Perceptions of accountant advertisements. (Management of an Accounting Practice)by Ainsworth, Penne
Accountants and Advertising
Several studies have been conducted on the attitudes of legal, medical, and accounting professionals toward advertising. This research found that a majority of professionals were against advertising. The general attitude expressed was that it would harm the image of the respective professions. One study reported that 50% of accounting firms in business more than 10 years indicated that they would never advertise.
These negative attitudes seem to be changing. Younger accountants entering the profession have increased the use of advertising. Sixty- five percent of the accounting practices in operation for less than five years are currently advertising or will begin to advertise. Research indicates that with proper advertising a good professional image can be developed and maintained. This suggests that advertising is seen as an important marketing strategy. Many accounting firms believe that advertising can help expand their client base.
Clients and Advertising
Studies of consumer attitudes towards advertising by lawyers, doctors, and accountants have shown strong favoritism for advertisements. It is a means for clients to acquire information on an accounting firm without much expense or time invested. Consumers think it is more appropriate for accountants than for lawyers and physicians, to advertise. Consumers are more inclined to use the services of an accountant who advertises. Advertising should be viewed as a communication medium that will enable accounting firms to engage in image development and a delivery vehicle for information to potential clients.
Purpose of the Study
A study was undertaken to examine the perceptions of small business executives concerning the advertising of accounting services. Specifically, the content of print advertisements in terms of qualifications, services, and price were examined. The perceptions held by small business executives of advertising content in these areas also allow inferences about their perceptions of accountant advertisements in general. A discussion of these variables and the methodology employed in the study follows. Advertising strategies for accountants will also be presented.
A questionnaire was sent out to a nationwide random sample of 1,000 small businesses provided by a national mailing list company. A small business was defined by the mailing list company as one with 20 or fewer employees. Small businesses were chosen because they are most likely to be clients of an accounting firm that would advertise on a local level.
One hundred and eighty-six questionnaires were returned for a response rate of 18.6%. Ninety-six percent of the respondents were in some type of managerial position such as president, CEO, owner, or vice president. The major accounting service used by these small businesses was tax preparation (73%). The average number of full-time employees was 9.6 and the median amount of gross receipts was $698,000. Sixty-seven percent of the respondents were from firms that were incorporated, 25% were sole proprietorships, 7% partnerships, and 1% nonprofit organizations. The firms were located in 35 different states and had average gross receipts of $17,463,463.
Most of the accounting firms used by the small business charged fees by the hour or by the service. Forty-three percent of the respondents indicated that their firm charged by the hour and 27% said their accounting firm charged by the service provided. Only 16% indicated a monthly charge. This is probably due to the fact the most widely used service is tax services rather than write-up work.
The questionnaire asked respondents to express their agreement or disagreement to several statements about advertising by accounting firms. Responses to statements concerning qualifications, services, and price have implications for advertising content targeted at small business executives. The statements in the questionnaire and the results are presented in Figure 1.
Several items asked about the qualifications that a small business executive desired in an accountant. Eighty-six percent of the respondents indicate it is important that their accountant is a CPA. Although this appears to be intuitively obvious, this implies that people in small business perceive the CPA credential to be an important criterion in their decision process. Even though the CPA credential is only needed for auditing and other attest services, the respondents consider it important for other areas in assessing the qualifications of the accountant. This implies that an accountant with a target market of small business executives should consider getting a CPA license even if most of the work is done in tax. Small business persons associate a degree of competence with this credential.
Respondents also considered belonging to a professional organization as being important. Sixty percent of the respondents indicated it was important for their accountant to be a member of the AICPA. This is probably due to the perception that membership in this professional organization keeps the accountant current in the various areas of accounting. It may also indicate an expectation of some form of quality control. Membership in a state CPA society should also add credibility to the accountant's credentials. TABULAR DATA OMITTED
The advertising implications are intutive. If one has a CPA license, he or she should advertise that fact. In addition, a CPA should join the AICPA and his or her state CPA society to add credibility to their qualifications. Inclusion of membership in an advertisement is beneficial. In the same vein, 88% of the respondents indicated that it was important for accountants to list their qualifications in advertisements.
The small business executives were asked several items about what services they wished to see in an accounting firm's advertisements. The responses differed considerably when questioned if it was important to include services in an advertisement placed in the yellow pages and in newspaper. Seventy-two percent of the respondents thought that it was important for the yellow pages while only 47% thought so for newspaper advertisements. Small business executives think that if a person is looking for a particular service in the yellow pages all services should be listed. A less complete advertisement is needed for newspapers where all interested and uniterested consumers receive exposure. It is possible that small business executives perceive a difference in goals from these two advertising sources. Regardless, the cost of advertising can probably be reduced by eliminating a long list of qualifications in newspaper advertising while maintaining this list in the yellow pages.
Other service-related questions deal with the importance of an accounting firm offering: 1) an after-hours telephone number; 2) extended evening hours for small businesses; and 3) extended weekend hours for small businesses. Fifty-nine percent of the respondents thought it was important to have an after-hours telephone number while 63% considered it important that a firm offer evening hours. Fifty-two percent reported that weekend hours were important. Small business executives are looking for convenient hours when selecting an accounting firm. It is important that these hours are advertised.
The last area of interest involved questions related to price. Respondents did not consider it important to include a base price in an advertisement for accounting services. Only 34% thought it was important. A statement concerning the use of the term "reasonable rates" was used to determine if respondents were suspicious of the words "reasonable rates." Seventy-five percent disagreed that "reasonable rates" were too expensive. Evidently, the phrase "reasonable rates" for most of the respondents did not connote expensive fees. Only 31% of the respondents felt that a $35 an hour fee was too expensive for small businesses. Although respondents did not think it was necessary to advertise a base price, they seemed to have an expectation of a reasonable fee schedule.
Finally, participants were asked if they thought high quality services were associated with high fees. This was overwhelmingly rejected (89% disagreed). Respondents believe that CPAs are more expensive than non- CPAs (71%). This does not bother the small business person because, as stated, most expect their accountant to be a CPA.
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