The foundation of any accounting firm is built on our clients. And the glue or the “stickiness” that binds them to our firms is the personal relationships that we build with them. We should covet them, nurture them and protect them. Nothing new here – it’s the motherhood and apple pie of any professional service organization.
But what is new is that they are more and more under attack and probably less secure than they have ever been. We need to understand some of the changes that may erode their loyalty to us, ensure that we are not taking them for granted, and restart a process in our firms to make the relationship with them much more sticky.
Let’s explore the changes/trends/demographics that we need to be aware of that are likely chipping away at some of our largest client relationships:
Geography isn’t what it used to be. Clients who used to think that they needed to work with a firm “in our back yard” may no longer feel that way. The business world is getting flatter. What they are now likely more interested in is: Do you understand my business?
Do you specialize in companies that make blue round widgets like we do (not green square ones)?
Fueling and satisfying this desire to work with an expert provides for the growth and expansion of mega-firms that are focused on the middle market. These firms have built an extensive menu of services and industry experts ready and eager to serve your largest clients.
Technology has changed the way that we communicate and work with our clients. The opportunities for face time are fewer, clients are busy, and it’s just easier and more efficient to text or email vs. talk on the phone. We may also rationalize delivering our product to the client through the portal when we’re slammed during our busy season. We tell them and ourselves that we will sit down later and go through it, and hopefully, we do. Is it still possible to have a close personal relationship with a client since times have changed? Yes, but you’re going to need to be conscious of how you’re communicating and how often.
The retirement and transition of the Baby Boomers are the last demographic challenging our firms and client relationships. Two-thirds of all multi-owner firms have succession issues, and the successful handoff and retention of clients are central to those issues. Partner retirements in most firms are unfunded, meaning that they are paid out of the future revenue stream of the firm. If the retiring partner’s clients don’t “stick” with the firm, there is no future revenue stream to pay for those retirements.
No doubt you are working on addressing some of the five issues in your firm. Make sure that you are thinking about all of them in the context of client relationships. Together, left unaddressed, they are contributing to a more mobile client. Many of the firms I work with lament about what happened to the good old days when we had a client for life. Never take a client for granted.