By Rob Nixon
If a client pays you a high fee do you communicate with them more? Absolutely, you say.
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Should you wait for them to pay you more before you communicate with them? Or should you communicate with them more before they pay you more? I think the latter should apply.
If you increase the level of communication then you’ll increase the level of trust. If you increase the level of trust you’ll increase the level of relationship. If you increase the level of relationship you’ll increase the level of fee per client. If you increase the level of fee per client you’ll increase the referral rate. If you increase the referral rate you’ll increase the happiness level. If you increase the happiness level then everything is sorted!
It all starts with increasing the level of communication. How much communication and in what format is the key. After years working with accounting firms and their clients I have worked out that the diagram below is the ultimate communication schedule. It should be applied to all clients you want to keep.
- An annual general meeting
- Visits to see how they are going
- Phone calls and sporadic communication
- Not charging for “attendance” communication
The Annual General Meeting
Every year you finalize the annual accounts for your client. What is your process at this point? Is it all of those inane “sign here” stickers with little or no explanation? Do you send out the draft accounts for signing?
My guess is that the majority of your clients get a substandard explanation of the previous year’s financial performance. As a business client I have two main questions at year end:
- How much tax do I have to pay and why and
- Where did the money go?
If you are glossing over this then you are missing out on loads of opportunities. You are missing out on great customer service and potential revenue opportunities for you.
I recommend that you have an AGM process. This happens once per year. Of course all of the signing needs to take place but more importantly explanation needs to take place.
When it comes to #clientsunderstandingwhatyouhavedone, typically the reports that come out of your tax preparation software are not that great. If you just send it to us then we don’t understand it. It’s full of numbers and words that confuse us.
The accountants we work with are using a different process. They are adding a business performance review, which is a three-part historical review of the clients’ financial affairs in one easy-to-view screen. They are using our PANALITIX (www.panalitix.com) software to do this.
The business performance review is a conversation starter. It shows trends, issues and opportunities in critical areas of a business. It is designed to be simple so the clients can see what is going on. It is presented on a screen (the bigger the better) and of course you can print it out. You can do some financial modeling and “what if”-based analysis. It typically results in the clients saying “how do we fix it” – or words to that effect.
The objective of this meeting is to
- understand their current situation fully (by knowing the numbers and asking questions),
- understand their objectives going forward (by asking questions) and
- have a discussion about how you can help them get there.
This AGM meeting should be conducted with every business client you want to keep. Never charge for this meeting. It’s on you and it’s a value-adding opportunity, and who knows, you might win some more business from it. As a minimum you’ll give some great customer service.
All clients love it when you visit them at their place of business. Most do not do it enough and some accountants do not do it at all. If you don’t do it you are missing out on massive opportunities to add value and create new business from existing clients. I used to call this meeting a “nurturing” visit. A few years back I changed the terminology to a sales visit.
The purpose of the meeting is to understand your clients’ current situation more, understand their short- and long-term objectives and see if you can help them achieve their objectives. It’s a sales meeting. At a sales meeting you do not want to leave anything to chance. You need a systematic approach to the meeting so you can get a predictable outcome.
This is my 12-step meeting approach:
Step 1. Make sure all of the decision-makers are at the meeting.
Step 2. Set the scene why we are having the meeting – the client is wondering.
Step 3. Frame the meeting’s purpose and time frame of the meeting.
Step 4. Understand the “now” by asking a series of background-related questions.
Step 5. Understand what the clients’ goals and objectives are – what they want to achieve.
Step 6. Ask how they would know if they have achieved their objectives.
Step 7. Ask what it would mean to them if we helped them achieve their objectives.
Step 8. Ask what their current plans are to achieve their objectives.
Step 9. Ask what the consequences are of not doing something different.
Step 10. Ask timing-related questions – when they want to get started to achieve their objectives.
Step 11. Tell the client the next steps – write a plan to achieve objectives with options to take.
Step 12. Book the next steps – another meeting to clarify details or getting started date.
I want to focus on steps 2 and 3 of my 12 steps. They are crucial to setting the scene for the meeting – particularly if it is the first time you have done it. Here’s what you say to put their mind at ease and frame the meeting:
“You’re probably wondering why I am here. First of all there is nothing to worry about and as (admin person’s name) would have told you there is no charge for this meeting. The reason I am here is that I feel, as a firm, we have been neglecting you. All we have really offered you in the past has been basic compliance services. We’ve always wanted to offer more and the reality is, due to excessive compliance work, we have never really been a position to offer our other services that really make a difference to your profit, cash flow and overall wealth.
