Clients Know What They Want. Do You?

Significant gaps exist between what clients really think and what CPAs seem to 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.

For instance, there’s clear gap between client sentiment and CPA firm perception relates to the importance of the firm providing new or different services.

One-fourth of the clients surveyed cited a need for additional services as a reason to leave a CPA firm. Yet only 15 percent of CPA firms recognize the importance of new services.

Although only seven percent of clients surveyed cited personal friendship with a new CPA as a reason to switch firms, 17 percent of CPAs thought this was 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 listed a lack of pro-active advice as a reason to change firms, only 15 percent of CPAs seem to understand 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:

1. be proactive in notifying clients of important legal or tax code changes that affect them, and

2. be more proactive in anticipating and providing new and different services to meet the emerging needs of their clients as their business changes.

The Real Reason CPAs Lose Clients

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.

Clearly, CPA firms need to pay as much attention to client service as to pricing.

How Many of Your Clients Would Recommend You? Probably Not as Many as You Think.

There is a huge gap between client attitudes and CPA perception of those attitudes, according to our research.

We’ve been asking two questions to two difference groups of people.

  1. We ask clients “how likely are you to recommend your CPA firm?” and
  2. We ask CPAs “how likely are your clients to recommend you?”

About three in four accountants say all or most of their clients would make good referral sources. Why the accountants aren’t using them as referral sources is a whole other story. But, read on, they may, in fact be doing themselves a favor.

Here’s the shocker: only one in four clients tell us they are “highly likely” to recommend their current CPA firm. And there are signs that the Great Recession is undermining even that low number.

To us, most CPAs seem far too confident about the recommendation power of their clients. That’s is a critical misunderstanding .

Most firms gain a significant portion of their new clients through referrals. Firms depending upon referrals as the basis of a growth strategy or marketing plan might miss their referral goals.

At the same time, roughly eight in ten accountants have no organized referral program in place. Such a program would be likely to uncover the reluctance of their current clients to recommend them. If they do not understand that their clients would not refer them, they clearly don’t know what they’re doing wrong or how to fix it. It’s like driving blind, backwards, while singing to the radio.

Clients unwilling to refer their friends, colleagues and associates to their accounting firm are likely to be unhappy in some important way.

If you’re betting that most of your clients are happy, you’re risking a lot. Can you afford it?

11 Clues a Client is a Loser and 4 Keys to Finding a Winner

Every CPA firm has clients who are no longer a good fit – clients with little growth potential, clients who are slow to pay, clients who treat CPAs poorly.  Bad clients have an impact on profits, productivity, and staffing.  The leading firms are doing something about this.  Our research shows that SevenKeys Leaders are nearly three times more likely than SevenKeys Laggards to fire clients that don’t fit their target.

Firing clients is an effective way to manage growth and profitability.

Evaluate clients on a variety of criteria including:

  1. Fee
  2. Realization
  3. Ability to pay
  4. Year-end
  5. Opportunities to cross-sell
  6. Growth potential
  7. Risk
  8. Leads received (or expected) from client
  9. Does the client enable our firm to establish or build a niche?
  10. Does the client need our firm’s expertise?
  11. Can our firm still serve the client to the best of its ability?

Then determine whether you can increase the fee or refer the client to another firm.  Firms that implement this process on an annual basis are more profitable, focus on their best clients, and have a happier staff.

Yet most firms are more likely to accept inappropriate clients and fire them in the future than they are not to accept them in the first place.  A formal client acceptance process, utilizing the criteria listed above, would help prevent clients from passing through the revolving door.

Establish client acceptance criteria.   Assign a gatekeeper, your firm’s marketing professional, for example, who will track the types of opportunities partners are working on by asking strategic questions:

  1. Does an engagement support a particular niche within the firm?
  2. Are there opportunities for cross selling?
  3. Does the client have a good payment history?
  4. Could we fire an inappropriate client and take on one that is a better fit for the firm?

