Meeting the challenge of client retention

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Although there have recently been promising signs of an economic recovery, the challenge of retaining clients continues. As economic conditions slowly improve, accountants need to challenge themselves to reconsider how client retention strategies should be incorporated into their overall client service models.

Client retention strategies should be employed year-round to cultivate healthy, profitable and long-lasting relationships. In order to be effective, these strategies must become a deeply ingrained aspect of the firm's culture, not a one-time initiative or something that can be dismissed as a fad or management "flavor of the month." Beyond price concessions, accounting firms should focus their time, energy and attention on the real issues of client retention, even though there are many approaches firms can take that are easy to implement and highly effective.

Ignoring client retention issues or treating them as short-term initiatives that can be abandoned as soon as the economy picks up again can be a serious mistake.

A critical first step in this process is to clearly define what type of client service experience your firm is striving to create. From the initial contact with a prospective client, through the proposal process, during compliance engagements and then throughout the balance of the year, firms need to pay close attention to fully integrating their desired client service experience. This must encompass the interactions that clients have with everyone at the firm, from the receptionist to the accounting professionals to the administrative staff. Everyone at the firm contributes to the client service experience, and it's important for each person to feel invested and part of the team.

As part of that experience, firms need to carefully assess their client segmentation and then determine the best way to deliver appropriate client services. Back when the economy was good, most accountants only had to hang out a shingle in order to find clients. But that was then - now, it's more important than ever for accountants to decide what client segments and industries they want to service. It may seem like a great idea to attract a client in a growth industry such as wind power, but it makes much more sense to thoughtfully and strategically add several clients in that industry or segment, as well as some in adjacent industries. This allows you to leverage your experience and expertise.


Some accountants may take the opposite point of view and eagerly take any client who walks through the door. But in order to fully serve and retain the most profitable clients, accountants need to understand which clients they most want to keep. Do they want to focus their time and attention on individual clients who need their 1040 federal tax forms filed once a year, or do they want to target $250 million manufacturing clients? It's very difficult for one partner, and all but the largest firms, to effectively serve every segment of the market.

Once they have determined their client focus, accountants need to actively reach out to those clients to measure satisfaction, identify additional needs and educate them on other service capabilities.


There are several strategies that accountants should consider when it comes to client retention, including:

*Obtain client feedback to understand needs. Accountants often ignore one very important aspect of client retention - client service interviews and surveys. You may assume that clients are satisfied with your services because they keep coming back. But often, clients don't complain when they have problems or concerns. Instead, they will just find someone else to do the job.

By proactively reaching out to clients and specifically asking them about their needs and how you and your firm can better meet those needs, you can ensure that your current clients remain on board. Unless you incorporate a system of soliciting and obtaining feedback, your strategy to retain clients becomes one of hope.

If you don't have a client service interview program in place, developing one is not complicated. You can start by contacting your most longstanding, valuable or profitable clients and arranging a face-to-face meeting with them. During the meeting, you should specifically ask them how you are doing, what you can do to improve your services and what their greatest concerns are regarding the work you do for them. Ask them about their other needs and their fears - what is keeping them up at night, and how you can help them sleep better.

Once the meeting is complete, follow-up is critical. If a client identifies a problem, you need to address that issue immediately. Otherwise, clients may feel that you have wasted their time and that their concerns do not really matter to you.

Client service interviews can be time-consuming, and it may be difficult for you to meet with all of your clients initially. Instead, consider selecting and interviewing a few clients. You don't want to bite off more than you can chew. Once you have developed the right processes and mechanisms for client interviews, you can widen the program to eventually include the rest of your clients.

If you don't have time to visit each client personally, you can revisit or initiate client satisfaction surveys. With a relatively brief, simple phone or online survey, you can gain valuable feedback while showing your clients that their concerns are important to you.

