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How do you treat your “1040 only” clients?

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April 2, 2012

The time available to spend with 1040-only clients is so limited, so compressed and so rushed, it can be hard to build a strong relationship. But, why would you? You may think the client will never be more than just a small 1040, so why would you invest your time and energy where there could be little, if any, payback?

While you may be right 95 percent of the time, you probably have a “success story” buried somewhere in your firm’s history where a small, insignificant 1040 client grew to become a top 10 firm business client.

You never know which client could be your next big star, so you first have to extend a basic level of non-tax season care to every 1040 client, just in case. That means sending an annual records retention flyer, holiday card, a year-end tax guide, and a quarterly newsletter/e-newsletter.  This level of attention to 1040-only clients will make clients feel as if you care, and may net you an occasional referral or two.

However, a future business owner needs more attention. They would like to know what it’s like to be treated like a business owner client BEFORE they become one. After all, there is no guarantee they will stay with you as they grow, particularly if you have given them absolutely no reason to do so beyond basic, satisfactory service. 

In recognition of the future potential sitting right in front of you, I’d like you to identify the top 5 percent of your 1040-only clients. Don’t just look at fees billed and realization, but look at potential. It can be hard to identify potential, but think about the traits of some of your most successful clients. Apply that blueprint to your 1040 client base. Who rises to the top and why? 

Now, for those top 5 percent as identified, create a follow-up list for after busy season and consider these activities:

1)    Work on basic relationship-building, learn about their personal hobbies, children, favorite vacations, favorite charities, etc.  Build a bond with them that is stronger than business.

2)    Seek to understand all financial holdings, top financial/tax concerns, what keeps them up at night, and why they worry about those items.

3)    Seek to understand short-term goals, whether it is saving for a 10-year anniversary trip, setting aside seed money to start a business, or helping a family member with financial difficulties, and if they have a plan in place to achieve these goals.

4)    Seek to understand long-term goals, whether they include buying a vacation house, investing in rental real estate, starting a restaurant, moving to the Caribbean, or sending the kids to Ivy League schools, and if they have a plan in place to achieve these goals.

5)    Seek to understand client retirement goals, what—if any—established timelines they have, their finite goals, and if they have a plan in place to achieve these goals.

6)    Seek to understand the relationships they have with current service providers, and their perceptions of those relationships. Is there room for a quarterback to manage all relationships to ensure everyone is aligned and headed in the right direction?

In short, tee yourself up to be more than just their 1040 provider. They may be a “1040 only” client today, but may have the potential to be much more tomorrow. If you are careful in your selection of which relationships to more heavily invest in, you will have a much greater chance of ROI down the road. The minimum you can expect from these types of activities will be greater loyalty, less fee sensitivity (due to increased perception of value) and more referrals. The most you can expect? A future top 10 client.  And, that makes that extra time investment worth it, wouldn’t you agree?

Art Kuesel, director of practice growth and marketing consulting services for Koltin Consulting Group, helps CPA firms across the country hone and maximize their growth plans, build effective marketing and sales efforts, coach partners and managers to greater success and add revenue to the top line. Koltin Consulting serves CPA, law and financial advisory firms with strategic growth, M&A services, executive recruiting and management consulting services. Art can be reached at 312-662-6010 or akuesel@koltin.com.

 

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