Whether you are a start-up or a mid-level firm, established corporate clients are important year-round.
According to Amy Gallo, a management expert, and consultant, in her article on the Harvard Business Review, acquiring a new customer can cost 5-25 times more than retaining an existing customer. This is not to say that going out and getting new customers is not advisable, but if a majority of those clients are around for a longer life cycle, a revenue base can be built that is more profitable and predictable. She also adds that increasing customer retention by 0even 5% can increase profits by a whopping 25-95%!
Here are some ways you can improve client retention rate:
1. Personalize Communication
According to McKinsey, personalized communications yield 20% higher customer-satisfaction rates, a 10-15% boost in conversions, and a 10-20% reduction in marketing and sales costs.
Clients today are more online and connected than ever before. The medium you use for communication and how you go about it has a noticeable impact. Flooding their inbox with generic mails just doesn’t work anymore.
The one-size-fits-all approach has now evolved to understanding the specific needs of the client Accounting Services, taking a genuine interest, and asking insightful questions.
2. Pricing it right
Technology and “right-sourcing” have made our business operations faster and more streamlined. This allows previously time-consuming client accounting services to be done in much smaller time frames.
With the resultant reduction in costs, there can be more flexible with pricing, including fixed vs hourly pricing (which may give clients more budgetary predictability).
3. Obtain a single unified view of the client
Coming off the end of the celebration and splurging is the tax season. Every financial year brings a whole new set of facts and figures as well as new client requirements. As a CPA firm, being able to help the client requires being equipped with the right information.
This can be obtained by asking the right questions. However, a client’s data should not be spread across different departments. This makes follow-ups and even normal interactions challenging, and sometimes even embarrassing.
To avoid this, make sure pertinent client information is available in a single, unified platform for easy access. This will allow CPA firms to understand and consolidate client data, resulting in easy access to the most current information.
4. Cross-sell and up-sell
According to Patrick Hill, a serial entrepreneur and a contributor to Forbes, the success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
Increasing the customer base is the fastest way to grow a business and the most obvious way to reach short-term revenue goals. A prospective client may not like what is being offered.
In that case, understand their needs. Understand. Personalize. Sell.
However, up-selling or cross-selling to an existing customer can sometimes prove more lucrative than what you will make on a new client.
5. Maintain an omnichannel presence
Nowadays, clients use online resources more than ever. Therefore, it is imperative that CPA firms have an online presence across different websites and devices.
You can start by creating a Google My Business profile for your CPA firm, and using websites like Yelp to lend an authenticity that can often make or break a business with real-time reviews. Social media reviews are also incredibly helpful. Pay attention to these reviews and address them when needed.
6. Ask for referrals
However, the internet isn’t the only place for referrals. Asking clients for specific referrals is very useful. One customer experience agency found loyal customers are four times as likely to refer to new clients.
Referrals, however, don’t work just with clients. No matter if the clients are mid-level firms or start-ups, they will need services you don’t provide. Building relationships with other businesses (e.g., lawyers, financial planners, etc.) will be a mutual source of new clients.
The best way to go about this is to maintain a list of referrals for anything that your clients might need that your firm doesn’t offer.
7. Be proactive
U.S. companies lose $136.8 billion per year due to avoidable consumer switching.
Therefore, it is vital for the management to understand the different levels of service offered and how many clients are required at each level to remain profitable. Juxtapose your client needs and your service offerings to get clarity and initiate the action plan.
8. Tone down the technical jargon
Financial matters are intimidating enough without adding accounting jargon to them. Speaking simply helps connect on a personal level, improving trust. This is supplemented by responding ASAP and treating each client as your most valued.
9. Leverage new technologies
If you want to stay ahead, you need to stay updated. Keeping abreast of the latest developments in software and services that might benefit your business is imperative.
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Moving away from concerns of pure profitability, the client retention rate is one of the best ways to measure how well your organization is providing its service. To break it down, CPAs with a high client retention rate are doing such great work that their clients realize they would be worse off without them.
Looking for help in transforming your accounting firm? Reach out to us.