Much has been written about firm succession issues and the effect of impending Baby Boomer retirements on the accounting profession as it relates to firm leadership and the financial sustainability of the practice. We’ve seen many firms examining the internal impact of this generational transition and creating plans to address the inevitable changes facing their firms in the next five years. But there is an overlooked aspect of the Baby Boomers’ departure from the workforce that will have as great a bearing on your firm’s future.

Your clients are going through the same transition.

It’s no secret that the effect of these retirements isn’t limited to the accounting profession. According to AARP, 10,000 Baby Boomers turn 65 every day. However, in my experience most accounting firms have given little thought to what this transitioning of client leaders means for the future of their relationship with those clients. One of the biggest mistakes accounting firm leaders can make in this area is to assume that what they deliver now — and how they deliver it — is what the next generation of client leaders wants. How do you evolve your firm to be the one that delivers what the next generation of business owners wants? And what does that look like?

The first thing to acknowledge is that the next generation of owners is not the millennials (defined as the generation of individuals born between 1981 and 1997). Because there has been so much publicized about the differences between boomers and millennials, and because millennials make up the largest segment of today’s workforce, people often think of “next generation” as the millennials. But in our surveys of CPA firm clients, the transition of ownership taking place is landing with Generation X – the group of leaders born between 1965 and 1980. There is fascination and fear about millennials taking over clients’ businesses, but the truth of the matter is that Generation X is next in line.


Understanding your next-gen clients

Generation X grew up largely in two-income households, amid rising divorce rates. And with many women entering the workforce during their childhoods, the “latch-key” generation emerged. The result is a generation of independent and resourceful people more skeptical and questioning than the previous generation. They also value flexibility and freedom and were the first generation of work-life balance-seekers.

So what do those Generation X clients want from their accounting firm? And what does that mean for the future of your relationship with them? As with any generational group, not all these will apply to everyone. Nothing replaces asking questions and really getting to know your client. But when you are still working to deepen the relationship, the following may shed some light on what your next generation of clients is likely to value:

1. Generation X is more skeptical than the Boomer generation. As a result, your next generation of clients may more assertively push back on your ideas (versus simply adopting or ignoring them), but don’t take that as a negative. They want you to convince them. Be ready to back up your ideas or recommendations with quantifiable benefits or anticipate clients’ pushback with statements like “If I were you, I’d want to know … .” This may take some training and advance preparation.
2. They use technology as a way to work more productively, but also like in-person and voice-to-voice communication as long as it adds value. When engaging with your next-generation clients, be sure to state a clear purpose for your conversation, and what your client will get as a result. Talk about ways in which your solutions will make them more productive, and highlight tools you use during the engagement to be more productive.
3. Generation X has been taught to question. Don’t assume because you had a 15-year relationship with the previous owner that the next owner will accept the status quo. Be proactive in aligning your delivery with the things that are most important to the next owner. Learn what this next generation wants from the relationship by asking questions. A formal or informal survey of what your clients value in the relationship can be a great starting point. Be prepared for a dialog about value, and again, don’t be discouraged or offended by questions.
4. They appreciate flexibility. Because they like and use technology, you can use it to facilitate discussions and develop a relationship in a manner that is most convenient for your client. Your firm should adopt and use video conferencing and/or webinar software if it hasn’t already to give your next-generation of clients as many options as possible to communicate with you.
5. Generation X clients value efficiency and hard work, and their expectations are high. They expect you to exceed expectations. Your client service process should include continual reviews and communication of the extra things your firm does in the course of delivering services and the value those things create. To be successful with the next generation of owners, you’ll need to be adept at articulating and confident in communicating those extras. Don’t assume your clients will recognize them on their own.
6. They value authenticity, and they are looking for cues that you are genuine. Sometimes CPAs have a misperception that they have to change who they are when they are with clients or prospects (they have to “put on their sales hat,” so to speak). Just be helpful and be yourself. Ask questions. Keep conversations honest and open. Admit when you don’t know the answer to something, but commit to finding the answer and following up. This is how you will build trust and demonstrate the kind of authentic personality that your next-generation clients will value.
7. Generation X clients value family. They are the “work to live” generation, and will show interest in how you as their advisor can help them do that more effectively. And be sure to pay attention to this aspect of developing a relationship – take an interest in their family and share sincerely about yourself when asked.


What to do now to sustain relationships in the future

Many of these ideas and behaviors can be implemented before your clients’ transition happens. Here are some things you can begin to focus on now to help sustain client relationships as their leadership transitions.

1. Identify and get to know your clients’ next generation. This is a perfect opportunity to take along one of your firm’s next-generation leaders as well to make an introduction. Remember, this group will want an agenda and a value proposition for this meeting – so do some advanced planning to create one or two objectives that add value to the client.
2. Implement training for everyone in the firm on how to talk about the benefits of what you do, why clients need your services and creating a value proposition. And as your firm begins to diversify from compliance to advisory-based services, consider how your expertise can be applied in advising clients on improving their productivity.
3. Ask your next-generation clients what they want from your relationship (not the services they need, but the attributes of the relationship). Schedule a meeting to discuss this item specifically with a stated objective of wanting to understand what is most important to them so you can better deliver value. Follow through by defining the specific behaviors of delivering those attributes and communicate those to everyone on the team.
4. Offer flexibility in how you meet with clients, and adapt to what they want. Embrace technology tools that enable you and your client to communicate in whatever way is most convenient. Periodically encourage in-person meetings for complex or sensitive issues, and relationship-building activities such as needs assessment meetings. Inquire about touring the client’s facility as a means of learning more about their operations in order to offer valuable advice on areas not directly related to the engagement.
5. Encourage a culture of learning inside the firm. Empower your professionals to ask questions, teach them how to ask the right questions and tell them what to do with the information they learn. Remind them they don’t have to know all the answers, but they should be prepared to follow through on finding the answers or introducing a resource.
6. Reinforce the mindset of being helpful and being genuine. Offer guidance, in the form of training, on professionalism and communication skills and inspire your people to be the best version of themselves. And care enough about your people to offer them compassionate yet constructive advice when their personal behaviors are deterring them from professional advancement.

Your clients’ leadership transitions, while holding some risk, also represent a tremendous opportunity to recommit to client service and take the lead on delivering service that truly offers the next generation of leaders what they want from their accounting firm. Understanding what Generation X leaders want is imperative to delivering what they value. The generalities will provide some direction in getting started, but ultimately conversations with your clients will offer the best insight into adapting your service delivery to what is most important to your clients.

Carrie Steffen

Carrie Steffen

Carrie Steffen is a founding shareholder and president of The Whetstone Group Inc., which provides growth consulting services to CPA firms and other professional service firms.