Most firms have a high retention rate per client. That means their clients stay as clients of the firm for a long period of time. Somehow the Accounting profession has got most of their clients bluffed that it is hard to change Accountants. It’s actually not.
Partners will argue that clients remain with the firm because of the great relationship they have with their clients. I beg to differ. How can you have a great relationship with someone when you see them once or twice per year?
Imagine what your relationship would be like at home if you only saw your life partner once or twice per year? For some of you reading this, it might be better! (This is a joke, of course.)
For the majority of firms, I do not think retention rate is high because of great service, relationships, value for money, or services offered. I think retention rate is high because of financial intimacy.
I think retention rate is high because you know things about the client’s financial affairs that no one else does. It’s financial intimacy. Most people do not speak openly about their financial affairs — it’s a private matter. And if they only speak to a couple of people about a private matter, a lot of trust is built up. Not relationship — trust.
Your clients trust you to not tell others. So, they don’t leave.
However, the real measure is how happy they are to be a client of your firm. I think that metric is based on the number of referrals you receive each year per client and how many projects they buy from you each year.
For starters, work out the average referrals per client. If you divide the number of referrals (inquiries) you get annually into your total client base, this will give you a startling reality of how happy your clients actually are.
Now the flipside to that is they might want you all for themselves and they do not want to refer! Possibly. The easiest way to increase the number of referrals is to systematically ask for them. If you deserve a referral (great service, etc.), then you’ll get referrals. Most clients do not refer for three reasons.
If you focus on those three, then you’ll get more referrals. This is not about marketing and referrals; it’s about clients and WOWing them into staying with you.
Typically, your clients will stay with you out of convenience. But, by creating significant value with the services that you provide on top of financial intimacy, you become indispensable to all your clients.
You can deepen the financial intimacy between you and your clients through effective communication. Establish documented processes that enable you to understand your clients’ needs and then create a menu of value-added services to match those needs. Our Magnify membership program has helped hundreds of firms worldwide develop and implement systems that maximize the profit potential in their existing clients while building stronger relationships
About the Author
Colin DunnDirector & Co-founder at PANALITIX
Colin is a Chartered Accountant who, having spent almost 10 years with one of the fastest growing and most innovative firms in the UK, has since invested over 20 years helping business owners to improve their businesses with a focus on attracting new clients, better managing existing clients, developing new products, building an engaged team and strengthening internal business processes.
Colin's primary focus at PANALITIX is on product development and business improvement content. He is the author of the bestselling book “Accountants: The Natural Trusted Advisors".