In Practice
Enhancing Client Relationships
By Mark Lloydbottom
Sep 15, 2009 - 9:50:53 AM

Gold Medal Client Service

The marketplace for accounting firm services is more competitive than ever and a recent survey has confirmed that professional firms are being affected by the deteriorating economy. As competition for new clients increases so too does the need to ensure that existing clients remain successful, loyal and customers for compliance and non-compliance services. Times are challenging; but with every challenge comes opportunity.

I have probably asked more than a thousand accountants, “How long do you spend with an ‘average’ client in a year?” The answer is usually somewhere between 90 and 150 minutes. However, most agree that this time is spent working on compliance, with little time directed toward service on planning and problem issues.

Some years ago a study identified the key components of client service from the point of view of both the practitioner and the client. Practitioners considered the components of client service to be focused on the technical aspects of service, while the client was more interested in matters related to timeliness, responsiveness, relevant advice and availability. It is evident that clients assume technical capability and place a greater emphasis on how they are served and the advice they are given. It is also evident that accountants could do more to recognise and address client needs.

Here is a selection of strategies designed to help you deliver a gold medal service:

Do you use agendas?

Do you prepare clients for their meeting with you? Does the client know what will be discussed? The purpose of an agenda is to manage expectations regarding the scope of the meeting.

As you can see from the sample, this meeting is going to cover a range of compliance and planning matters. Start your meeting by asking the client if there is anything they wish to add or delete. The agenda informs the client regarding the information required to finalise your current assignment and allows you both to give thought to areas where advice and service may be needed.

Sample Agenda

Year under review (compliance work)

• Review accounts and clear outstanding queries
  
• Review expenditure to confirm that all expenses that can be claimed have been included
  
• Review our benchmark analysis and industry trends

Your current year (current issues)

• How is the business currently performing?
  
• What challenges do you see in the future?
  
• How are the results-to-date compared to budget? (Does the client have a budget; do they need up-to-date management accounts?)
  
• How do you see the business developing?

Personal matters — (planning)

• With the increase in your overall net worth there is now a greater liability to estate taxes. Ask, “Would you be interested in strategies to reduce your estate taxes?” Or, if the client has children and has no Will, “Do you know what will happen to the children if you both die? Who will look after them?”
  
• “We all hear about the pensions deficit and the importance of investing for the future. I believe a good business owner should be financially independent of the business by the time they are 55. “Have you considered what income you will need in retirement when the children have left, the mortgage is repaid, and you have more time to pursue other interests?”

Do you survey clients continually?

When did you last survey clients? Maybe you have conducted a survey, gained some benefit, but not found the time to repeat the process. If hotels and others can testify to the advantage of regular customer feedback, why not accountants?

Benefits of a continuous survey approach include:

1. Finding out sooner rather then later when clients aren’t happy ? Follow up to address their concerns
   
2. Identifying the additional service needs now ? Can you meet these needs?
   
3. Discovering where clients think the firm could improve ? What action should you take?
   
4. Giving clients an opportunity to refer ? Remember to thank them

How to institute a continual survey? Options include involving your receptionist in asking clients to complete a survey while they are waiting or including a survey with either the accounts or the tax return letters (remember to include a reply paid envelope).

Key Action: Decide how you will solicit continuous feedback.

Billing is a key component of service

How many products or services have you purchased recently without knowing the cost?

The answer may well be, none or only a few. We all want to know the cost of a transaction and yet many clients can only hazard a guess at the cost of the service until the invoice arrives.

An increasing number of firms now agree fees in advance thus assuming the time-risk, whereas a time billing approach generally leaves the client assuming the risk. Time-billing might be tried and understood, but in reality it is a system that tends toward rewarding inefficiency. Am I advocating ‘value billing’? No, but understand that every bill is judged by clients on the basis of value.

Key Actions:

1. Bill clients promptly while the ‘tears of appreciation are moist in their eyes’. If your WIP exceeds ten percent of your annual fees, there is an ever-increasing time gap between the client’s delight in the service they receive and the payment for it. If your WIP exceeds that level, complete the work and bill it. As a general rule WIP depreciates two percent for every month it remains unbilled. Billing promptly avoids your WIP further depreciating.
2. Agree the fee in advance
3. Have managers do the billing
4. Use fixed pricing

When will the accounts be ready?

When we take a car in for service it is normally returned later that day after four to six hours work. Order a meal in a restaurant - how do you feel if you are kept waiting more than 20 minutes? We live I an era where we expect ‘continual service.’ Compare the number of hours taken to complete a job with the total number of (working) hours for which the work is in your hands. Many firms take an average of seven to nine weeks to complete accounts that take only days or a week or so to complete.

Key Question: Do you know your firm’s work performance? What will it take to speed it up?

Developing advisory expertise

Clients’ interest in our compliance may well be limited. When you meet clients they momentarily leave behind the world of their present responsibilities to attend to your requirements and service. If compliance is the main course, what are the desserts?

What is on your firm’s service menu? What have you learnt in the last year to make yourselves more valuable to clients? Take a longstanding client; are you still bringing fresh wisdom, ideas and insights to the table? Clients expect us to handle their affairs competently and professionally, but what about the dessert; how extensive is your own service menu?

Key Question: What can you study to bring more service options to the table? Management, marketing, strategic planning, IT, HR, succession planning, turn around and so on?

And finally

The outcome of enhancing client service should be happier clients who will pay their bills more happily and promptly, recommend your services with enthusiasm to their contacts and ask you to perform additional work. Clients will be less likely to leave and will become Clients 4Life.

Mark Lloydbottom
www.marklloydbottom.com

Mark will be presenting two slots on our Practice Development Conference 24th September 2009 in the Clarion Hotel Liffey Valley. See here for further details. Mark is a consultant to accounting firms and co-author of Clients 4Life, available from marklloydbottom.com.

Visit www.omnipro.ie for further details.

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