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Why Do Accountants Lose Clients?

Aug 19th 2015
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If you want some real answers on how to avoid losing clients, all you really need to do is ask CPAs how they’ve managed to pick up the new ones, which is exactly what I’ve been doing lately.

Some of the answers are startling and all of them are instructional. Most of the time, accountants can blame the CPA that their new clients abandoned.

Here’s an example: Mirella (no last names), an independent accountant and tax practitioner near Rochester, N.Y., puts it succinctly: “You will lose a client if you charge too much, do not answer their phone calls, do not get their work done on time and do not give them the personal service that they deserve.” She also adds: “You may lose a client if you make a mistake, but if you are honest about it and fix it, you may keep them if all the other things are in line.”

Howard, another small-firm CPA, has a great take on it, too:  “There are all kinds of ways to lose a client,” he says. “However, my experience is that when I pick up a new client, the prior CPA repeatedly made one or more of the following mistakes:”

1. Failure to deliver the product, tax or accounting, in a timely manner.

2. Failure to respond to routine inquiries, e-mails or voice mails in a timely manner.

3. Failure to understand that the key to profitability is to maximize the lifetime value of a client and not in trying to squeeze the most fees out of an individual transaction.

Then there’s Joshua, who calls himself “the chief numbers guy” at his own firm in the Los Angeles area. He is still relatively new as his own practice owner, but he says he’s been building his new business “by doing three simple things:”

1. Do what I say I'm going to do.

2. Charge what I say I'm going to charge.

3. Ensure that my client understands the value exchanged.

I think most people naturally understand the first and second, but Joshua calls number three “the secret sauce.”

He tells the story of winning a client who had told him, “I just don't understand what that guy did to earn $700.” In fact, Joshua is not much cheaper. He may even be more expensive than the accountant he replaced. But, he explains “the point is, when you charge for a service if a client doesn't perceive the value, there is no reason to come back.”

If the incumbent practitioner did nothing to enhance the experience or the relationship, then any kind of fee can feel unjustified. And, that’s “all that’s required to send someone shopping.”

The fact is switching costs are low for most clients, with the exception of audit clients. But overall, the answer seems to come down to setting expectations and then exceeding them.

That’s “secret sauce,” which is not much of a secret, really.

Next question: What are the best new ideas in client retention? Join the survey; get the results.

Rick Telberg is founder and CEO of CPA Trendlines Research, at, which delivers actionable intelligence to tax, accounting and finance professionals.