Seven Keys

In our relentless pursuit of mutually satisfying CPA-Client relationships, the Seven Keys to Successful CPA Firm Management has asked over 3,000 clients and practitioners what clients really want.

The responses indicate a general, if not unanimous, consensus: Clients want service. Lots of it. Now. And it better be good. And heartfelt. And cheap.

“They want someone who will take a personal interest in learning their business and help guide/coach them through the turbulent times,” says one head of a small CPA firm in Houston. “Be proactive and help them save money on taxes and other costs of operation.”

That CPA crammed a lot of common feelings into that response. We’re finding clients and CPAs alike calling for much the same: CPAs who care, who do more than audit or prep taxes, who are proactively involved in keeping clients updated and duly informed, all at a price that clients tended to call “reasonable” and CPAs tended to call “cheap.”

But something else came up a lot, something we’d think was both reasonable and cheap, not to mention easy, but apparently it’s been widely lacking: communication.

“They want someone who will take their phone call, who will listen to them on the phone and will make time for them,” said the president of small financial consulting firm in Redding, Conn. “They want to be understood.”

Indeed, “cheap” came up quite a bit. But the all-too-human urge that creates a demand for cheap beer, cheap cars, and cheap clothes doesn’t necessarily extend to audits and accounting services.

The owner of a small firm in Phoenix, Ariz., has apparently been dealing with clients who are even more demanding. They want “cheap service of the highest quality available,” he says.

Is that asking too much? Well, maybe…

“Price, Service, Quality — pick two!” said one CEO of a smallish client company.

But a partner at a two-partner accounting firm in Boca Raton, Fla., sees clients having more reasonable requests.
“Clients want accountants who are knowledgeable and respond to their questions in a timely fashion,” he says, “while not being charged for every little item.”

On the client side, a senior staffer of a governmental agency in Indianapolis, Ind., sees a need for C.Y.A. CPA services. He says clients want “not to have to worry about service being provided. They want to know that it is done and there is nothing that will come back to haunt them.”

The idea of “avoiding trouble” comes up in quite a few responses, but overall, clients are looking for real help in running their businesses.

One client-side CFO seems to say it all: “Clients want guidance. They don’t need their CPA to be a guru in their business, but they expect their CPA to take an active interest in their business.

Being willing to listen and learn the business is important. Clients want sound advice when it’s given, and they want to know what the numbers mean. They want accuracy and the confidence in knowing what they hire their CPA for will be done right.”

That says a lot, maybe even most of what any decent practitioner needs to know. It could also be a list of what a client might expect from an accountant.

We notice that price isn’t mentioned much by clients. Apparently some things are priceless. Solid service may be one of them.

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:

1. Most firms do not know why they are hired or why clients fire them.
2. The reason most firms do not know why they are hired or fired is that they do not ask.
3. 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.

Looking specifically at the accounting profession, a five percent improvement in client retention can improve profits by 25 to 85 percent.

This kind of revenue growth adds directly to your bottom line.

What more compelling argument do you need to demonstrate the benefit of improving your firm’s ability to retain your clients?

Accountants already have a head start in client satisfaction. Accountants rank highest among all of the professions.

Further, if we add together those who are very satisfied and those who are somewhat satisfied, studies indicate that over 90 percent of accounting clients are satisfied with the service they receive.

Regardless of the level of client satisfaction in accounting clients, there are clear gaps between the thinking of accountants and their clients.

CPAs cannot afford to take the data as a justification for complacency.

No CPA firm can afford to take clients for granted – ever.

SevenKeys CPA studies conducted by The Bay Street Group and Capstone Marketing illuminate several very significant gaps between the opinions of clients and their CPAs. These studies allow us to begin to understand what our clients really think.

One-fourth of clients surveyed say they’d leave their current CPA firm because it might not have the new or different services that the client needs.

Only about 15 percent of CPAs seem to be aware of the danger. Although only 7 percent of clients surveyed cite personal friendship with a new CPA as a reason to switch firms, 17 percent of CPAs think it’s an important reason for a change of firm. Clearly, this is less important than CPAs think.

CPAs need to be doing more to listen to client needs and to anticipate their need for new and different services. Then they need to develop and deliver those new or different services.

CPAs should focus less on personal issues and concern themselves with business issues. This focus will enable them to understand better the needs of their clients and provide the services and the attentiveness to their needs that drives customer loyalty.

Being proactive with clients is another very important gap in the perception of CPAs. While 40 percent of the clients surveyed list proactivity as a reason to change firms, only 15 percent of CPAs understood how important this is to their clients. Clearly, clients want their CPAs to take the lead and become more proactive in anticipating their needs and preparing themselves to meet the needs as they emerge.

CPAs should be proactive in notifying clients of important legal or tax code changes that affect them. CPAs should be more proactive in anticipating and providing new and different services to meet the emerging needs of their clients as their business changes.

Significant gaps exist between what clients really think and what CPAs believe is important to their clients. These gaps indicate a need for CPAs to revise their thinking. They also indicate opportunities for CPA firms to make changes that will improve client satisfaction and retention.

Most CPAs get it wrong. Clients’ No. 1 reason for dumping a CPA firm is not price.

It’s “poor client service, inattentiveness,” according to seven in 10 clients surveyed by Seven Keys to Successful CPA Firm Management.To be sure, there is price sensitivity. Six in ten clients indicate “price, fees, costs, budgets” as a reason to change CPA firms.

But when the question is posed to CPAs in public accounting, the CPAs rank client service and attentiveness third. Only one in four CPAs admit that they might lose clients because of poor client service or not paying attention to them.

CPAs believe pricing to be the main reason clients change CPA firms. The loss of these clients will be passed off with a comment like “our services became too expensive for them.”

The second reason CPAs chose was a major change in the company: “they die, sell or go out of business.” While any firm might lose one or two clients due to a major change in the business or the business folding, this is not an issue CPA firms can control. Pricing also might be an issue that would drive clients away from a firm. Nevertheless, the leading reason clients would leave is client service.