To Get Client Referrals, Work on Loyalty

Many firms these days claim the bulk of their new business comes from referrals, essentially saying their existing clients do all the business development for them. But this won't work unless you can build true client loyalty. It's worth a lot if you can.

During a session of AWEBLive!, the 12-hour CPE marathon, Lee Eisenstaedt of L. Harris Partners provided some details of what his consulting firm discovered when surveying the clients of accounting firms throughout the nation. Some are alarming and others show substantial opportunity.

  • 40 percent do not find their CPA firm to be "unique." (We addressed "uniqueness" in an article last year.)
  • 35 percent use multiple firms.
  • 29 percent claim they don't know all the services their CPA firm provides (often the reason they use multiple firms).
  • 61 percent find the fees charged to be "fair and reasonable."
  • 78 percent describe their fees as a "good value."
  • 60 percent are "loyal" to their firm. (Partners think 40 percent of their clients are "loyal.")
  • 62 percent are likely to recommend their CPA firm to others.

These findings were part of client loyalty assessments, which Eisenstaedt stressed are not the same as client satisfaction surveys. "Satisfaction" typically is backward looking, often focused on the most recent transactions. Therefore the findings must be updated frequently because the feeling of satisfaction can quickly grow or dissipate, although this may not be the case if the firm is only working with a client on an annual basis. Such surveys do serve as good indicators of current problems and issues, however, and firms can benefit from addressing them face on with clients.

Loyalty, meanwhile, examines experience over time. These types of surveys are forward looking and provide a roadmap for long-term improvement and behavior changes. Results allow firms to build individually relevant campaigns, and they are best updated every 18 to 24 months.

Knowing the results of a loyalty assessment not only allows firms to see who is willing to refer them, but see who is at risk of leaving—Eisenstaedt pointed to one statistic that 60 to 80 percent of clients across various professions will say they are satisfied right before they leave. Also, firms are often surprised when they ask clients to check off services they are seeking and many of those services are ones the firms already provide but the clients were not aware of. This is not unusual when different departments are working in silos, but when discovering this, firms often will put together a plan to figure out how to better cross-promote their products and services.

Partners often have a perception gap  in terms of how loyal their clients truly are, how likely they are to refer their firms, and why clients leave (hint: it usually is not price).

Learning clients' true feelings often accelerates changes in behaviors by partners and staff because it allows them to not only identify opportunities for additional work but to proactively save or strengthen important relationships.

Eisenstaedt alerted one of his clients to the fact that one of that firm's $400,000-a-year clients refused to fill out the loyalty survey. The firm contacted the client and saved the relationship. Six months later, the firm was sold and the valuation therefore was $400,000 higher than it would have been had the client left.

The biggest problem firms often find when conducting such surveys is information overload.

"There's a lot of work to be done afterward," Eisenstaedt warned. "Look at the list, come up with a top five and go from there, otherwise it will be overwhelming."

The full webinar and slides are available on the AWEBLive! site.

Eisenstaedt also co-authored a book on the topic entitled Wallet Share. AccountingWEB readers can receive a 25 percent discount off the cover price by visiting www.MoreWalletShare.com; and using the discount code: 37CMBAFQ. A second edition of the book is scheduled to be published in June.

About the author:
Alexandra DeFelice is senior manager of communication and program development for Moore Stephens North America, and a regional member of Moore Stephens International Limited, a network of more than 360 accounting and consulting firms with nearly 650 offices in more than 100 countries. Alexandra can be reached at adefelice@msnainc.org.

Related articles:

What Makes Your Accounting Firm Stand Out?
Mining the Opportunities in Your Client Base

 


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