According to the AICPA, the most significant challenge facing CPA firms of all sizes across the nation today is gaining new clients. But too many firms overlook the low-hanging fruit of their existing client bases.
It starts with asking the right questions. In fact, we’ve found over and over again that:
- Most firms do not know why they are hired or why clients fire them.
- The reason most firms do not know why they are hired or fired is that they do not ask.
- What they think they know is wrong, because they do not analyze it.
Customer loyalty leads to increased revenues and profits. This is not a secret. SevenKeys CPA research shows, in fact, that increased customer loyalty drives revenue growth by up to 20 percent.
Many business experts are convinced most firms can increase wallet share from existing clients by 10 or 20 percent.
Another study indicates that for most large companies (not just accounting firms) up to 95 percent of profits come from long-term customers.
So it’s easy to see that many a CPA firm could benefit from examining their client list and ensure that you know the tenure you enjoy with your clients. And then build plans and processes to ensure that you are paying special attention to those clients who have been on board with you for a long time.
You certainly know that it costs more to acquire a new client than to retain one. But do you know how much more it costs? You can do the math: add together marketing costs, networking costs, sales costs, and then monetize the time and effort invested by everyone involved in bringing in the client. Now calculate the amount of money you lose when you start up with a new client.
Once you quantify all of the costs and compare to the revenue earned working with existing clients, it is easy to see that the easiest new profits come not from new clients, but old.