Every client comes with an overall lifetime value, which is basically how much revenue your firm can expect to receive from each client over time.

When clients leave, the money lost can add up quickly and it is generally a lot more expensive to bring in new clients than to retain current ones. The general rule of thumb is that it costs five times more. Client acquisition costs businesses in the United State an estimated $137 billion every year, and while it is not always so easy to switch accountants, American Express found that 33% of people would consider switching companies after just one instance of poor customer service. These losses are often avoidable and that is where strategic client management comes into play.

Strategic client management is the process of being intentional about every phase of a client’s experience, with the goal of building longer-term beneficial relationships. In parallel, it requires accountants or other consulting practices to optimize a firm’s internal processes to save time and increase production.

There are four main aspects to strategically managing clients for accounting firms, including:

  1. Onboarding new clients
  2. Expanding advisory services to existing clients
  3. Implementing the right technology
  4. Streamlining communication and collaboration

Your client management strategy should increase client retention while being as efficient as possible. Providing the ideal client experience also includes implementing effective technology.

Client Onboarding

Onboarding is the strategic process of preparing clients to work with your firm. It generally starts with an initial meeting where both parties decide if the relationship will be a good fit. This is also the moment to set clear expectations about your services and how you communicate with clients.

This process is important because it serves as a starting point for your relationship where expectations can be set on both sides and you can get to know your customer’s unique needs.

Expand advisory services to improve retention

Building advisory services into an accountant’s scope of work is becoming increasingly common and will rapidly become an important aspect of any accounting firm to remain competitive. Currently, more than 50% of accounting firms offer client accounting advisory services (CAAS) and the market is expected to grow from $544 billion to $736 billion by 2025.

Implement the right technology to optimize processes

Accounting firms have been a bit slow adopting technologies like Practice Management and Tax Resolution software. However, as platforms have moved to the cloud, it has become much easier to transition. Technology, tax laws, and client expectations are constantly evolving, and there are clear expectations from clients for streamlined communication and easy access to documents.

While many accountants may not be familiar with comprehensive accounting software, there are options available that are very intuitive and user-friendly.

With an effective technology solution, you can – among other things – provide exceptional customer service, always have a clear understanding of each client’s status, and keep your employees on the same page. Technology can also be a great way to streamline your internal processes and encourage proactive client contribution. Firms that have deployed practice management software are able to save a significant amount of time to reinvest in building their businesses with additional clients or offerings like advisory services.

Streamline communications to reinforce client relationships

To have a smooth running firm, it is essential to make it easy for your client to provide all the necessary documentation on time. There are a number of ways to enhance client communication, including:

  • Offering a secure file storage solution
  • Setting up an automatic request reminder system
  • Proposing an easy-upload portal

These are all tools that help support a connected client experience but technology is not a one-size-fits-all solution. Perhaps one streamlined solution responds to your needs or multiple plug-ins and applications are best for you. However, investing in the right solutions will absolutely provide a positive impact for both you and your clients.

Regardless of what your client management strategy looks like, it should be at the heart of everything your firm does. Just as you remain flexible around new tax laws, it is necessary to remain flexible as client expectations change and new technology comes on the market. Client retention is all about the right mix of relationship management, technology, and quality service. Finding that sweet spot will inevitably result in great relationships and a growing firm.