he’s [our CSR] already signed on four this week. So he’s doing well.
Chris: What do those new clients represent in annual revenues?
Joe: We were just totaling this because we are currently in the process of hiring another bookkeeper and we’re going to try and hire one more in the near future. But as of the first two months it’s $4,025 in monthly revenue, so if you multiply that by twelve it’s $48,300 in gross revenues added to my client base, not counting installation work or back-work, also which the clients normally need. I know some of these clients are [going to need] payroll as well. We’ve already gotten two [clients] set up with our Wealth Manager to establish some 401(k)s and some simple retirement work too.
Chris: There’s obviously some great cross-selling opportunities going on there already with more to come, that’s great. And also that doesn’t include tax-work either right?
Joe: Yes that’s correct; it does not include year-end tax work or any type of payroll they would be interested in. It’s just straight $48,000 in monthly fees. It’s not even counting the installation fees or back work. We’ve been quoting individual 1040s between three and five hundred [dollars] and corporate returns we’ve been quoting between six and eight [hundred dollars]. We quoted one corporate client as high as twelve hundred to twenty two hundred [dollars] because it was a multi- state corporation.
Chris: That’s fantastic.
Joe: In two months, what, are you kidding me, it is fantastic!
Chris: Piggy-backing off of that Joe, given the economic climate out there right now how would you categorize your success so far and are you surprised by it?
Joe: Well, I’m not surprised by our success. I don’t know why accountants don’t think sales people are good for the profession. I mean the local payroll providers use them and I worked at a large investment firm and we had salespeople; the money managers didn’t sell our products. Yet for some reason accountants think that the only people that can sell accounting services are accountants, and that’s just not true. I’ve always thought that even before NCI and I really got serious, which was this year, there’s got to be some way to be better than everybody else. The reason it was this year was because it was a down economy. Because what do you have in a bad economy? Accountants in a bad economy are successful [and] accountants in a good economy are successful. It’s a service that everybody needs. But during a down economy what advantage do we have? Well two things; first you’re starting to get some resumes across your desk that will actually work for you at a reasonable rate. Secondly, all businesses are looking for ways to control costs. Our CSR is good and our pricing is competitive, and if you can give a competitive price and show you can do the work then you’re going to get the client. So during a down economy I thought it was an ideal time to sign up. Truthfully, I was glad it was a down economy.
Chris: It’s interesting you should say that Joe because that’s part of what we talk about with someone considering our marketing program. There’s a bit of disbelief because everybody’s struggling with the current economy, people are going out of business and they’re wondering “Is it the right time?” We tell our clients that it’s actually the best time to be marketing. NCI has been around over 24 years and we’ve gone through numerous economic recessions and we’ve noticed that our clients tend to do better when there’s an economic downturn for the reasons you’ve stated. There are good quality sales people and appointment setters looking for work. Also there’s a premium place on good financial advice because people are scared and want to make sure they’re doing the right things with their money. Finally a lot of new businesses get started because of all the lay-offs that take place within the bigger corporations and they are a part of the target market under this marketing program.
Joe: Yes that’s huge. I can’t tell you all the people that get laid off and say, “I’m tired of working for someone. I’m going to do it on my own”. You get some intelligent people who’ve got some capital and they start their own business. And we’ve gotten in front of some large clients; I mean a $530 a month client is not a small client.
Chris: No, and that’s another misconception about this marketing program, that the only type of client you will get are small mom and pop shops. They make up some of the target market but not all of it. There’s no reason however that you can’t get larger clients as well. You will get a wide variety of clients and there’s no reason you can’t get a larger client with this type of marketing, as you just noted.
Joe: I sat down with our management team [in May] and we said, “What are we going to do, because obviously our clients are slowing down, so what do we want to do about it?” Our work was slowing up a little bit, so would we have controlled lay-offs where everybody’s going to get one week off a month? If you think about it, you’re a business owner; do you want to curl yourself up in a ball because the economy is beating on you? Do you want to roll over and take it or do you want to do something about it? Because of the way we run our company, we’re not the type to just roll over. That’s not us. When we were talking about implementing controlled lay-offs or staggering our workforce, we realized that’s just not us. That’s not what we do. We pride ourselves on making sure our employees receive raises no matter what the economy is [doing]. It wouldn’t go well with our corporate culture. So I thought let’s go out and do something about it. Let’s go out and aggressively sign on clients, so if one of our clients calls us up and says I’m going out of business and I can’t afford to pay you, I can say, “That’s fine.” Tim, our CSR, signed on three new clients this week [I already replaced that revenue]. It’s now two months since we’ve signed on with NCI and we’re in such a better place of negotiation. It gives you the ability to say “No”.
