by Troy A. Waugh and Angie T. Grissom
Why is it so important to keep existing clients? Because it is much more costly to obtain a new client than to keep an old one.
Research conducted by Bain Consultants, and reported in “The Loyalty Effect” by Frederick Reichland, shows that reducing client attrition by 5 percent can increase profits by between 25 percent and 90 percent. This leverage comes about through reduced marketing costs and increased referrals.
But doing a good job is not enough to retain your clients. You must develop ways to strengthen your relationship with them. When asked, almost every CPA admits that client service is crucial. Yet, most accountants focus most of their marketing efforts on attracting new clients.
You may think, “I give my clients a Mercedes product at a Chevy price. Why would they even consider moving their accounts?” Stop for a minute and calculate your investment in marketing over the last year. What percentage of marketing was devoted to your clients? To your prospects? If you devoted less than 50 percent of your marketing to your present client base, this article is for you.
A partner in an Atlanta accounting firm told me about chasing a “Class A” prospect for over two years. He was finally about to enjoy a luncheon with the chief executive and his attorney when, across the restaurant, this partner spotted his best client having lunch with another Atlanta CPA! Swapping clients with your competitor doesn’t represent the best return on your marketing investment. There is a better way of investing your marketing time and dollars.
When doing training on client marketing, I asked the client to evaluate various instances of great and poor service that they have received. When asked why they changed service providers, over 70 percent said that they changed because of the way some individual treated them. When someone engages your firm, they hire you for good feelings, as well as for technical competence.
So, how do you improve your client marketing program?
Listen to your clients. Spend time with your best clients and keep them informed. There are hundreds of ways to do this, but a few high-touch, high-impact methods build loyalty. Some of these include writing a client newsletter, performing a client survey, holding a client reception, and scheduling specific non-chargeable visits with your best clients.
Use the personal touch. Newsletters are one of the most efficient ways to communicate with a large client base. However, for your best clients, you should carefully highlight, personalize and elaborate items in your newsletter that you think would be relevant to them.
Ask them, “How am I doing?” Client surveys are crucial. The best way to learn what clients want is to ask. If you haven’t done a client survey, do one soon. Don’t shy away from asking questions about loyalty. Questions like: “Would you refer me to someone else?” or “Will you return next year?” are critical. Would you rather hear the answer, or risk your competitor asking the question?
Learn about their goals, problems and plans. Build loyalty with a client business review. This meeting should be about three hours long and include the chief financial officer, and the heads of sales, operations, human resources, information management and administration. You should not charge for this event. It must be viewed as an investment in the relationship. If you have suggestions on how the company can save dollars, tell them. CBR’s foster loyalty and will uncover the need for additional services, which translates into new billings.
Get your clients together as often as you can. Positive group dynamics occur when clients get together with your staff. An annual reception, seminar, open house or party will prove beneficial. Firms that have annual client seminars — whether or not there’s a major tax change — are the ones that foster client loyalty.
Many things can be done to improve the quality of your relationship with your clients. The key is to get started, if you haven’t already.
Troy A. Waugh, CPA, MBA, is the founder and principal of Waugh & Co., a consulting, marketing and training concern. Angie T. Grissom is a senior consultant at Waugh & Co.
