Why do CPAs and accounting firms lose their clients? It’s a question that often leaves CPAs scratching their heads. But it really shouldn’t. Is it an accepted notion that clients will always come and go? Or maybe it’s because clients don’t understand the value of the services you provide.

“Being a CPA is probably the easiest profession in the world,” noted Allan S. Boress, CPA/CFE, because you are competing against accountants and not business people. AICPA’s Private Companies Practice Section recently tapped Boress, a 31-year veteran of the profession, to debunk myths and share insights about how you can keep clients more effectively and get more referrals.

He likened business people and entrepreneurs to Bill Gates, Sam Walton, the Southwests and the Toyotas of the world. What is it that they have and what is it that they do to keep their clients from leaving? The difference lies in the way they treat their customers, says Boress. For example, Southwest goes the extra mile by sending out birthday cards to their frequent flyer customers, while Wal-Mart’s truck drivers aid people who need help on the roads with vehicle breakdowns during late evening hours. Toyota, on the other hand, provides a service wizard on their Web site that customers can use to pick a service and select a date. Depending on the selected service and dealership, availability of dates show up so the customer can select the most suitable day.

“Ninety percent of the people who come into the CPA profession want to be left alone with their spreadsheets, calculators, pencils and erasers,” said Boress. Unfortunately CPAs can’t grow their practice in a vacuum. He reiterated that oftentimes CPAs take measures that only help in losing clients rather than gaining or keeping them.

Begin your analysis by asking yourself this simple question: What’s the single most important asset in your firm? As much as you’d like to relish the thought, no, it isn’t you. Neither is it your staff or your IT department. It is your clients.

Client Relationship Management

What is client relationship management? Boress defines it as “a commitment to moving closer to your clients over a period of time.” He explained that this is a process, rather than an event, that doesn’t simply happen overnight.

Some of the rules that apply to client relations management include:

1. The older the relationship, the harder it is to change that relationship. For example if you are new in a firm, it will be difficult to make the firm’s partners adapt to your ways than the other way around, no matter how good your ideas are.
2. The higher the level of client service, the greater the disappointment. As an example Boress noted that when he flies on Southwest Airlines, he always gets from Point A to Point B, his luggage reaches its destination and their customer service staff is always courteous. However, when they lose his luggage, he gets very upset because he has come to expect good service from Southwest Airlines. On the other hand, when he flies on a major airline that is currently going through Chapter 11, and that airline loses his baggage, he is not that frustrated because he has no expectations of the airlines.

Why Do Your Clients Leave?

Like everybody, your clients do complain when they’re unhappy. And they tell their gripes to your competitors and to whomever else will listen. Boress recently conducted a survey of 150 clients of all service firms across the U.S. and Canada. Listed below are their top complaints in the order of importance:

• Lack of communication. This includes lack of responsiveness and lack of timeliness — people want to know what’s going on.
• Indifference by service provider. If you’re a partner, then you should teach your employees and partners to treat your clients as partners. See how people treat you.
• No perceived value. This is because:
  
  
  • Clients don’t know what CPAs/CPA firms do
  • CPAs’ services are invisible
  • CPAs do not tell clients/customers what they do for them
  
  
• Not appreciated. Dale Carnegie said “Appreciation is the single most appreciated emotion.” Your clients don’t feel appreciated. How many times have you said “Thank you!” You can never thank them enough. You need to recognize that.
• Conflict of interest. There’s a conflict with the firm. Maybe their firm was bought out.
• Turnover of partners/staff. Because the person who the client/customer was dealing with left the firm. “You have to understand that loyalty is with the individual, not the firm,” said Boress. In the eyes of the client, a firm is an innocuous entity. The loyalty is to that person with whom they deal. Unless the partner of the firm interjects himself into that relationship or keeps the person taking care of the client so happy that they wouldn’t dream of leaving the firm, a firm-client relationship will always be at risk.
• Not enough face time. In order to perceive value and in order for them to perceive that you appreciate them, “your clients actually want to see you.” So during the year, you have to do “client-maintenance” that most firms don’t do, such as taking your clients out to lunch, going golfing or going out to a ball game. Networking allows you to see your clients. Boress urges CPAs to meet with clients and network especially during busy seasons, so they see you. It doesn’t have to be a long meeting. Both you and your clients need to eat lunch. Take them out for a quick bite or chat with them over a friendly cup of joe. You need to do this not only because they are your clients, but also because they are your source of referral service. “How the heck is another CPA firm going to get their foot in the door,” if you’re seeing your clients every week.
  
  

  “When was the last time you asked your client what they need instead of telling them what services you can offer them?” — Allan Boress

  
  
• Lack of innovation. Because CPAs do not change. Your clients and their businesses change every day. What do you do differently? “What are you doing differently to get your work product better, faster and in a way that your clients can understand it.” What are you doing to improve? Ask your clients what it is you can do differently to help them understand. Is there a way that you can present information so that it is more easily understandable?
• Work product not good enough. It was just not good enough.
• At banker’s or third-party’s request. Because someone just came along and asked them to leave. “Oftentimes bankers ask clients to leave, not because they don’t like the financial statements, but because they have a relationship with another CPA firm with which they’re close.” Boress suggests that that is what you do. You should grow these types of relationships.
• Dramatic fee increases offered. Somebody came along and offered them a better deal.
• Continued major mistakes. Because clients think their CPAs continue to make mistakes.
• Company was sold. You lost your client because a company was sold. It does happen.

Now that this list is complete, there is one important thing that you should note. Except for the fifth and last items, all the other bullet points are preventable. Basically, almost all the issues on this list are human-relationship and communications related, which goes to show you what you need to do to improve client relationship and grow it. Nurturing is always a good thing.

Why do your customers leave? Join the survey.

Tune in next issue, when I will let you know why clients stay with a firm and what you can do to keep your clients happy and have them introduce their friends and co-workers to you. Yup! Word-of-mouth advertising goes a long way. You better believe it.

Sukanya Mitra is Managing Editor of the AICPA's Insider™ electronic newsletter group.