A Conversation With Allan Boress: Why Clients Leave CPA Firms

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The year is almost over and it's a good time to reflect on what happened. Did some clients not return this year? Do you know why they really didn't come back?

Every two years we conduct a study of about two hundred clients of CPA firms all over the US and Canada. It includes responses of all kinds of clients of all sized accounting firms.


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The purpose of this inquiry is to find out why clients have left their previous CPA firm and why they stay with their current one. The end result being information I can pass on to my students, CPA firm clients and readers so that they don't make the mistakes that lose clients, and to improve existing client relationships before they reach the danger point.

Ask a CPA ...

If you ask most accountants why they believe clients leave you'll hear "Fees!", or "Timeliness", or some technically related item.

Truth is that most people are taught how to fib by their parents, in order not to hurt another's feelings. Think about it we rarely tell others the real reasons why we end a relationship. I recently caught my wife teaching this to our teen aged daughter: "Honey, don't tell Johnny you don't want to go out with him because he smells funny! Tell him you've already got a boyfriend."

And so it happens even to us in order to avoid conflicts when the client relationship ends or the sale is lost, if the CPA even bothers to ask, that is. The response many clients will tell them is "Fees," which the CPA readily accepts. Of course, sometimes the client thinks the reason for ending the relationship is fees as well. But what I've learned in nineteen years of being a CPA and fifteen years as a consultant to our profession, is that fee problems are a symptom, rather than the real problem.

The interviews conducted for this article were intended to go beyond the obvious, to the real reasons people leave and stay. Only by knowing the problems and the real concerns, can we focus on fixing the right areas.

Why clients actually leave

In order of reception and importance:

"Lack of communication, including lack of timeliness and lack of responsiveness"

This is the number one reason clients leave CPA firms according to this study, yet communication is one of the many subjects that should be taught in the schools of accountancy in this country, but isn't.

In many firms, communicating with the client is frowned upon as being unnecessary. And often there is the general fear that not every minute of time can be charged to the client for talking to them, so it is therefore not good to talk to the client.

Some ex-clients said that they would have liked to have had their return or financial statements explained to them. Or they said that they would have valued speaking directly to the person who was their original contact with the firm. Many mentioned waiting an inordinate amount of time to getting phone calls returned under this topic.

A woman approached me last year while I was conducting a client relationship management program for the Indiana Society. She wanted to know why the partners yelled at her every time they saw her talking on the phone to the clients. "What am I supposed to do?" she asked. "Hang up when they call me?"

There is no doubt that today's client is more sophisticated and demanding than ever. And these clients want more, in many cases but not all, than the detached emotional relationships most CPAs insist on having with their clients under the guise of "independence" and this mistaken notion that is isn't necessary to be a successful CPA.

Indifference by the Service Provider

Have you ever noticed that most people who take care of you, whether it be in a supermarket, hotel, restaurant, gas station, doctor’s office – really couldn’t care less if you were there or not?

Recently, I found a new copy place new my office. Much more convenient than fighting the traffic and the other customers at the local big box office supply joint. And this copy place was fast and efficient.

But they didn’t give me enough reason to go back. They were apathetic as to whether or not I existed or whether I was giving them my business.

If I want indifference and apathy, I can go to Office Warehouse.

Conversely, I don’t mind going to my auto dentist. It seems every time I go to the mechanic, no matter what it is, it costs about the same as a root canal. Transmission problems? $570. Brake problems? $560. Air conditioning not working? $630.

But I don’t’ really mind because Kenny Velez makes me feel good. He runs a big garage that is always busy, and he spends a lot of time managing his mechanics and teaching. But he always has time for me. He always makes it a point to come to the front when any customer walks in and greets them personally. That’s brilliant. And it’s because of the way I feel that I trust Kenny with all of our cars.

So, how do your people (partners, of course are major villains here) treat your most precious asset?

Don’t you realize that everyone in the world has an invisible banner across their forehead that says, “I want to feel important”?

Got indifferent people? Got lost clients, or people who beat you up on fees?

"No perceived value"

The third reason cited in our survey was lack of perceived value by the client in the services provided by the CPA.

This should be no surprise for an entire industry that is so heavily focused upon itself, and not the needs or wants of the client.

The vast majority of CPA firms, no matter what the PR people insist upon saying about our profession, provide information to people that they don't want, in a format they don't understand, and by the time they get it, it's too late to utilize for their benefit and then nobody explains it to them! No wonder there's a lack of perceived value by the client and they eventually leave!

Isn't it amazing, that in the state societies around the country, I cannot find a single committee devoted to "client service"? Oh, you'll find all sorts of committees on computers, litigation, and technical related issues, but none on providing what the client wants. And we wonder why CPAs tend to get beaten up on fees.

