One of my roles when I was in practice was speaking to clients who had requested to leave. It can cost up to 25 times more to acquire a new client than retain an existing one which is a staggering statistic when looking at Cost Of Acquisition (CAQ). These conversations were incredibly insightful as to why a client would choose to change practice and the monthly churn report was something that was deliberated over constantly. We’ve all had those clients that we don’t gel with; in fact, speaking recently to a client, part of their strategy for the FY24 was to ‘cull’ the poor fit clients. So, how do you stop attracting the poor fit clients and how do you retain those you thought were a good fit?
Understanding the reason for leaving is crucial in devising strategies to retain them. Here are some common reasons why clients might part ways with their accounting firm and what can be done to mitigate these issues:
Perceived (or actual) lack of Communication: One of the primary reasons clients leave is a breakdown in communication. I would often hear, ‘ I want you to be more proactive’ but what does that actually mean? Digging deeper it meant ‘I want to know where I am in the process’ ie. they are not being ‘neglected’ or ignored and can reach their accountant when needed.
Solution: Improve communication channels. Automation can be key here for standard client comms but also by setting clear expectations for response times, providing multiple points of contact (we utilise a pod structure), and regularly updating clients on their financial status or any relevant changes in regulations that may impact them, can change this perception. Up to date websites and accessible updates (think blogs, newsletters, social media posts) are not only a nice to have but a necessity in today’s business world.
Poor Service Quality: Clients expect accuracy, efficiency, and professionalism from their accounting firm. Any lapses in delivering high-quality service, such as missed deadlines or errors in financial reports, can erode trust and prompt clients to seek alternatives.
Solution: Implement processes, procedures and quality control measures to ensure accuracy and reliability in your work. Invest in tech to do some of the heavy lifting as well as ongoing training and professional development for your staff to stay updated on industry best practices and regulations. Conduct regular client satisfaction surveys (both CSAT and NPS) to gather feedback and address any areas for improvement proactively.
Incompatibility or Misalignment: Sometimes, clients may outgrow their current accounting firm or find that their needs no longer align with the services offered. This could be due to changes in business size, industry specialisation, or geographical location.
Solution: Continuously assess your client’s evolving needs. Tailoring your services may not be an option for the outlier client but if it is a regular request, consider your business strategy. Maintaining open lines of communication to understand their goals and challenges, and proactively suggest solutions to address them if possible can create further trust and aid retention. Using Plugin Accountant’s Tax Admin App is one such example, opening up the opportunity for more advisory conversations rather than simple compliance.
Price Sensitivity: Clients may be price-sensitive and seek alternative options if they perceive that they can get similar services at a lower cost elsewhere. This is particularly true for small businesses and startups operating on tight budgets.
Solution: Clearly articulate the value proposition of your services and demonstrate how your expertise and personalised approach outweigh any cost differentials. Consider offering flexible pricing and payment options or value-added services to justify your fees and enhance the overall client experience. Cheapest is not always best.
Lack of Relationship Building: Building strong, trust-based relationships is essential for client retention. Clients are more likely to stay loyal to a firm where they feel valued, understood, and supported. The traditional expectation that accountants aren’t people people, they are number people, has been long thrown out.
Solution:
- leverage technology: automation and client notifications show the firm is progressive and client-focused
- personalise the relationship: CRMs are vital to get information out of an accountants head and into a company-wide resource
- educate clients via blog posts, educational events, webinars and regular newsletters
- ask for feedback: automation via a CRM is great for this and there are lot of cost-effective feedback tools in the market
- be transparent with billing
- build a team approach (refer to pod structure above)
- show appreciation – it doesn’t need to be flash but a personalised acknowledgement can go a long way
By addressing these common reasons for client attrition and implementing proactive strategies to enhance client satisfaction and loyalty, accounting firms can minimise client turnover and foster sustainable growth and success.
Author: Beth Aldridge
A client service superstar with over 30 years of building relationships and maintaining client satisfaction.
