Dealing with ‘divinely discontent’ clients
In his annual letter to shareholders, Amazon CEO Jeff Bezos said, “One thing I love about customers is that they are ‘divinely discontent.’” That sounds existential, but he meant that it’s human nature for customer expectations to keep going up — no matter how well you serve them. And for that reason, Bezos said, “Companies cannot rest on their laurels.”
Research shows one-third of your clients are considering switching CPA firms at any given time. I’d say that estimate is conservative. Just as the web has made people savvier shoppers, it’s also made them savvier about working with professional services providers. Clients are realizing that it’s not as hard to switch CPAS as it used to be.
If you’re in the latter stages of your career, you may say to yourself, “I’m OK with all the changes going on around me. I’ll be out of the business before I’m deemed irrelevant.” But for the rest of you, it’s time to take stock.
Amazon isn’t always the lowest-cost option for online shoppers. The reason people continue to shop with Amazon is because they make it easy. It’s all about the customer experience. Low prices and fast, free shipping are only part of the equation. Even with millions of customers every day, Amazon remembers you and makes you feel personally valued.
Can you say the same about all your client relationships? Bezos is obsessive about continuous improvement and that culture permeates his vast organization. By the way, “discontent” doesn’t necessarily mean you’re unhappy. It simply means deep down you have a sense you could be doing better. As a leader, it’s part of your responsibility to get everyone at your firm on board with that philosophy.
The main reason why clients leave is because they don’t feel valued. Maybe they had to wait two weeks to have an urgent question answered. Maybe they can’t get help using your new client portal or don’t like the tax organizer you send them every year. Maybe they sat in your waiting room for too long and nobody greeted them or offered them coffee. Clients rarely leave because of technical incompetence, or your fees, or because they had a big tax bill last year. It’s all about the experience they have with you and your team.
Firms should be asking themselves: “How are we managing our client experience?” Like many professional services firms, CPAS spend way too much time trying to bring in new clients and not enough time trying to keep their existing clients happy. That’s human nature, but you have to work hard to break that habit individually and as a firm.
Net Promoter Score
NPS is a client satisfaction and service quality metric based on a single survey question that asks clients how likely they are to recommend your firm to a friend or colleague. Clients respond by using a numeric scale of 0 to 10, with 10 being extremely likely and zero being not likely at all. NPS is calculated by subtracting the percentage of detractors (those who respond with a 6 or lower) from the percentage of promoters (those who respond with 9 or 10).
In general, an NPS above 50 percent is considered “excellent,” and above 70 percent is considered “world class.” While there are leaders and laggards in every major industry and profession, certain industries are consistently rated higher by their customers than others. Unfortunately, the average accounting firm weighed in with an NPS of +19 percent in 2018, according to Inavero research. That’s down from +31 percent in 2014 and puts accounting firms near the bottom of the pile with credit card issuers and health plans — and below wireless carriers. Ouch!
Create a client advisory board
If you have a robust customer relationship management system, you might glean a few hints of client dissatisfaction in your data, but in most cases you simply have to ask clients directly. Sure, nobody likes to hear bad news or criticism, but that’s a lot better than having clients leave you and not understanding why.
Rather than using focus groups and surveys, consider creating a client advisory board with half a dozen of your best clients. They should feel honored, especially when they see the caliber of the other folks you’ve invited. Invite them to a nice lunch three times per year and ask them what they like about working with your firm, what could be better, and what you can do to make them want to refer you.
Make sure you invite a good cross-section of your client base and that invitees don’t work for or run competing businesses. Ask what you could be doing to make your best clients more likely to refer you.
It’s best if you and other leaders of your firm don’t run the lunch discussions. You’re too close to the clients to be objective. A marketing person or operations person at your firm can usually do a better job of staying objective, asking good questions, and being a good listener.
There’s another important benefit at work here: The more clients give you their feedback, the more they’ll be vested in your firm’s success. And that means they’ll probably introduce you to other people just like them. This is the best way to replicate the clients you enjoy working with the most and who are the best fit for you and your firm.
You can’t acquiesce to every client demand
As part of improving the client experience, you need to set reasonable expectations with them. Let them know they must get all their documents to you by a certain date or else you’ll have to file an extension for them. Filing an extension is not necessarily a bad thing, but you can make the process smoother by letting clients know well before tax season begins what the best way is to collect and send you their pay stubs, receipts, account statements, charitable deductions, etc. If you don’t set these expectations upfront, then you can’t complain about your clients being disorganized or unreasonable during crunch time.
Prune your client list the right way
That being said, sometimes you have a few bad apples within your client roster. They might be nice people, but they’re demanding, low-margin clients who don’t listen to what you say and eat up all of your staff’s time and resources. For whatever reason, they don’t work within your system and you need to find them a better home.
Get 1 percent better every day
Now, this doesn’t mean you have to make major breakthroughs every day. You just have to try to make incremental improvements, say just 1 percent better, each day. That’s called the “kaizen effect,” named after the Japanese word for continuous improvement.
As your clients’ most trusted advisor, you should be able to infer what they’re going to be most concerned about in the near future without them having to ask — selling their business, college tuition starting soon, a child’s wedding, or starting a business. How can you help them make smart financial decisions about those things? As a CPA firm, you’re driven by dates and deadlines, which happen at the same time every year. They shouldn’t be sneaking up on you or your clients. Anticipate they’re going to procrastinate.
If they’re not using the bulky tax organizer you send them every year, ask why they don’t find it useful and what can you do to make it better? Have clients “co-create” the experience they have with you rather than just dictating it to them.
Divine discontent is an asset, not a problem. It’s an asset with your clients. It’s an asset with your firm. It changes the way you look at growth and it changes the way you look at change.
Kyle Walters, CFP, CPWA, CIMA, is a partner at L&H CPAS and Advisors in Dallas.