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They walk for many reasons, including some that are preventable. Here are some war stories, warning signs, and what you can do to retain clients.
Poor service, change in ownership at your firm or at the client's company, perceived lack of expertise, dissatisfaction with fees: The reasons may vary, but the results are often the same. Clients walk.
Robert Fesnak, A&A partner with the Devon, Pa.-based firm Smart and Associates, LLP, believes most firms lose clients simply "by not servicing their needs. Accounting firms tend to view their services as only audit or tax compliance," he notes. "They don't address the real needs of their clients."
Consultant Jay Nisberg of Jay Nisberg & Associates says the world of client service has changed in the last 20 years, and accountants have fallen behind. "It used to be common for a CPA firm partner to have clients to their home for dinner, and do breakfasts with clients. For some reason, the profession has lost its concept that this business is still a matter of personal relationships."
Allan Boress, president of the consulting group Allan Boress and Associates, agrees that the profession has grown complacent about client retention. "Most CPAs will tell you the reason they lose clients is fees. But the number-one reason is lack of communication and lack of responsiveness," Boress says.
Causes for Exit
Most agree on the common reasons for losing clients. Pat O'Malley, MP at the Chicago firm of Coleman, Epstein, Berlin & Company LLP, says, "First is some capital event, such as an M&A, or new decisionmaking personnel, where the acquiring company's relationship exists with another accounting firm. Second is poor service. This usually manifests itself in the areas most visible to the client: poor communication or untimely service."
Fees may actually not be that important to clients, though this landmine subject does sometimes surface when clients walk. Admits Fesnak, "We've also lost clients due to fees, where the client's only criteria in selecting a firm is price. Clients leave more often due to a perception that the accounting firm doesn't have an interest in, or an understanding of, their business, rather than any other reason, including fees."
John W. Dean, of the firm of Heard, McElroy & Vestal, LLP,...