Deal­ing with ‘di­vinely dis­con­tent’ clients

Accounting Today - - Practiceresources - By Kyle Wal­ters

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.

Avoid­ing com­pla­cency

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.

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