Increasing Returns of Client Retention and Technology
Despite the fact it costs more to get a new client than to keep an existing one -- five times as more, for some -- many still focus primarily on adding new clients instead of growing existing accounts.
A better, more complementary strategy would be to help existing clients expand their scope of services. According to a Bain & Company report “a 5% increase in customer retention produces more than a 25% increase in profit.”
When you have engaged, long-term clients, these factors develop:
- You intimately know their businesses and priorities.
- You create personal, trusted connections with business owners and stakeholders.
- You identify potential areas where they can use your help and advice.
- You end up with happier clients, who in turn will take advantage of additional services that align with their needs.
- These pleased clients refer you to their colleagues.
- You get new business and new clients.
It’s an organic cycle with increasing returns. Retaining clients results from work on many fronts, and an important one is technology. When applied with purpose, it supports retention both for firm staff and clients.
A Modern Accounting Firm Experience
Clients increasingly rely on technology in all aspects of their lives. They’re turning down paper-based operations and moving toward those fueled by mobile, collaborative and automated experiences. This trait isn’t limited to Millennials.
According to the Chase Digital Adoption Survey, Gen Xers – a generation firmly planted in business leadership positions – share technology preferences with Millennials. Fifty-five percent use a bank app (compared to 67 percent of Millennials), and 75 percent use online banking (compared to 78 percent for Millennials). Even boomers show a high level of online banking, clocking in at 65 percent.
Likewise, according to the 2017 Bill Payment Trends Survey, almost 40 percent of the responding practitioners said their clients request digital bill payments.
The point is this: Clients expect a modern accounting firm experience, one that hinges on technologies such as the cloud, mobile apps and automation.
Technology Makes All the Difference
Staffing remains a challenge for many firms. It’s not just finding warm bodies, but finding practitioners that are qualified and know how to work with your clients. Their expertise elevates service and contributes to client retention.
In turn, practitioners need strong connections with clients in order to retain business. They must understand the company, its owners, its customers and other variables.
Technology facilitates and strengthens these bonds. Experienced practitioners can miss opportunities to advise clients if they can’t work with real-time, accurate data. A lack of virtual access inhibits responsiveness and frustrates both staff members and clients.
For example, the 2017 Bill Payment Trends Survey found that 65 percent of practitioners recommend clients pay bills digitally. Online payments, especially those powered by cloud-based applications, provide a new level of convenience for clients and the real-time data practitioners need to help them do their job. It’s a great example of technology reinforcing relationships.
Firms Create Stronger Client Ties With Technology
We’ve looked at how clients and staff expect technological conveniences in a practice. How do you convert the use of technology into building stronger, long-term relationships with your clients?
First, adopting technology shows that your firm is listening to what clients want. Clients can handle accounting on the go from any mobile device.
They can find answers quickly thanks to self-service capabilities like portals or cloud-based solutions. They save time and can work more effectively.
Second, by using the latest technology in-house, the firm opens pathways to efficient operations. Instead of searching through independent silos of electronic data (emails, spreadsheets, etc.) tied to specific PCs, the firm automates, organizes and mobilizes tasks. Thanks to integrations between systems, staff also have real-time financial performance data at their fingertips.
In short, the firm is working smarter and winning back time. Firms can invest that newly won time into strategies focused on client retention and growth.
Your firm can offer valuable new services for clients such as AP and AR. It can develop more advisory services touching upon CFO-level insight, succession plans, M&A or analyzing revenue streams. It can even explore and implement value-based pricing for its clients.
One strategy that supports both firms and their clients is unifying processes firm-wide. By creating a standardized approach to a service (checklists, guidelines, technologies, etc.), you apply best practices that result in greater efficiencies and conveniences for everyone involved. There’s no re-creating the wheel. Your firm can quickly onboard a client to new services and prove value immediately.
Technology won’t replace your firm’s expertise and service, but it can offer benefits that will support client retention efforts. When applied strategically and in line with the firm’s business objectives, you’ll find a powerful ally that nurtures increasing returns.