the nine steps to locking in client loyalty when competitors come for your clients.
by bill penczak
client relationships have never been more vulnerable, as other firms, reeling from the covid crisis, will be knocking on your clients’ door with promises of better service, more services, and lower rates.
more: re-thinking today’s firm with five global leaders | 5 things your firm should do differently this summer | do you have the guts to beat the covid crisis? | how to inoculate your firm against covid competition | ‘found money’ delights clients | the three r’s for beating the corona crisis
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now, more than ever, tax and accounting firms should examine how they can constantly improve the service and relevance to their clients, for today and into the new normal.
here’s a story to help make the point:
the tax partner couldn’t stop fidgeting in her chair. it was evident she was under a lot of pressure, and her demeanor belied the fact she wished she was anywhere but in that conference room. this wasn’t an irs audit. it was a client satisfaction meeting with a client with whom she’d worked for years.
there were no service issues that caused her distress. the others in the conference room – the cfo, company owner, and the firm’s audit partner – were engaged in a spirited discussion about the client’s plans to open a new production facility in a nearby state, and their plans for product line extension that would increase sales by a projected 20 percent in the next three years. but the tax partner remained quiet and nervous.
on the drive back to the office, the audit partner commented about the tax partner’s silence and obvious discomfort, and she confided that she didn’t know the client was expanding to the new market, and sheepishly admitted she didn’t really know much about their business in general. and she didn’t want to ask questions about topics about which she should already be familiar.
“most middle-market cpas are really smart, but they are not great business people,” said a former big 4 auditor who went on to start two successful consulting firms. “they have their technical acumen, for certain, but when it comes to running a business, or providing strategic insights for a client, or even understanding how they make money, most partners are pretty terrible,” he added.
cpas can neglect to appreciate that their core service is a necessary evil for some clients – if the irs didn’t require a tax return, or the bank didn’t require an audit, the market for accounting firms would disappear like a partner on a friday afternoon in july.
but the firms that successfully cultivate client satisfaction follow these behaviors:
1. technical acumen and business hygiene. it should go without saying that you have to excel in performing the duties for which you are being paid, which also entails keeping abreast of regulatory changes, anticipating industry changes that could impact clients’ reporting, and triple-checking work before sending it to a client. while that may sound obvious, i’ve heard too many horror stories of clients leaving because the firm missed the basics, deadlines being foremost. another client pain point is surprise bills, caused by a lack of communications and/or poor planning on the part of the firm, the client, or both.
2. team stability and consistency. one of the most common complaints i heard in the past 150 client service interviews i’ve conducted was team turnover. while the firm may have the same partner on the business, new managers or staff, asking the same questions as were posed by a different team from the same firm the previous year, grates the hell out of clients. team consistency, year over year, will increase client satisfaction.
3. being proactive. the biggest disappointment in a client relationship is when a client hires another firm to perform a non-core service (i.e., salt) because they were unaware that the firm provided that solution. clients have their own businesses to run and are far from focused on what is happening in your firm. be proactive by talking to clients more than just during compliance season, and they will know that your relationship is more than a transactional one.
4. industry insights. when firms achieve the level of roughly 10 partners, there’s an inflection point at which the firm starts organizing itself into industry groups. this shift occurs when there’s a partner with an interest or skill in an industry, or when the firm has a number of clients in the same industry and realizes an opportunity to lever that into new client relationships. incumbent, therefore, is the obligation to provide industry information, trends, etc. not only regarding compliance matters but also business issues unique to that industry. i’ve told senior managers on the partner track that the best way to shine is to find an industry passion and become the firm’s sme on the industry, as you will be invaluable to your clients and rise above your peers. this approach requires time, reading, and generally leaving your comfort zone, which is why so few middle-market cpas are good at it, or even attempt such specialization.
5. not being reticent to ask questions for which you don’t have a ready answer or out of your current wheelhouse. when i was conducting client satisfaction interviews, i was fearless because as a non-service delivery professional, there were no expectations that i would know anything about the company or the industry. partners, or those wishing to become partners, must develop the comfort in asking open-ended questions and not always having to have an answer in the moment. for many trained with more linear thinking, this is an acquired skill. famed management consultant peter drucker once said, “my greatest strength as a consultant is to be ignorant and ask a few questions.”
6. actively sharing thought leadership or relevant operational or industry data. few if any middle-market firms can match the industry thought leadership of the largest firms. but that shouldn’t preclude your firm from sharing information found in general business publications or client industry publications with your clients. the mere fact you thought enough to share an insight fosters client loyalty. and this is an assignment you can give to a rising star in your firm, having them find relevant information to email to clients or post on social media.
7. connect clients. in several client satisfaction meetings, when asked how we could be of further value to the client, we were told that providing a forum to discuss industry issues with others in the same industry would be extremely valuable. the opportunity here is for firms to host industry roundtables on important topics – even if they don’t relate to tax or audit. one other suggestion from some clients was to make introductions to companies to whom they could sell their products, just as most firms do with referral sources. helping a client win a new piece of business is a sure way to cement a relationship.
8. industry benchmarking. cpa firms have access to reams of data about company operations: debt-to-equity ratio, cogs, dso, leases, revenue growth, ebitda, etc. imagine if a firm could aggregate that data, publish a report, and then benchmark an individual client’s data against their peer group data. would that not demonstrate to your clients that you not only were versed in the success drivers of that industry but were bringing additional value and insight about how they were operating? and this process is a great door-opener for prospects – request a prospect’s business kpis and compare their performance to your aggregate client base. i’m pretty sure any company owner or cfo would champ at the bit to see how they measured up against their peers. i call this process “benchmarketing” and if you’re interested, have some examples i can share if you email me.
9. benchmarking your own client satisfaction. many of the larger firms benchmark their client satisfaction annually and reward the teams with high scores. the standard measurement is a net promoter score; amazon, sw air and nordstrom typically have scores in the 70s. the average for cpa firms last year was a meager 24, which is in the realm of cable tv providers. but high-performing firms like armamino do far better and promote their scores to clients and prospects. and if there are service issues, the process can identify them and bring them to the attention of management, who should address them immediately rather than waiting until the client fires you to find out.
