1st February, 2017
One of the hardest part of running an accounting business is finding good clients, but how do you tell when they’re about to walk away?
After all, clients rarely tell you what they’re thinking so it’s up to you to read the signs.
A client leaving isn’t necessarily a bad thing, depending on the client of course. However, if you have clients you want to hold onto, how do you read the warning signs that they’re about to leave?
The first warning sign is when they suddenly stop contacting you.
You go from a state of answering regular questions, being engaged to work on projects and racking up consistent billable hours, to silence.
Before you get the call informing you that you’re dumped, jump on the phone and give them a call (not an email).
If there’s a problem, you need to know about it so you can fix it. If there’s no particular problem, then keeping in touch with a valuable client can’t hurt.
The next warning sign is when the client’s friends stop using your services.
If Joe Blow introduced John Doe and Joe tells you your services are no longer required, it’s a good bet John will be thinking of doing the same.
It may be too late to keep Joe on the books, but get on the phone to John and let him know his business is valued before he starts having similar thoughts.
Change can also be a lightning rod for clients to start thinking they might be better off elsewhere.
Common ones are where there’s been a substantial increase in fees, or a junior staff member is put on the client’s work and contact with the partner or senior staffer drops away.
Most clients will be happy with a new staff member becoming their point of contact if it’s being done to increase efficiency.
A client may not be happy getting a larger than expected invoice, but these things generally happen for a reason (hopefully a good one).
In both cases, the changes need to be clearly communicated.
A downturn in a client’s business may trigger thoughts about a client’s accounting fees and whether there’s a cheaper option.
Accounting fees aren’t a concern when businesses are making money and you’re saving them tax (which is one of the primary reasons you should offer advisory services), but when things slow down they become front and centre.
Ideally clients would use you as an advisor to stay on top of issues and avoid financial trouble altogether.
For clients who haven’t made the switch, you could cut your hourly rates but that would cannibalise your overall business.
Look at the total work you do for the client and consider whether parts of it can be done by the client, or made more efficient.
You’re probably better off cutting out some of the work you do for a client than lose them altogether or having to discount your bills.
You can also consider offering them payment terms to reduce the lumpiness of their accounting fees, but take care on the credit exposure you end up taking.
The failure of a large client with outstanding bills has crippled many professional services firms.
In looking at the situations where clients end up leaving, the lesson which bears repeating is the value of communication.
Clients are far less likely to leave if you operate on a ‘no surprises’ basis. Billing should be done regularly and unexpected increases clearly explained.
When making a change to the way you operate, tell the client why and outline the benefits for them.
If you can’t explain why a change is better for the client, then reconsider making it.
Finally, always remember the saying ‘work on your business, not in it’.
It’s very easy to get tied up on daily tasks, or the machinations of current projects.
Make sure you dedicate regular time for thinking about and talking to your clients.
This allows you to identify potential warning signs of an unhappy client before you get the phone call informing your services are no longer required.