As businesses enter a new year, many are looking to grow their clientele. However, before increasing marketing spending, firms should consider investing in strengthening their client relationships to reduce client losses and keep their most valuable assets. In fact, firms have greater control over client churn than they think.
Understanding why clients change firms is beneficial in keeping the best clients. It is expensive to continue to replace clients, as it takes time and resources that most firms are tight on. Companies that focus on customer retention experience significant benefits, such as boosting profits by 25-95% by increasing customer retention by just 5%.
Client churn costs more than just revenue; it damages a firm’s morale and can be bad for its reputation. Reducing client churn should be a top priority for any accounting firm.
Here are eight reasons for client churn and what firms can do to prevent high-value clients from taking their business elsewhere:
- Price Increase: An increase in firm rates will cause any client to shop around. Prevent clients from churning due to price increases by being more specific about your services. Most clients want to know if the price increase is worth the value of the service they receive. Consider providing service tiers and allowing clients to choose.
- Firm Acquisition: Clients are usually afraid of change, especially with their finances. Early communication is critical in the case of an acquisition, even if you do not have all the answers. Focus on the things that will not change to provide clients with some certainty and ease their anxiety.
- Financial Struggles: When clients can’t afford accounting services, they can’t afford it. In times of need, communication and negotiation are essential to a firm’s stability. Find a happy medium to continue providing service but not to the detriment of the firm.
- Feelings of Being Nickeled and Dimed: Let clients know upfront of your billing process, and if a request falls outside their service tier, let them know of the additional charge and ask if they would like to proceed.
- Poor Customer Service: Owning a mistake is the quickest way to begin rebuilding trust. Quickly let the client know what went wrong, why it went wrong, how it will affect them, how it will be corrected, and the safeguards put in place so it will not happen again.
- Relocation: Today relocation should never be a concern. Ensure you have the infrastructure to operate digitally, providing clients with access to the financial data they need 24/7, no matter where they are.
- Needs Not Met: Listen to clients’ requests and keep current on what other firms offer. Implement and deliver them to your clients if it makes sense financially.
- Lack of Value or Cheaper Elsewhere: Improve your client’s education of your service and value. Regularly visit with each client about your service offerings and the value you provide. Get specific and let them know that their finances are your business and you are there to help them achieve their goals.
Communication decreases client churn. Don’t hide from the awkward conversation if you feel a client is frustrated or looking around. Call them up and have a direct conversation, asking if their needs are being met, what value you bring to their business, and if their situation has changed since you last met. Taking the time to realign with them will strengthen your relationship and increase their perceived value of your firm.
In conclusion, reducing client churn should be a top priority for any accounting firm. These suggestions will not eliminate client churn, but implementing them will create openings for the right clients to fill. Firms have greater control over client churn than they think, so investing in strengthening client relationships is crucial for the growth and success of any business.
Reach Reporting can help accounting firms reduce client churn and improve client relationships by providing a platform for clear and effective communication of financial information, no matter where the client is located. By increasing the value of financial reports, reducing the workload on accountants, and improving customer service, Reach Reporting sets itself apart from competitors and helps firms retain their most valuable assets: their clients. With Reach Reporting, accounting firms can stay ahead of the curve in client retention and provide top-notch service to their clients, helping them to succeed and grow their businesses.