There are two main categories of surveys you can use. Engagement surveys are generally sent out shortly after a project is completed to see how the client feels you did on an audit, tax return, special project, etc. The annual check-up offers an opportunity to interact with clients about how the client service experience has met with your value proposition. These conversations and surveys can help you and your firm "sharpen the saw" on your technical capabilities and explore gaps you may have with existing clients. Once you understand your client needs, you can bridge those gaps.

*Re-assess service offerings. Through your conversations with clients, specifically ask them how your services align with their needs. Based on the content of those conversations, you may need to expand the types of services you offer or shift clients among your partners. For example, some accounting firms may have six different clients who run car dealerships, and those six clients are served by several different partners. In these types of situations, the firm's industry experience may be broad but it is not deep. It often makes more sense to have one or two partners manage the clients with dealerships so they can develop a rich understanding of that business. The other partners will then be free to focus their expertise elsewhere.

Under the same circumstances, it may make sense to actually exit some business segments and industries that could be placing unreasonable demands on your time and resources. Drilling down in some areas while abandoning others can help you focus your expertise and your efforts, rather than having relaxed practices that fail to serve any client base effectively.

*Consider service bundling. Many accountants shy away from the idea of lowering fees or discounting services as a way to retain clients. While simply cutting rates may not be the answer, there are creative ways to work with clients to address their financial concerns and pressures while staying competitive. Consider adding value or bundling services by initiating proactive advisory conversations. For example, if you provide wealth management services for a client, offer individual tax compliance services at no extra charge. Or offer your clients a planning meeting, where you will meet with them for free to review their current strategies.

Firms can also consider providing a discount for clients who offer a longer-term commitment. For example, rather than reducing fees by 10 percent, the accounting firm can offer a 10 percent reduction with a signed commitment that the firm will be retained for a two- or three-year period. These contracts can be written to include cost-of-living increases, so you are not saddled with fixed rates for years at a time.

*Increase interaction. Do your clients only think about you during tax time? If so, you need to proactively reach out to them in meaningful ways. Don't just send generic e-mail blasts that are easy to delete and may just be an annoyance. Instead, communicate with clients in ways that are convenient and useful to them; during your client surveys and interviews, be sure to ask how they prefer to receive such communications.

Reaching out to clients quickly about critical developments in their industries can save them time while establishing you and your partners as thought leaders who bring valuable expertise and partnering skills, rather than just the accountants.

These types of value-add situations can also give you the opportunity to educate clients about all of your service offerings. It may be that your firm has an area of expertise that your clients could benefit from, but they didn't know you offered.

Firms should also consider how they can use technology to change the way they communicate with clients. With Web portals, firms can reduce the number of e-mails they send to clients, while creating more frequent and regular interaction to develop closer ties with clients, which helps with retention.

At the low-tech end, one firm stresses the importance of hand-written thank-you notes after projects and engagements. Sometimes they will even send a tin of popcorn when the client is going through a challenging time. This firm's professionals will also take larger clients out to lunch, while pointedly talking about anything but business.

No matter what type of approach you use, client communications should be about keeping you in the minds of clients. In order to do so, you should consider a mix of ideas and appreciative gestures.

*Adopt a team approach. Although the historical model where all information and communication flows through the partner continues to be effective in some situations and certainly in smaller firms, as client situations become more complex, firms should consider adopting a team approach in engagements. By developing a team approach, accounting firms can ensure that someone is always available to the client as a familiar face, who knows about the client's issues and the way the client does business.

To encourage a team approach, firms have incorporated annual and semi-annual meetings involving some clients that are preceded by an internal, cross-functional team meeting that includes partners and staff. Meetings like these help firms to better identify client needs and offer solutions that fit. Moreover, they engage more of your staff who see client opportunities and issues from different perspectives.

Regardless of the state of the economy, client retention strategies should be top of mind for accountants. Because if you don't know about the best ways to keep your clients satisfied and help provide them with solutions to manage their businesses, one of your competitors certainly will.

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