Do not inform clients that they are being “fired” by mail.  Depending upon the length of time they have been a client or fees paid consider a face-to-face meeting or a telephone call.  This also gives you the opportunity to remedy the situation and keep the client

4 Keys to Winning the Competitive Battles in Accounting

Organizations with strong learning cultures have 37 percent greater employee productivity, are 32 percent more likely to be first to market and are 17 percent more likely to be market leaders in their segment, according to Bersin & Associates’ 2010 study High Impact Learning Culture.

The same research shows that most companies do not understand this area well, despite the opportunity to drive tremendous performance improvements with almost no additional expense.

Among accounting firms, less than 1 in 4 CPAs say they get the training they need, according research conducted for the Seven Keys to Successful CPA Firm Management. (Click here to download the free executive summary.

And yet, when we separate the leading firms from the laggards, based on their performance in achieving their chosen goals, we find stark differences.

SevenKeys CPA Leaders are:
1.     Three times more likely than laggards to conduct training that their people need;
2.     Three times more likely to conduct training that supports personal goals;
3.     Two and one-half times more likely to conduct training that their people want; and
4.     Three times more likely to conduct training that supports their business strategy.

The challenge is that in many firms, the learning culture isn’t “owned” by any one person or department — not the CPE coordinator, not HR, not a specific partner.

And it’s not just about CPE. A great learning culture fosters creative and dynamic knowledge sharing across rank and silo. In the end, a great learning culture creates a far more competitive firm.

Who’s taking ownership at your firm for creating an agile, competitive learning organization?

SevenKeys Pinpoints Three Marketing Hallmarks of Leading Firms

New research Seven Keys to Successful CPA Firm Management program isolates at least three defining characteristics of peak performing accounting firms.

The research results, unveiled in a two-hour workshop, show that so-called SevenKeys Leaders are:

  • 19 times more likely than lagging firms to grow revenue faster than most competitors.
  • 14 times more likely to be more profitable than most competitors, and
  • 11 times more likely to be satisfied with their firm’s performance in marketing and business development.

The new research findings also reveal the winning strategies and tactics deployed by the leading firms.

At the top of the list for SevenKeys Leaders:

  • Networking,
  • social media and
  • blogging, public speaking, and
  • website upgrades.

Workshop attendees get the full survey results, apply the new benchmarks to their own practices using self-assessment scoresheets, and use a specially designed workbook to lay out action plans.

Overall, the data seem to show that firms are narrowing their marketing efforts while generally increasing overall activity.

New Research Reveals the Secrets of Highly Successful Accounting Firms

Click here for the free Executive Summary of Research Findings

In this newly competitive environment, the difference between success and failure can pivot on the smallest competitive advantages.

Fortunately, through the Seven Keys to Successful CPA Firm Management program, we may have learned a few things about what separates the winners from the losers, the high performing firms from the also-rans – what we call: the Seven Keys Leaders and the Laggards. And, so far, we’re gratified that hundreds of practitioners seem to agree.

Our research shows, for instance, seven important take-aways accounting firms can use today:

  1. Values matter — SevenKeys CPA Leaders are 3 times more likely than lagging firms to adhere to a clear set of values.
  2. Written plans are essential — SevenKeys CPA Leaders are 17 times more likely to follow a strategic technology plan than Laggards.
  3. Focus wins — SevenKeys CPA Leaders are about twice as likely as Laggards to focus on a few key market niches and specialties.
  4. Client satisfaction isn’t an accident — SevenKeys CPA Leaders are twice as likely than Laggards to operate from a formal program to monitor client satisfaction.
  5. Success doesn’t happen alone — It takes a team. SevenKeys CPA Leaders are 4 times more likely than Laggards to work as a team, not as individuals.
  6. CPE is a competitive advantage — SevenKeys CPA Leaders are 3 times more likely than Laggards to conduct training that supports the firm’s business strategy.
  7. Goals are serious — SevenKeys CPA Leaders are 10 times more likely than Laggards to impose specific and measurable business goals.

In fact, our research shows that SevenKeys CPA Leaders are 19 times more likely to be growing revenue faster than low-performing, Laggard, firms. And they are four times more likely to be able to pass along price increases.

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