In the highly competitive industry of accounting, client retention is extremely important to maintain an edge over competitors. Gaining new clients is costly and requires more time and effort than retaining clients.
Not every firm understands the importance of client retention. It’s estimated that it can cost up to five times as much for a business to gain a customer compared to retaining an existing one. While increasing customer retention by just 5% can increase a business’s profits by as much as 25-95%.
You must have clear strategies that you can implement into your accounting business to improve your client retention.
Good customer relationship is basic to a business. Good customer relationship translates to customer retention.
Effective Client Retention Strategies in Accounting Firms
Communicating clear expectations with your clients helps avoid any surprises or errors. If you’re at the beginning of a relationship with a new client, having every aspect of your services laid out is helpful. The more you know about your clients, the easier it is to engage with them.
Accounting firms and CPAs that can deliver end-to-end accounting services are far more likely to retain their clients than CPA firms that offer partial services. Businesses and clients will be comfortable outsourcing their accounting requirements to one firm rather than handling two or more firms. It will be easy for firms to maintain continuity if the same accounting firm delivers accounting and reporting. Hence, make your firm capable of delivering all the services. Provide valuable services but don’t push your services they don’t need.
Accounting firms need to speak regularly with their clients. You will be provided with valuable insights into what parts of your service your clients enjoy and why they continue to trust your firm with their business. If you can ask clients who have left your business their reasons for doing so, you’ll uncover their reasons. You can use this information to work on the areas causing customers to churn and further improve your business.
Clients today are more online and connected than ever before. The medium you use for communication has a noticeable impact. Try not to spam their inbox with unnecessary emails.
Referrals are also very helpful. No matter if the clients are mid-level firms or start-ups, they will need services you don’t provide. Building relationships with others will be a mutual source of new clients. If a client has been working with your accounting firm for a while and you’ve built a strong relationship with them, the chances that they’ll refer you to another client are high. Keep your existing customers happy and they’ll be eager to refer you to another client that could benefit from your services.
If you want to stay ahead, you need to stay updated. Staying up-to-date with the latest developments in software and services, including tax return preparation outsourcing, might benefit your business. Client retention rate strongly affects profitability. Tracking it helps you understand how business decisions affect that rate.