the profession has long recognized an “expectations gap†with the public’s view of auditor liability. but in this report bay street group discovers a “new expectations gap,†whose effects could be just as deleterious.
the new expectations gap
in this study, 1,799 accountants, finance managers and cpas from all sectors of the profession were queried in an online survey conducted throughout most of 2006.
of the respondents, 62% work in public accounting, which in this report are classified as “cpa firms.†the rest, 38%, work in the business, industry, government, not-for-profit, education or vendor sectors, which in this report are classified as “clients.†some 75% are c-level decision-makers and influencers.
the study makes important new findings in the discrepancies between the behaviors and opinions of cpas and their clients.it should prove useful to both cpa firms seeking to fine-tune their client acquisition and retention strategies, as well as to finance managers charged with engaging a cpa firm and evaluating its performance.
key data points in this “new expectations gap†include:
1. client satisfaction — cpa firms grossly overestimate client satisfaction. some 93% of cpas believe half or most of their clients are sufficiently satisfied to recommend them. but only a bare majority of clients (55%) would recommend their current cpa firm.
2. identifying decision-makers — the overwhelming number of clients believe they – as cpas, finance managers, executives, and individuals – are the “main decision-makers†in the hiring of a new cpa firm. but most cpa firms believe the owner is the key person. only 17% estimated correctly that about half of their clients would be “recommenders.†(note: the trend holds true when all sizes of cpa firms are compared against all sizes of clients.)
3. identifying influencers — cpas underestimate the importance of senior financial executives in the decision to choose a new cpa firm.
4. client base stability — 38% of cpas say their average client tenure is “more than 10 years,†but only 25% of clients would agree.
5. marketing tactics — the top three marketing tactics which cpa firms plan to launch or increase are:
— increasing referrals,
— networking and
— website upgrades.
but if clients were writing the marketing plans, they might agree with making referrals and networking top priorities, but they would add seminars. of course it needs to be noted that clients, as prospects, see and experience marketing efforts much differently than the marketers who can parse strategy and measure returns.
6. criteria for evaluating cpa firm performance — in choosing a cpa firm, clients are most concerned about:
— service and attentiveness,
— the reputation of the firm and the quality and
— accuracy of the work.
the data should be studied by comparing and contrasting the responses of cpas and clients. a gap analysis showing the widest discrepancies in behaviors and attitudes can yield startling differences in perspective.
contact information
complete data is available from bay street group llc for those interested in a deeper analysis. for instance, data may be filtered and cross-tabbed by size of cpa firm, by size of client company, by job title, marketing tactic, etc.
contact: hs@baystreetgroup.com, or (914) 674-4531.
all questions, comments, suggestions, critiques and ideas are gladly accepted and may be incorporated in future editions of this study.