How Do You Ensure A Superior Client Retention Rate?

You’ve worked hard; followed the model, honed your skills and obtained a number of desirable new clients. And, with practice, you’ll just get better at it! OK, but now that you have them how do you keep them?

The most obvious first component is to provide superior accounting services. A lot of this is terribly basic stuff I won’t get into. You already know how to do your job. But, it might be refreshing to look at it from the client’s perspective. What makes them want to stay with you and not look elsewhere?

The bottom line is that they want you to be someone a) they have a personal connection with and, b) whom they believe provides a reasonable value-to-cost ratio. “But wait! But wait!,” you say. “I’m the best accountant in town! Isn’t that what they want?”

Clients don’t place as much value on your skills as you might think (or wish). This is primarily related to not understanding the technical aspects of what you do. Their default belief is that all (or at least almost all) accountants are reasonably knowledgeable and competent. After all, your card says you are an accountant/CPA and you have all those “I’m really an accountant” things up on the wall of your office. This means that they rarely appreciate the level of skill it can take to come up with, e.g. an especially clever tax or estate planning approach. If you assume they will stay with you because you are “the best” it is almost always a mistake except with highly sophisticated clients who can appreciate your efforts. Most clients aren’t like that.

That takes us back to the client’s desire for an accounting professional they feel connected to and being comfortable with the belief they are receiving fair pricing for the services provided.

Let’s get the latter out of the way first. This is easy: You charge the prevailing local rate(s). We talked about pricing in an earlier post, but that’s the bottom line. Couple that with getting their work done accurately and on time and you’ll be fine. If a client leaves just for price – you don’t want them! Sure, keep them at a reduced price if you really need the cash flow, but don’t ever count on them to stick around. Plus, I’m sure you have noticed that the odds are that if they low- ball you on price, they also have a high hassle factor and are a slow pay. These clients are like a trifecta of bad!

It’s the connection aspect of your relationship with the client that makes the real difference with retention, so let’s focus upon that and how you can use this to engender extraordinary loyalty (and quality referrals).
Of course, it’s a given you’ll always be cordial, polite and pleasant with your clients, but then again, so will most other accountants. Displaying a pleasing persona isn’t enough. You’re going to have to expand your efforts a bit.

What might you do to influence the client to regard you as someone who a) values them individually, b) isn’t only looking at them as a source of income, c) is a particularly competent accountant and d) understands and cares about their particular circumstances?

First of all, you must force yourself to meet face-to-face with all of the clients who comprise your list of top 20% revenue sources. Do it at least once a year. Plus, you add to that list any clients who have a real upside in terms of revenue growth and/or quality referrals. The classic way to do this is to invite them to lunch. You have to eat everyday anyway. You pay for lunch and you don’t bill them for the time. It doesn’t have to be expensive … it’s more about having an opportunity to communicate without interruption.

What do you talk about? Firstly, it’s about them and their family. Why? Because you’re exhibiting a), b) and d) above. Then, you morph into asking about their business or job and factors influencing their current and immediate future financial circumstances. Weave this in with some free advice, e.g. “It would be smart to explore in greater detail your cash needs for 2009 with how we want to acquire the new fork lifts and overhead crane. Before you do anything we should run a number of lease vs. buy analyses and go over the results.” Mix in some personal needs, e.g. “I think we should revisit funding of the girl’s college fund every six months since we’re on a tight time line there. We should be very diligent in adjusting how much is being earmarked based upon how the business is doing so you aren’t over or under committing.” Now you’re covering a) through d) and creating the very real perception of value. This is all very casual and personal. Don’t pontificate. Don’t hustle them for work. Make the meeting be about them. If there are any action items coming out of the lunch, immediately follow up with what you have committed to.

Secondly, provide them with one or more things of value they don’t expect. In the last post I talked about ProfitCents. This is perfect if your firm subscribes to this data source (or, remember, you can find outfits on the net that will run a report for you for a fee). But, there are dozens of other opportunities. Send them a copy of a relevant article out of your association publication; or a book you’ve run across that will be of value to them, or something in an alumni publication that gives some insight on the college his daughter is looking at, etc. Whatever it is, either hand it to them or send it to them with a short hand written note. This really stands out because no one does this anymore. What you send them is limited only by your imagination.

