Why Clients Leave (and How to Prevent Surprises)by
Creating a positive client experience at your firm means taking deliberate steps to ensure your client retention rate remains high and the people who leave do so on good terms. Bryce Sanders addresses how to spot some warning signs a client intends to make a hasty exit and some approaches you can take to mitigate the damage.
“50 Ways to Leave Your Lover.” Paul Simon released the song in 1975. It’s still a classic almost 50 years later. The song actually listed maybe seven ways. When it comes to early warning signs a client is planning to leave, we can find plenty more.
Accountants are associated with filing taxes. This is often described as a “sticky” relationship because clients rarely change accountants. Many have expanded into the financial planning space too. Some accountants are affiliated with independent financial advisory firms. The expansion of the relationship also increases the reasons why clients might leave.
1. Request for Proposals
It’s the most obvious sign for business accounts. It can happen for legitimate reasons because clients periodically review all relationships.
Approach: You follow the rules and reapply.
2. Lack of Attention
It’s the reason most clients give when leaving service-based relationships. The client may have left or been nonresponsive. When you reach them, they feel they were a number, not a name.
Approach: Survey clients periodically to get feedback. Use multiple communication channels. Include educational material.
3. Perceptions About Confidentiality
As people become more successful they sometimes move the relationship out of town because they think everyone talks about their clients.
Approach: Periodically remind clients about confidentiality. If someone brings up the issue, ask how long you’ve worked together and if they have ever heard you talk about another client. When they answer “No,” indicate you aren’t going to start now.
4. Unresolved Dispute
There’s been an issue. The client feels it hasn’t been resolved. They are upset and let you know it.
Approach: You need an in-person meeting, ideally over a meal. Say: “Things haven’t been good lately.” Hear them out. Don’t argue. Make your points after they have spoken their piece and calmed down. Ask “What can we do to move forward?”
5. A Crime Occurs (or You're Suspicious)
You strongly suspect the client is doing something illegal or not telling you the entire story. They are aware of your suspicions and are either overly reassuring or downright evasive. They say they are planning on leaving.
Approach: Let them go.
6. Sudden Protests About Bills
The client complains you charge for every little conversation. In reality, they may be abusing the relationship and seeking free advice. Their perception is you have a taxi meter by your desk and the bill keeps rising.
Approach: Let them know when there’s a simple answer. Those are free. There are times when it’s a complicated issue requiring research that takes time. If you have an eNewsletter, send everyone useful information that they can read without cost.
7. New Management or Ownership
It’s not the old firm anymore. The neighborhood firm has been bought by a larger operation. A new fee schedule has been introduced. There are more complicated procedures.
Approach: The person who has been their point of contact (and still is) needs to learn on the strength and longevity of the personal relationship. “I’m still here. I’ll be your point of contact. That isn’t changing.”
8. Departure of Partner
Their point of contact has left the firm. This might be the owner who sold the firm or the person who handled the relationship. If they joined a competitor or setup on their own, they may be asking them to follow. They’ve told you as much.
Approach: It’s better if the team, with familiar faces, is still in place. Emphasize they are a client of the team and the firm. “We are still here.”
9. Calling to Discuss Fees
The client is fee sensitive. They wonder if fees have risen. They question small charges. This implies they have been approached by a competitor who is undercutting fees.
Approach: Look together at the history of the fees you have charged over time. Has their situation become more complicated? How much billable time has been involved? What have you accomplished for them, justifying the costs?
10. Moving Without Notifying You
In some cases, your client might change their address (and not tell you). They moved to Florida. You discovered it when mail was returned. They may be assuming they need a new accountant who is local.
Approach: Assuming you can find them, get in touch. If possible, let them know you can still work together. This may come as a relief to them. If they still intend to change, take the high road and offer to transfer over records when they have found their new accountant.
11. Negative Reviews on Social Media
This happens! Your business is listed and clients can provide feedback. If your business isn’t listed, they may be able to submit your name, create a profile and enter a review. These can be scathing.
Approach: This can be seriously damaging. You need to speak with a PR firm or other specialist in social media to find out how negative reviews can be legitimately addresses. If the client has a grievance, you should try to settle it.
12. Not Returning Phone Calls
This is an obvious signal they are creating distance. Most people don’t like confrontation, but they probably don’t know how to tell you they are leaving.
Approach: Try other channels to get in touch. Be politely persistent if you have legitimate reasons to need their attention.
13. Constantly Complaining
The client who complained now makes lots of noise. They are rude to staff and wonder why certain documents are necessary. They may be trying to create an environment where you will be happy to see them go.
Approach: Hopefully you have a staff person with incredible patience. They try to calm the person down and solve the problem or satisfy their request.
14. Making Unreasonable Requests
There are people who wait until the last moment to give you the necessary documentation, then expect you to file on time. There are clients who fail to include necessary documents, hoping you won’t notice.
Approach: It’s a mystery why they think this behavior will be tolerated elsewhere. You provide checklists in advance. You call to confirm they are actually using it. You let them know immediately what documentation is missing and how nothing happens until it’s received.
15. They Only Want to Speak to You
Some people have this “top person” mindset. You are their only point of contact. If you won’t speak with them, they will move to another firm where this will happen.
Approach: Accede to their request, but remind them there are many times when you are unavailable. Another team member can handle it faster. Mention when you eventually do speak with them and hear their request, you will hand it to that same team member.
The primary client has died. Their spouse inherits. This includes ongoing relationships. Unfortunately you don’t have a relationship with the spouse. According to Barrons, the investment firm Vanguard reports about 70% of surviving spouse’s leave their partner’s financial advisor within a year. (1)
Approach: Make it standard practice to know all parties in the client relationship.
17. Failure to Establish Cross-Generational Relationships
There’s no relationship with the heirs. It’s similar to the above situation. They inherit, but have their own relationships in place.
Approach: Try to get your clients to introduce you to the next generation. The logic is you are going to meet someday (after the funeral). Why not meet under happier circumstances?
18. Lack of a Succession Plan
The new client wants a long-term relationship. Since they are looking forward to retirement, they assume you, an experienced practitioner, have the same goal.
Approach: Let people know your plans. You might plan on staying active forever. Your partner or the next generation will be stepping in. Show continuity.
19. Perceived Limitations
They think your capabilities are limited. They became successful. Their business grew. They feel they need to “step up.” They might have been solicited by a competitor.
Approach: Periodically review your firm’s capabilities with your client. Your periodic face to face meetings are a good opportunity.
20. Negative Firm Publicity
Something went wrong with an affiliate. It might be criminal. Your client assumes one rotten apple taints the entire barrel.
Approach: Lean on the personal relationship. The problem was in a different division elsewhere. For your client, “you are the firm.”
21. Relative Enters the Business
Someone in the family got licensed. They want to be supportive and move their business over.
Approach: It’s a tough one. In the investing world, the client can spread their money around. In accounting, it’s usually one relationship. The only strategy might be to ask them to adopt a “wait and see” attitude, to determine if their relative is staying in the job.
There might be “50 Ways to Leave Your Lover,” but we found 21 reasons clients might leave and how you can proactively save these relationships.
Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.