At a recent training session in house at a medium-sized CPA firm, the managing partner became quite upset with what I was saying about our beloved profession. He marched me into his office, walked over to a file cabinet, and picked up a beautiful red folder with work papers in it. On top beneath a meticulously tied bow were the financial statements. "This is what we do for our clients!" he proclaimed proudly. In reply, I said "Jim, that's the beginning, not the end in the client's eyes."

"Our business wasn't appreciated"

No surprise here people want to know that the people they do business with cherish their loyalty. Dale Carnegie (no accountant, he) said that appreciation was the number one human need. However, in our business, because it is a "profession", most CPAs never even bother to thank their clients for their business, and then they wonder why they leave.

One genius partner in a large Midwestern firm told me that it was against firm policy to thank the clients for their business! Dumbstruck, I asked why that was so. He replied "If we start thanking the clients, they may come to expect it!"

Many clients offered that their previous CPA was merely an expensive historian who was replaced by someone who cared.

"Turnover of partners or staff"

It's a fact: We are in a people business, something else they don't teach us in school. Anytime the service provider changes on the account, that relationship is put in danger. Yet in over 98% of the hundreds of CPA firms I've interviewed over the last fifteen years, no consideration is given as to who the client wants to deal with then someone on staff or in the partnership leaves. Rather, someone is sikked upon the client based upon who has the least amount of work. Sort of like an arranged marriage, don't you think?

"We never see them"

Clients want to see their CPAs.

One of our country's most successful CPAs recently told me of a major client he picked up. As his is habit, he invests a day of his time at the client's business at the beginning of the relationship just to find out about the client's business and to get to know the people involved. Of course, he usually walks away with thousands of dollars of non- compliance consulting work that needs to be done, more than paying for his time. "This last time," he told me "the client (a thirty thousand dollar a year engagement) said I had spend more time with them that day than the previous one had in five years." On that one day, he identified over thirty thousand dollars of consulting work alone. No wonder he is so successful he understands that the client wants to see their business advisor, and his competition, our entire profession, hasn't figured it out yet!

"CPA firm couldn't expand with us"

In this instance, the client has perceived that the CPA firm they were dealing with couldn't provide additional services that were needed or wanted or wasn't able to grow adequately with the company. Unfortunately, many times, the firm that was left behind was quite large, sophisticated and could have easily provided additional services had the client known.

Many of our peers erroneously believe that their clients are already familiar with all of the services the firm can provide, when sometimes they don't know themselves. Then they delude themselves further by thinking that the client will then run to them when they figure out that they need something. It is this attitude that causes CPA firms to lose clients unnecessarily to more assertive and smarter competitors.

"At Banker's (or third party's) request"

Ask why most CPA's think bankers and other professionals ask clients to switch accountants and you'll hear answers like late financial statements, information submitted in an unfamiliar format, etc. What's the real reason? Ask other professionals, as we have, especially "off the record" and after a few drinks.

What do bankers, for instance, do for a living? They sell money. Where do many bankers get customers from? CPAs, of course. The number one reason bankers really ask clients to leave or switch is that they owe referrals to another CPA. This is another relationship issue, not addressed except in the most advanced and updated training courses.

"A dramatic fee reduction was offered/sought"

Yes, it's true that CPAs lose some clients based on fees. In these instances, the client may simply want to pay the least fee possible, or an assertive firm comes along and makes the client an offer they cannot refuse.

"Continued major mistakes"

Some firms lose clients because they have made too many technical errors for the client to accept.

"Company was sold"

Clients are occasionally lost when they sell their company to larger businesses. Then the CPA firm of the acquiring business in essence assumes ownership of the client.

Lessons to be learned

Now take a long, hard look at this list. What do you notice about it? Yes, it's a long list. What else?

The first conclusion we can make is that with the exception of the very last item, all of the issues related by clients as to why they left their previous service provider could have been prevented! This is a good lesson to learn as the AICPA has said that it costs CPAs approximately eleven times more to acquire a new client than to keep an old one.

The second issue we can identify from this list is that fees are very low on the scale of why clients really leave.

The last, and perhaps most important observation we can make is that technical issues are almost dead last on the list of why clients leave.

It is shocking that in 2006 we could not find a single course taught at any University in the School of Accounting on Client Relationship Management! Or on how to be a consultant. And, after conversations with several professors of Accounting on this very subject, they're not interested. One Big Ten professor of accounting remarked "We assume the firms are teaching these things." She assumed wrong. Ever learn the definition of "assume"?

It now takes five years of schooling to get your certificate. All they teach is more technical stuff. They're teaching our students how to fail in a profession that is ever more competitive! And some states aren't much better. Some states like New York refuse to allow behavioral studies to count towards one's CPE. Shame on us.

What a business!

This is the easiest business in the world we compete against accountants, not against real business people.

Nobody has trained more professionals in the arts of systematic selling, personal marketing or client retention since 1980. Allan Boress is the creator of The I-Hate-Selling System and the co-author of Best Practices of Marketing Professional Services - the only Best Practices of marketing and selling services based on over 1,000 interviews over 18 years. www.allanboress.com[email protected]


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