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Help! My Accounting Practice is Hemorrhaging Clients!

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Statistics Tell the Truth

What would you do if you were losing almost one-fourth of your clients each year? I’ll bet you’d be pretty concerned if you discovered that the national average for a client/accountant relationship is five years, which translates into a twenty percent annual drop rate. Of course you’d feel better, but then again, it still means that on average, you have to replace one out of every five clients each and every year.

Or consider that you run a small payroll service, and you’ve just discovered that the average service bureau payroll client only sticks around for four years. The big boys have to replace one out of every four clients each year, just to stay in place.

In his book Outstanding Customer Service (1998) Dr. David Deviney, a consultant with many industries says that the American Society for Quality found out that:

* 67% of customers leave because of an attitude of indifference by a company employee;
* 14% of customers leave because of dissatisfaction with the product;
* 10% of customers leave for other reasons (move, death, bankruptcy, etc)
* 9% of customers leave because of competitors

Let the Bleeding Stop

Faced with these staggering statistics, many practitioners embark on an aggressive marketing plan in an attempt to generate new clients when all they really need to do is pamper their existing customers, give them the royal treatment. In short, make them feel that their business is genuinely valued by your firm.

One way is to re-think client support. Support not only means the service being given in the process of completing the client’s project, but also going beyond the whole nine yards to make him feel that there is a value-added service built into the fee he is paying. For example, if he needs to file his tax declarations, does your firm offer free services such as photocopying, mailing, preparation of appendices, representations with the tax authorities? Sure, you say, that’s standard, isn’t it?

Client support, however, means more than that. When an accountant sees that his client has to make large tax payments, does he make an effort to discuss all legitimate means for deductions? Perhaps your client is not aware of the government’s new taxation rules allowing certain deductions on such things as alimony, investment losses, mortgage refinancing, allowable business losses.

In other words, does the client feel he received responsible client support because when he came to your office, he thought he had to pay the government $12,000, but after you drilled him on all his expenses that by law are deductible, he ended up having to pay only $9,500.00 in taxes? This is what the value-added element means in client satisfaction.

Does the client feel he received responsible client support because when he came to your office, he thought he had to pay the government $12,000? Click To Tweet

He is not only paying for the services of tax preparation and filing, but also for your firm’s expertise in current tax rules. And when he comes back year after year, and has referred at least four additional clients to you, this is when client satisfaction becomes a significant concept. When a client is satisfied, watch him tell family, neighbors and colleagues.

Magic of Referrals

You’ve heard of bankers talk about the “magic of compounded interest.” In a professional practice, the magic of referrals becomes evident when client satisfaction resulting from client support and value added service, brings in additional clients. Instead of pounding the pavement looking for new clients, let your existing customers do this for you. Referrals are a valuable source of new business.

Word of mouth – that’s how reputations are built.

Summary

Your professional practice cannot afford to hemorrhage clients. You need them to stay aflloat and be competitive in the industry. This equation, expressed in different ways, still holds true as the key to customer loyalty:

client support + value added service = customer satisfaction = more clients through word of mouth

Client support and value added service must go beyond standard current practice. Thinking about extras you can throw in to make your firm stand out as a customer-oriented firm, instead of a profit-oriented one, works like magic. Referrals and word of mouth – these are the true indicators of customer satisfaction.

And…loyalty.


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Best to you and yours,

kirks-sig

 

Kirk

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