In a previous article I mentioned that one of the reasons companies hire new CPA firms is because they are dissatisfied with their existing CPA firms. Here we’ll delve into ways that CPA firms can minimize the occurrence of client dissatisfaction.

A major reason for client dissatisfaction is the belief that CPA performance does not meet expectations. Perhaps CPA firms are promising too much to the client? Is there a discrepancy between the client’s view of a CPA firm’s performance during an engagement, and how the CPA firm views its own performance? How do clients determine how to react when CPA firms do not meet expectations?

Many CPA firms feel they need to impress prospective clients in order to win an engagement. Sometimes, this involves making promises to clients that may not be fulfilled, such as pledging to complete a project within an unrealistically short time frame. Another common occurrence is guiding clients to believe that a senior partner will be extensively involved in a project when it’s not really possible.

These commitments form the basis for the client’s expectations, a key determinant of the client’s eventual satisfaction or dissatisfaction. Are these expectations realistic?

On the one hand, CPAs need to demonstrate to potential clients that their service will be superior to the competition in order to be hired. However, if these promises cannot be fulfilled, the consequences for the CPA firm can be devastating. Not only will the client leave the CPA firm, but the resulting dissatisfaction may also generate negative word-of-mouth, which could adversely impact the chances of attracting other new clients. CPA firms need to take this into consideration when communicating with prospective clients. If CPA firms cannot meet certain criteria in order to be retained by a prospective client, it may be better to avoid competing for the engagement, as opposed to running the risk of not meeting expectations.

Influencing Client Perceptions of Performance

For certain types of performance, benchmarks can be easily measured. For example, if a report was promised by the CPA firm to the client on a certain day, missing the deadline is a clear example of performance not meeting expectations.

However the performance of CPA firms in many other situations is not so clear. For example, how can a client assess the involvement of senior partners in an engagement? In these situations, CPA firms can influence how clients perceive performance. Whereas observing a senior partner at the client site is a way for clients to assess involvement in an engagement, there are other ways partners can be involved. Researching issues relating to the project, for example, can be done in many instances more effectively from the CPA firm’s office. Are CPA firms effectively communicating this to the client? This influences how clients view the partner’s involvement (performance). Perhaps the client is inferring from the lack of the partner’s presence at the client site that the partner is not extensively involved in the project. The CPA firm can reduce the chances of this occurring by communicating to the client that the partner is working on the project from the CPA firm’s offices, where the partner perhaps has better access to valuable resources (such as specialized databases) that are not available at the client site. Phone calls or written communications from the partner would convey this message. If the client is aware of this, they are less likely to infer that the partner’s involvement in the project is limited.

Explaining to Clients Why Expectations Were Not Met

Despite the desire to meet or exceed expectations, CPA firms sometimes do not meet client expectations. What can CPA firms do in these situations? It is useful to understand the process by which clients try to understand the reasons behind the service failure, in order to form an effective response to minimize client dissatisfaction.

A good example to illustrate this point is a CPA firm missing a deadline for a project. In this situation, the client poses a series of questions. Is the missed deadline a rare occurrence, or is it an event likely to happen again in the future? Was the cause of the missed deadline related to the CPA firm, or was it related to the client? For example, was the delay caused by a professional at the CPA firm not performing an analysis on time? Or was it caused by an employee at the client not providing the necessary information in order to conduct the analysis? Finally, if the delay was caused by a professional at the CPA firm, was it due to illness, or because the professional was working on a project for a larger client which had a higher priority?

The answers to these questions will determine the degree to which the client will be dissatisfied. If a client believes that missing the deadline was not an isolated incident, was due to causes relating to the CPA firm and was controllable by the CPA firm, levels of client dissatisfaction will be very high. On the other hand, if a client believes that missing the deadline was a rare occurrence, was due to causes unrelated to the CPA firm and beyond the control of the CPA firm, there may be no negative consequences to the CPA firm at all. It is therefore very important that to the extent possible, a CPA firm should provide evidence to the client that supports its claims that missing the deadline was a rare occurrence, was due to causes unrelated to the CPA firm or beyond the control of the CPA firm. Otherwise, there is a very high likelihood that the client will blame the CPA firm for the negative outcome. Of course, if such evidence does not exist, a recovery plan should be in place whereby the CPA firm attempts to deal with the consequences of service failure. Apologizing, compensating the client and implementing corrective actions to ensure that such events do not occur again in the future are all additional steps that CPA firms can take in order to minimize client dissatisfaction.

Copyright © Daniel Laufer, 2007

Daniel Laufer, PhD, MBA, CPA (Ohio) is an Associate Professor of Marketing at Yeshiva University in New York City. He teaches academic courses on the topic of Developing Client Relationships at Accounting Programs, as well as continuing education courses on the topic to CPAs. He has experience in Industry as a manager at a "Big 4" Accounting Firm. Dr. Laufer has also served as an editorial advisor to the Journal of Accountancy, and received a Distinguished Service Award for his service.