Oct 30th 2012
By Alexandra DeFelice
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Is your firm at risk of losing clients or missing opportunities for additional wallet share from existing clients?
A large perception gap may exist between what partners believe their clients think of the firm and what clients actually think.
During a webinar for Moore Stephens North America earlier this year entitled “Mining the Opportunities in Your Client Base,” Lee Eisenstaedt, partner at L. Harris Partners, shared reasons clients leave their accounting firms and opportunities for firms to expand their relationships with those clients.
He quoted one survey by Bain & Co. in which 80 percent of company executives said they “provide a superior client experience,” yet only 8 percent of their clients responded the same way.
When it comes to the reason clients leave, 56 percent of the firms named price as the primary reason, according to a survey by MarketingSherpa, but only 29 percent of clients said that was the reason; 40 percent said it was service (while only 17 percent of the service providers thought that was the reason).
Digging deeper, a survey by Capstone Marketing asked both CPAs and their clients to respond to the following: “We’re receiving good client service from our CPA firm,” and “How likely are you to refer your CPA firm to others?”
CPAs thought 73 percent of clients would answer yes to good service. In reality, only 34 percent did. CPAs also thought 87 percent of their clients were likely to refer them, but only 23 percent said they were.
A majority of clients – 61 percent – said they leave because they don’t feel valued. According to Eisenstaedt, they aren’t getting as much attention as they were in the courting process and feel taken for granted.
When L. Harris Partners surveys clients of its CPA firm customers, three questions are asked:
- “How likely are you to refer the firm to someone else?”
- “How easy is to do business with the firm?”
- “Are the services you receive a good value relative to the cost?”
The key drivers to client loyalty fall mostly in soft skills, according to Eisenstaedt. Examples include continuity of the team, response time, quality of service, and timeliness. Those soft skills are then followed by technical knowledge. Competitive fees are near the bottom.
“Price isn’t always the issue,” Eisenstaedt said. “Clients would much rather have these other issues taken care of, and when they aren’t, price becomes an issue. They may say fees because it’s easier to prove than lack of responsiveness.”
Partners often resist surveying their clients, claiming they’ll resent the intrusion, according to Eisenstaedt, but another study by LexisNexis Martindale-Hubbell disproves that point, showing 83 percent of clients said they “value the firm’s willingness to ask for feedback.”
“Firms uncover valuable information when they survey. It changes behavior in the firm,” Eisenstaedt said.
When it comes to getting more wallet share from existing clients, asking them about the services they want and need is key. Forty percent of the clients L. Harris Partners surveys say they use multiple firms, mostly because they’re unaware of all the services that one firm provides.
So how can you educate clients on what you offer and learn what they need?
Adopt a 3X3X3 model to make the client “stickier”:
- Get them to buy three services from you. This comes from the banking industry, which found that the more services their clients have, the longer they stay (one service 18 months, two services 4 years, three services 6.8 years).
- Give the client three contacts at your firm. If one person leaves or retires, you’re at risk.
- Have three contacts at your client’s company.
This may sound overwhelming if looking to embark on this exercise with all your clients, so start with just your most strategic or trusted clients. Even two or three clients per partner, per year may be a good start.
Bring it all together with a client service plan, which will become the road map on how to track opportunities across teams. A simple goal can be introducing one of partner A’s clients to partner B in X number of months. There’s hidden value in capturing the transfer of knowledge.
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 almost 100 countries. Alexandra can be reached at email@example.com.