Chris: Now you can pick and choose.
Joe: In 2004, I accepted whatever work I could find, hoping it would pay me just so I could keep the lights on. It’s what you have to do when you start out, but it’s not what I want to do anymore.
Chris: The points you’ve made are very true, about being aggressive during a down economy not just going into the fetal position and hoping it all turns out okay, that doesn’t make any sense. You have to be more aggressive. The opportunities are out there so you just have to know how to find them and act on them, which the NCI program allows. It’s obviously working well for you so far.
Joe: Yes, like I said that’s not our culture. What sort of a message do you send to your employees if all of their friends are getting laid off and we’re going to stagger their working hours? We gave our employees raises this year, granted they weren’t as good as [when the economy was booming,] but you sit down with somebody and say, “Hey, all your friends are getting laid off, and instead of getting a 6% raise this year you’re getting a 2% raise.” You’re not going to get many complaints.
Chris: They’re still getting a raise and they still have a job and that’s a lot more than quite a few other people can say so that’s great.
Joe: And with the advent of this program our employees are getting overtime where they never have before.
Chris: The coffers are full, so that’s good. Joe, what would you say is the biggest challenge you’ve faced so far with running the program and the growth that’s come with it? What’s been the biggest challenge thus far?
Joe: I think because our CSR is so good, the biggest challenge is going to be handling the capacity of new clients we’re signing on. We are making sure all the work gets done in a timely fashion and we are keeping track of all these new clients effectively.
Chris: It comes with the territory the more work and clients you get the more you’re going to have to deal with and so it sounds like it comes down really into the processing ends of things. That makes sense when you’ve added the kind of growth that you have in such a short time frame. Conversely Joe, what would you say is the biggest reward of the marketing program so far?
Joe: This is going to sound weird, but I do think the biggest reward is allowing us to go back and look at how we do things. If there is unprofitable work we are doing we can now say no, we don’t want that kind of work, because we know in two weeks our CSR will have replaced that revenue.
Chris: Having that confidence in the CSR gives you the freedom to pass on certain things that before you felt the need to take. That’s a great feeling to have. As part of the Plan 2 program, you attended our marketing seminar so can you just talk a little bit about how that experience was for you. And how you felt about that training?
Joe: I’ll tell you the parts I really liked. I really liked the first day, when Todd went over evaluating all the aspects of your life, you know the part that I mean?
Chris: Yeah, you’re referring to the goal-setting portion.
Joe: Yes, the goal-setting… I really liked the goal-setting piece. I will tell you that I have been trained in sales, so a lot of what NCI knows, I was familiar with, but I thought the training was handled very effectively. I bet I did give you a bit of a hard time, but I really did enjoy the role-playing [laughs]. That was fun.
Chris: Thank you, we try to keep the role-play fun and informative at the same time and I think we’re pretty successful at that but I’m glad you enjoyed it.
Joe: I will tell you, the gentlemen who came out here, Ed Vasquez as the trainer; I think he did a very nice job with Tim, our CSR. Pete [Borrelli], I really think he and I probably disagreed every day if not several times a day. But I have to tell you, he stood his ground and on a lot of things he was right. We did get the three best candidates. So he did a good job as well [during recruiting week].
Chris: Thank you, they’re both very good at what they do. So where do you see things going from here, Joe? What do you have planned for the coming months and years ahead?
Joe: Well, we’re going to be interviewing bookkeepers next week. So hopefully we’ll be hiring one bookkeeper. And we’re going to be hiring a second one most likely… in January or February. Along with that, Reading has a somewhat substantial Latino contingent and we [already] have a bi-lingual accountant. The bookkeepers we’re interviewing next week are also going to be bi-lingual, but we’re also strongly considering bringing on a Spanish speaking CSR to really target that segment of the market.
