[IMGCAP(1)]Every accountant who wants to thrive, or at least survive in the ultra-competitive economy of today, must make sure that they take all the necessary steps to achieve maximum efficiency in all areas.
One of the most important parts in ensuring a profitable business is reducing client acquisition costs, which means that the cost of a new customer (CAC) has to be less than the customer lifetime value (CLF). An acceptable reality for many is when the CAC is equal to the customer’s value for one year, but in a well-run practice yearly value of a customer should be significantly higher than the CAC.
Another important aspect of thriving as an accountant is making the practice itself as efficient as possible. When new clients are acquired, the client onboarding process, which makes sure that the new clients are properly integrated into the workflow, developing successful strategies and starting to implement them as soon as possible, has to be done as quickly as possible, while remaining effective.
Both of these traits of a successful accountant practice can be attained through a few good practices on the behalf of each of them.
How to Reduce Client Acquisition Costs
As it pertains to the reducing of customer acquisition costs, the three main steps are:
1. Measuring Your Costs Often
Accountants should carefully analyze client acquisition costs throughout the year and make improvements where possible, updating their strategies at least a couple of times annually. Only through thorough analysis and planning for improvement can a sufficient level of effectiveness be reached.
The accountant must track:
Their client demographics, as they can change in just a couple of months;
Trends of the industry, through observation of competitors and changing habits and preferences of current clients.
2. Combine Efforts With Other Businesses
In almost all industries there are businesses that differ in their provided services and products, but both are related enough to have a similar customer base. In the case of accountants, these could be financial advisers, auditors and others.
This can be utilized, combining your efforts to attract customers by:
Partnering up on your marketing efforts;
Developing mutual deals that can be streamlined to provide a better offer; and
Endorsing each other to current clients.
3. Maximize Conversions
One of the biggest mistakes an accountant can make is not putting enough planning and effort into making their pitch for the client as good as possible. A good idea is to hire a professional to come up with an effective model for client acquisition.
A business with less leads but a better conversion percentage can sometimes have much more success than one with a bigger lead flow that does not effectively convert them.
How to Minimize Client Onboarding Time
As for reducing client onboarding time, there are three important steps as well:
1. Decreasing Information Processing Time
One of the biggest challenges with client onboarding is helping them process all the needed information efficiently and quickly.
It may involve meetings, video material, printouts and software, among other media, which helps to get them on board with your practices and work-related specifics.
2. Improving Communications
In working with clients, one of the keys to success is constant communication, to ensure that any new developments in the projects is taken into account by everybody and all decisions are made with the new information processed.
This is where cloud-based software can come in very handy, as, unlike PC-based software, it is accessible from anywhere and the data can be viewed, processed and updated quickly by anyone who is granted access.
3. Figuring Out Goals and Perspectives of the Client
This is commonly not done properly, which leads to inevitable setbacks during projects. The goals are not clearly defined and thus the plans of accomplishing them are not effective.
Before starting any project, all the goals, perspectives and preferences must be figured out, and only then the plan can be put together and executed.
Guy Pearson is founder of Your Modern Practice. He is a firm believer in shaking up the accounting industry and focuses on bridging the gap between businesses and better financial information and advice.