This is easy stuff to do and they’ve never before received this level of attention from a professional service provider. They’ll love it! It will make them feel valued. It will make you stand out. It will give them something noteworthy to talk about to their circle of business contacts (“I can’t believe my new accountant. She’s really taking care of me. Etc.”), and this directly leads to first class referrals.

Sealing The Deal – Part 6

You Asked For The Engagement And They Didn’t Say Yes

Now What Do You Do?

In the last post we looked at what happens when you either didn’t connect personally or didn’t offer solutions that resonated with the prospect. Whether it was one of those reasons or a combination thereof, you did not get the engagement. We looked at some things you can do to overcome that initial “no” – which you tried – and, guess what, they STILL said no. Or at least didn’t say “yes.”

However good it might feel as you stumble out into the parking lot to curse their lack of perception and judgment while you mentally apply a tourniquet to your hemorrhaging ego, it won’t change anything. So let’s explore one final methodology that might help you eventually snatch victory from the jaws of defeat.

The idea is to stay in touch with the prospect, but do so in a manner that is more than a wave and “hi” at the local little league game. Of course, you’ll still do that if the opportunity presents itself, but what we want to do manage their perception of you so that eventually you become someone they want to do business with.

Along with staying toward the front of their memory banks, you also want to set yourself apart; to stand out from competing accountants.

One of the most successful approaches to ensure the prospect doesn’t forget you is to provide them real value. For example, you can send them a short email saying, e.g. “Hello Ted. I was just reviewing the new tax regulations for 2009 and I see that there are some new rules related to farm equipment depreciation that might impact your situation. I recall you said Abe Brown is doing your taxes but that you don’t do any forward planning. This is an instance where it might be to your financial advantage to do so. Regards, Alice.” After reading this, what will they do? Well, they might call Abe, but it is just as likely they’ll call you. It won’t be the worst thing in the world if they do call Abe and he quickly reveals he doesn’t know what they are talking about. If you do this you’re not being overly aggressive. There’s no pressure; you’re not being pushy, just helpful.

Or, you can do something more sophisticated and unique. For example, if your firm subscribes to ProfitCents you can easily and quickly prepare a comparative report that gives your prospect an idea of how their business is doing vis-à-vis other, similarly situated companies. You can use this to absolutely knock their socks off with data they’ve never seen before. You offer to go through the report in more detail and relate its contents to their circumstances. If that happens, I’m sure you can see where this goes and how it reawakens your opportunity to close the prospect.

This is an opportunity to differentiate you from other accountants. You can modify the ProfitCents form so that only you and/or your firm appear on the document. Unless you have very sophisticated competitors (and you are just plain unlucky) no one will recognize where the information came from. It’s powerful stuff.

(ProfitCents is a program that interprets financial statements into plain-language, narrative reports that include ratios, graphs, industry comparisons and trend analysis. It is available from SageWorks, Inc. There are also some companies that will run a report for you for a fee. I’ve encouraged many clients to use this technique and there have been some spectacular results. Check it out on the net.)

My experience is that providing valuable content is far more persuasive to the average prospect than, say, giving them tickets to a baseball game or similar. You need to demonstrate that you aren’t just a nice person … shoot, everyone plays that card … and instead up the ante by doing something that separates you from the herd and gets their attention. I’ve given you a couple of examples, and I’ll leave it up to your fertile imaginations to come up with even better ideas.

Topic Change

I received a couple of emails asking for further explanation about the last post when I talked about withdrawing before the prospect says “no.” The scenario is ripe when you feel the conversation with the prospect isn’t going well and the chances are poor the meeting will be successful. So, I proposed you preempt the situation by taking yourself out of the game. I said one means was to essentially state that your services are overkill for their circumstances and they should seek a more basic solution to their needs. The unspoken message is that you are too knowledgeable, skilled, experienced, expensive, etc. for them. It also says you are honest and have the forthrightness to tell them the truth. In sales, this is called a scarcity play. Many prospects are surprised by this withdrawal tactic and it is not at all unusual for them to do a 180 degree turn. Why? Because you have said “you can’t have this” and, of course, people immediately want it. This is a very powerful motivator.