Accounting firms continue to feel the pinch of the Great Resignation. The dramatic disappearance of team members and the slow trickle of qualified candidates to replace them is a trend that continues to impact our profession.
Citing issues from work-life balance to lack of clear expectations, pay and benefits, and career development, thousands of accountants and auditors have left the field in just over two years, despite heavy demand for our services. And the number of interested college students cannot keep up.
I am among those who have staunchly advocated strategic pruning as a way to meet the needs of deserving, productive clients in view of serious HR challenges. The notion of a sacrosanct client list that can never be touched has outlived its value. My recommendation is mindful, ongoing pruning that targets your least profitable and/or least strategic service lines and industries. Culling the client list is one tactic in a portfolio that may also include increased pricing, offshoring, processing centers and technology.
Land and expand
When presented with this recommendation, my clients often express concern that pruning runs counter to the goal of driving the top line. Why cut, they wonder, when compensation will be impacted, and when there's no guarantee of replacing hard-earned revenue?
This is when I sit them down and explain the way to gain the needed confidence to move forward. It's called the Key Client Program, an approach we used in the business development team at IBM. This initiative is based on the premise that 80% of revenue typically comes from 20% of clients.
The program centers on identifying undiscovered potential from top clients as you weed out those with far less potential. This could lead, for example, to a multi-thousand-dollar opportunity with a favored client that you could not have seen had your path been strewn with one-off-engagement clients, the type for whom you prepare an annual 1040 and nothing else.
A Key Client Program is an institutionalized process. For a midsized firm, for example, a productive cadence could be achieved by devoting one day per quarter to strategically reviewing eight to 10 clients, or about 40 per year. It involves a one-page summary, prepared by the partner leader, laying out the client's organization chart, brief history, major strategies and relationship dynamics with our firm. What follows is brainstorming around relationship expansion and associated revenue potential. Clients "at risk" are reviewed as well, to enable shoring up the client experience.
I recommend that each key client that is identified has an executive sponsor, who is a firm leader (think CFO, COO or CHRO) not directly involved with the client. This enables you to break through to top C-level people, instead of being stuck with only one advocate and point of view regarding the strategic direction and related needs across the company. It expands the relationship to the entity-to-entity level, a very powerful approach indeed.
Select a partner leader to run the Key Client Program — one who is especially known for developing their own clients. The starting point is putting a defined fence around this client group, analyzing the revenue and projected year-over-year revenue growth goals from the clients as a group. Then start down the road creating/executing a program for achievement. Some thoughts:
- Executive sponsor: An annual/semiannual visit on the top C-person/people to hear about strategic direction and possible collaboration.
- Exclusive opportunities: Such as advantaged pricing, attendance at special events and participation in early adopter programs.
- Strengthen firm ties: Not only involvement by the executive sponsor, but your industry and advisory services leaders and others. Invite the client to have a session with your staff about issues in their industry. Create an advisory council of two to three clients who are within your industry or service line. Host occasional advisory lunches that draw on their perspectives. Have them present at a partner meeting or a client event.
By the way, this last point was the major reason we won a multimillion-dollar contract in a highly competitive situation, because we discovered the decision-maker was motivated to be a thought leader in his profession and was honored to speak at our client events.
My hydrangea
I've written before about my beloved, overgrown hydrangea bush, the one I could never bear to prune — the one my husband continued to notice with its barren condition! For too long, I couldn't bring myself to trim it back. How could less be more of something I so loved?
Yet once I found the courage to remove the dry, dead growth, the plant began to flourish, soaking up light and moisture where it was needed most, unrestricted by tangled vines and branches. It began to do more than live; it began to thrive. So, too, will your firm rise to the light.
Dare to prune, and dare to invest in a process that will fuel that growth in ways you never imagined.
