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8 REASONS FOR CLIENT CHURN AT ACCOUNTING FIRMS (PLUS PREVENTION TIPS)

GrowthYour ServicesStrategy


More often than not, you have greater control over your clients churning than
you think.

While not every client is worth rescuing, understanding the top reasons why
people change accountants is beneficial in ensuring you keep your best clients.


WHY REDUCING CLIENT CHURN MATTERS

Simply put, it’s expensive to replace your churned clients. In fact, it can cost
anywhere from 5 to 25 times more to acquire a new client than retain an existing
one.

Churn can be bad for your reputation, bad for staff morale and, if you’re
running a tight ship, bad for your bottom line. It’s a sound business investment
to spend time and energy reducing it.

Here are 8 reasons why clients churn, and what you can do at your accounting
firm to prevent your high-value ones from doing so.


8 REASONS WHY CLIENTS LEAVE THEIR ACCOUNTANTS (AND STRATEGIES FOR PREVENTION)


1. PRICE INCREASE

Simply reviewing and raising your accounting firm’s prices might be the one
thing that leads your clients to shop around for someone cheaper.

How to prevent clients churning after raising your prices

Some clients will inevitably leave if you raise your prices, but you can limit
those who do by clearly communicating the reason for your price increase. Even
if the reason is as simple as a seasonal adjustment. 

You don’t need to justify it, you just need to explain it.

And remember to reiterate the value you bring to them. Ensure they truly
understand the impact you have to their business.

> “You’re not selling accounting services, you’re selling certainty.”
> James Ashford, VP & Founder, GoProposal


2. YOUR FIRM HAS BEEN ACQUIRED OR HAS MERGED WITH ANOTHER

Naturally, people are afraid of change. Particularly if they don’t understand
it. Chances are that if your firm is involved in M&A, your clients will have to
deal with changes to:

 * Fee structures

 * Technology

 * Workflows

 * Personnel

This might be enough to overwhelm them, leading them to search for another
accountant or bookkeeper.

How to prevent clients churning after your firm has been acquired or has merged
with another

As early as you can, communicate with your clients. Even if you don’t have all
the answers as to what they can expect, let them know to expect some change. 

And if your situation allows, reiterate the things that won’t change—their
normal point of contact, for example. This will provide them with some certainty
and ease some anxieties.

Recommended reading: The 3 keys to navigating change in your accounting firm


3. YOUR CLIENT’S BUSINESS HAS TAKEN A HIT

Partnerships gone bad. Economic downturn. Natural disaster. Robbery. Whatever
the downturn, for some clients, it might be make or break. And that might mean
they think they can’t afford your services.

How to prevent clients from churning due to financial struggle

Retaining your clients when they’re struggling is all about communication and
negotiation. 

If they’re in financial trouble, they need your support. Of course, depending on
the situation, they might not think they can afford your support. That’s where
negotiation comes into play. 

Find a happy medium, where you’re supporting them during this time but not at
the detriment of your own business.


4. YOUR CLIENTS ARE FRUSTRATED THAT YOU CHARGE FOR EVERYTHING YOU DO 

Sometimes, clients want something now. They might think it’s a simple request,
but in reality, it takes time and resources to compile. Naturally, you’d want to
charge for that billable time, and given how simple they think the request is,
your clients might not want to pay.

How to prevent clients from getting frustrated that you’re charging for billable
work

Communicate that to complete their request, you need to divert resources from
other billable tasks, and as such, you need to charge accordingly. If they don’t
seem to understand or accept that, then perhaps it’s time to let them go.

Recommended reading: How to turn a tough client into an ideal one


5. POOR CUSTOMER SERVICE OR A MISSED DEADLINE

Sometimes, things go wrong. When you’re handling people’s livelihoods, errors
can be costly.

How to prevent your clients from churning due to a poor experience

Depending on the situation, your clients may have lost trust in your accounting
firm. While you can’t undo the past, you can move forward and work towards
rebuilding that trust. 

Communication is key here. Help your clients understand:

 * What went wrong

 * Why it went wrong

 * The steps you’ve put in place to ensure it doesn’t happen again


6. RELOCATION

If you or your clients relocate, it might seem natural to them that they need to
find another accounting practice that is local. But you no longer need to be in
the same town, city or state as your clients to bring them the value they need.

How to prevent your clients from churning due to relocation

As long as you have the technological infrastructure to operate digitally, you
can maintain client relationships if either you or your clients relocate. You
just need to make sure they understand that.

Recommended reading: 10 tools for remote team collaboration


7. LACK OF SERVICES NEEDED AS THEY EVOLVE

You might have started working with some of your clients when their businesses
were in their infancy—before employees, before an office, before the owner was
receiving a salary, and sometimes, before an actual product was being produced.

But with your support over the years, their businesses are growing—they’ve
employed staff, added new products, expanded their geographical reach, and
they’re ready to take the next step. 

But if that next step requires a service you don’t offer, they may search for
another trusted advisor.

How to prevent your clients from churning as their businesses evolve

Just like your clients’ businesses are evolving, consider diversifying your own
service offering. 

For example, you may notice multiple clients expressing the need for an advisory
service you don’t currently offer, like HR advisory. If you can justify the
costs and training associated with adding this service to your firm, it can help
you retain your clients as they grow and mature.


8. THEY THINK THEY GET MORE VALUE ELSEWHERE

People talk. Your clients network with other business owners, and perhaps
they’ve heard about someone else’s relationship with their accountant, including
fees and services offered. And maybe they start thinking they’re not getting
enough value from your firm.

How to prevent clients from churning as a result of perceived value elsewhere

A great place to start is by having a frank conversation with them. Understand
their pain points, where they’re feeling a lack of value, and exactly what they
expect to receive from another firm.

This conversation might uncover information that your client hasn’t shared with
you, such as their desire to grow their business in a particular way. Without
that information, chances are that your service offering to them wasn’t specific
enough. But now that you’re informed, you can adjust accordingly and provide
them with what they need.

Recommended reading:Why communication is the most powerful tool for your
accounting firm


COMMUNICATION IS KEY IN PREVENTING YOUR CLIENTS FROM CHURNING

More often than not, a conversation is the difference between losing a client or
retaining their business. If you think certain clients are unhappy or are
shopping around, book a time to talk with them to make sure:

 * You’re meeting their expectations (and they’re meeting yours)

 * They understand the value you bring

 * If and how their situation has changed since you last spoke

When you recalibrate with them, you’ll be better-placed to strengthen your
relationship. At the same time, a recalibration might not be possible—in that
case, it’s time to part ways. And that’s okay.

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