Whether you are a start-up or a mid-level firm, established corporate clients are important year-round.
Acquiring a new customer can cost five 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.
Increasing customer retention by 5% can increase profits from 25-95%. Here are some ways you can improve client retention rate:
1. Personalize Communication
Clients today are perpetually online and connected. The medium you use for communication and how you go about it have 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 your client, taking a genuine interest, and asking insightful questions.
2. Pricing it right
Technology and “right-sourcing” has made our business operations faster and more streamlined. This allows previously time-consuming accounting services to be done in much smaller timeframes. With the resultant reduction in costs, you have more pricing flexibility with your clients, including fixed vs hourly pricing (which may give your 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 your firm to understand and consolidate client data, resulting in easy access to the most current information.
4. Cross-sell and up-sell
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%. Loyal customers/clients are seven times more likely to try one of your other services.
Increasing your customer base is the fastest way to grow your 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. Make sure your firm has an online presence across different websites and devices. Create your Google My Business profile. Websites like Yelp lend authenticity and often make or break your 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 your clients for specific referrals is very useful. One customer experience agency found loyal customers are four times as likely to refer to new clients.
7. Build referrals with other businesses
Referrals, however, don’t work just with clients. No matter if your 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 your clients might need that your firm doesn’t offer.
8. Be proactive
U.S. companies lose $136.8 billion per year due to avoidable consumer switching. Understand the different levels of service you offer and how many clients are required at each level to remain profitable. Juxtapose your client needs and your service offerings.
9. 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.
10. Leverage new technology
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.
Moving away from concerns of pure profitability, client retention is one of the best ways to measure how well your organization is providing its service. To break it down, CPAs with high client retention rates 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.