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.