Divider
Divider

Rick Telberg
Rick Telberg
 

What’s the ‘Secret Sauce’ for CPA Success?

With client retention the top issue for firms, we go looking for answers. Next question: Got gadget lust?

October 5, 2009
by Rick Telberg/At Large

If you want some real answers for how to avoid losing clients, just start asking CPAs how they’ve managed to pick up new clients.

That’s exactly what I’ve been doing lately. Some of the answers are startling. All of them are instructional. Most of the time, accountants can blame the CPA that their new clients were abandoned.

Mirella Martorano, an independent accountant and tax practitioner near Rochester, N.Y., puts it succinctly, “You will lose a client if you charge too much, do not answer their phone calls, do not get their work done on time and do not give them the personal service that they deserve.”

GOT GADGET LUST?
What are the tech tools or toys, gadgets or gizmos that CPAs love most today?

Click here to join the Tech Trends Survey.
Get the answers
.
(Free. Confidential.)

Plus: Benchmark your technology strategies against other firms and companies.

“You may lose a client if you make a mistake,” she adds. “But if you are honest about it and fix it, you may keep them if all the other things are in line.”

I like Howard Cox’s take on it, too. “There are all kinds of ways to lose a client,” says Cox, director of business consulting at Somerset CPAs in Indianapolis. “However, my experience is that when I pick up a new client, the prior CPA repeatedly made one or more” of the following mistakes: 

  1. Failure to deliver the product, tax or accounting, in a timely manner. 
  2. Failure to respond to routine inquiries, e-mails or voice-mails, in a timely manner. 
  3. Failure to understand that the key to profitability is to maximize the lifetime value of a client and not in trying to squeeze the most fees out of an individual transaction.

Joshua Nowack, who calls himself “the chief numbers guy” at his own Nowack Strategic Business Advisory & CPA in the Los Angeles area, is still relatively new as his own practice owner.

But he says he’s been building his new business “by doing three simple things.”

  1. Do what I say I'm going to do.
  2. Charge what I say I'm going to charge.
  3. Ensure that my client understands the value exchanged.

I think most people naturally understand the first and second, but Nowack calls No. 3 “the secret sauce.”

He tells the story of winning a client who had told him, “I just don't understand what that guy did to earn $700." In fact, Nowack is not much cheaper. He may even be more expensive than the accountant he replaced.

But, he explains, “The point is when you charge for a service, if a client doesn't perceive the value, there is no reason to come back.” If the incumbent practitioner did nothing to enhance the experience or the relationship, then any kind of fee can feel unjustified. And, that’s “all that's required to send someone shopping.”

The fact is switching costs are low for most clients, with the exception of audit clients. But overall, the answer seems to come down to setting expectations and then exceeding them. That’s “secret sauce.” Not much of a “secret,” really.

NEXT QUESTION: GOT GADGET LUST? What are the tech tools or toys, gadgets or gizmos that CPAs love most today? Plus: Benchmark your technology strategies against other firms and companies.  Click here to join the Tech Trends Survey. Get the answers.

WHAT DO YOU THINK? Comments, questions, rants or raves? E-mail Rick Telberg.

Copyright © 2009 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.

About Rick Telberg

Rick Telberg is editor at large/director of online content.

Go to the News Center Now

Disclaimer: Any views expressed in this article do not necessarily reflect the views of the AICPA or CPA2Biz. Official AICPA positions are determined through certain specific committee procedures, due process and deliberation.