Chris: We’ve hired bi-lingual CSRs for that type of thing in the past and it usually works very well. Joe, what advice would you give to somebody who is considering undertaking this program? It’s a sizeable investment and some people are tentative about spending that kind of money with the economy, we already touched on that, but some people are a little hesitant, so what would you say to someone like that?
Joe: Well, let me give you my humorous response first. When people have asked me “Oh, you have a sales person, how’s that working for you? I just say, “It’s horrible; don’t even think about doing it. It’s terrible, we’re making a lot of money and I mean you shouldn’t do it because if you do then that’s just one more person out there doing what I’m doing.” [What I'm jokingly saying is] “Don’t do it; that way there’s more for us.”
The reality is when you write that kind of check you now have somebody who’s holding you accountable for it. When you pay the amount we paid, [around] $30,000, it makes you accountable for that large investment. I also think you [ NCI ] are an excellent resource to go through; you do what you say you’re going to do. If you’re serious enough to put that check into place, then you want to look at a return on the investment. I paid NCI with a $30,000 check in July or August and I’ve received $48,000 in [new] gross revenues. If you went out to buy $48,000 in gross revenues you’d at least pay $48,000 x 1.25 so that’s $60,000. So we’ve at least reached that goal. It’s actually a relatively inexpensive client acquisition. We’re accountants so we have our lunch money. I don’t know how you get around that, God bless you for dealing with us, because we’re a pain in the neck [laughs].
Chris: Well, that can be true sometimes, accountants are an analytical bunch and paralysis by analysis is common as is a healthy dose of skepticism. Luckily the results of the program speak for themselves.
Joe: At a firm I used to work for, I used to get in arguments with one of the managing partners all the time because I’d say, ” You know what the problem is? The problem is, you look at everything in terms of income and expenses and you’ve got to look at it as income, expenses and investments. Your lights are an expense, so if your lights are on today, you pay for it and you’re not getting any future benefit from your light. But your investment in your employees and your investment in marketing are investments, so they should be on your balance sheet as something you’re accumulating over time.” If you’d look at [investing] $30,000 in NCI [Plan 2 program] as the equivalent to investing in $30,000 of good stocks, then maybe it puts it in a little bit of a different perspective. What better investment is there than yourself? I mean you have a $200,000 portfolio and you’ll go buy $30,000 worth of a Blue Chip stock, why? You think whoever runs that company cares about you? You should put it in your own pocket. At least if this program doesn’t work, we can pull out at any time. Also, we can make modifications since we have control of the program, but I can’t tell my Blue Chip stock what to do with my money.
Chris: That definitely makes a lot of sense. It’s an investment not an expense and that’s just the wrong way to look at it, or as my father is fond of saying, “They’re looking at the horse from the wrong end”.
Joe: We’re in December now, and accountants in general normally complain because you’re a month or two before tax season and you open up your bank account and the money flows out of it because you’re not really doing much [work]. Also, your insurance is renewing and all your CPE courses are coming up so you’re spending money hand over fist. However, it’s really nice getting that $250 installment fee [per client]. Technically our CSR has paid for himself since day one, because even though we pay him his salary, I never shell out a nickel he hasn’t earned [by securing clients].
Chris: That’s the whole point. That’s how we designed it to work, you know? The CSR carries their weight by selling.
Joe: You know what’s funny is that you [ NCI ] have your projections, but truthfully with all the businesses I interviewed off of your referral list, they all said the same thing. They said to be ready for the growth, because all of them had about 8 to 12 new clients per month. You’ve got expenses too because you’re spending on advertising, packaging, and new employees coming on board, so we’ve committed dollars to this. We thought if this program broke-even in twelve months we were still going to be absolutely fine. I mean we would break even. Though we were looking to repay ourselves in twelve months, I guess you could argue right now that NCI ‘s program covered itself after only two months.
Chris: So what are you going to do with all this extra money Joe [laughs]? In all seriousness though, I’m definitely happy for you, and it sounds like everything is working as planned.
I would like to thank Joe for his time and also for his wise and kind words.
ou may contact Joe Pancerella at (610) 796-1066.
Chris Clark is the oldest son of New Clients Inc. founder and CEO Bruce Clark. He has worked as a Senior Account Executive at NCI for the past four years. During that time he has presented at the Practice Development Seminar on Internet and E-mail marketing and he also plays the prospective client during the seminar role play sessions. Chris also edits and contributes to the NCI newsletter, New Client News.