“To rectify our errors and to make amends, for the past few months we have been creating capacity so we can get out and see clients, understand their business more and, if appropriate, really help them achieve greater results in business and in life.
“So this meeting is an exploratory meeting to really understand your situation / business and really understand what you want to do in the future.
“Did (name) say it would take this (X amount of time) – are you still OK with that?”
And then you go into the meeting understanding their situation more and importantly the clients’ objectives.
Don’t be in too much of a hurry to tell them all the answers. You’re going to sell them the answers in a written implementation plan. Make sure you have meetings back to back and you stick to the allotted time, which is typically around 90 minutes.
Client meetings need to happen at least every six months. If you are a typical partner of an accounting firm then you’ll have around 120 business clients. That averages out at 20 per partner per month on average.
Proactive phone calls
Over a two-year period I interviewed 1,077 business clients on behalf of 126 accounting firms. There were approximately eight clients per meeting in a “client advisory board” format. The questions to the clients were primarily around what they like, don’t like and what they would like to see improved or added if they were running the firm. The partners were not in the room and I would give a report after the meeting.
One of these meetings stood out. I got to the “improvement of service” question when a paint retailer named Barry said the following:
“I would love it if the partner who looks after me, Greg, would phone me up from time to time and ask one simple question – how’s business? I would tell him what is going on and who knows there could be an opportunity for Greg to help me and win some more business from me.”
This happened in a recorded meeting from a client! They want you to call them, send emails, letters or useful information pieces. How often are you proactively calling them with no agenda? I think for the clients you want to keep, you should call three or four times per year. You don’t even have to speak with them. You could leave a message and say you’re just checking in.
Ever since that client advisory board meeting I have been promoting proactive phone calls with a “how is it going?” agenda. The accountants who do it are creating better relationships with their clients.
Not charging for communication
I still find it bizarre that accountants want to charge for phone calls and meetings. I know of firms that have wanted to charge clients for receiving newsletters and travel time. I don’t think there are too many (unlike your legal colleagues) who still charge for letter writing, courier fees, faxing and other meaningless “disbursements.”
Think about it. You want to build a better relationship with clients and building a relationship with a client takes communication. And you want to charge for communicating with them. What the…?
Imagine if you are a client who knows you charge for phone calls and meetings. Guess what? They will only call you when they absolutely have to. And they will want to keep the conversation short and not get involved in “small talk” with the fear of being charged for the chitchat. What a wasted opportunity to find out what the client really needs. What a wasted opportunity to find out the client’s deep problems and hidden opportunities.
The successful firms who are smashing it with growth are not charging for phone calls, emails and quick meetings. In fact they are telling the clients that they do not. They are using this as a differentiator against other firms.
Imagine if you get a call from a prospective client where they ask, “What are your charge rates and how do you charge?” There are two ways you could answer that question:
Option 1: “We charge by the hour for everything we do and the price per hour is dependent on who does your work. If you use the graduate they are $120 per hour. The senior is $160 per hour. The client manager is $220 per hour and as the partner I charge $350 per hour.”
Option 2: “Thanks for asking. Here at XYZ we don’t have charge rates and as such we don’t charge by the hour. The vast majority of accounting firms charge a graduating fee based on the skill levels of the people they use. They also typically charge for every phone call, email and meeting as well. We don’t charge you for any of that. We charge you a set fee on each project that we agree on together before the project starts. Included in every project are unlimited phone calls, emails and meetings for anyone who is working on the project. That way there are no surprises with the fee and no barriers to doing business with us. We want you to call or email us as many times as you need throughout our time together. We think that is a fairer way to do business for you.”
As a client of an accounting firm, give me Option 2 any day. I have certainty of price and there are no barriers to picking up the phone or shooting off an email. Most partners of accounting firms think that clients will abuse the privilege. Let me assure you they will not. Even if you do not currently charge for phone calls, emails and meetings you must tell the clients. They think you are like every other accounting firm.
The same goes for low-value seminars, client advisory board invitations and social media. I know of some firms who want to (and sometimes do) charge their clients to attend their annual Christmas party. If the seminar has value then by all means charge. If it is a sales pitch then don’t charge. Client advisory boards are an awesome way to communicate with clients. Social media is a tool to communicate with clients.
Stop thinking like a labor hire business where you have to charge for every interaction and minute on the clock. It’ll keep you in the poorhouse.
For you to remain relevant and thrive you’ll need to dramatically increase the communication levels with all of your clients. Communicate a lot first. Increase the fee levels later!