Take a different look at your firm

Traditionally, accounting has been a profession built around production. We talk about being a service industry, about delivering professional services, about client service, but much of the strategic and management dialogue is about getting stuff done. The talk is of deadlines, the number of returns still to be processed, recoverable hours.

We plan our resources based largely upon the amount of work we have to do, and that work largely composes of products: accounts, tax returns and so on.

I talk a lot about client service and client experience, about putting the client at the heart of your firm, but how far can we take that thinking?

Each one of your clients has a lifetime value for your firm, the total amount of fees that they will be charged during their time with you as a client plus any additional value they bring in such as referrals.

It’s a simple equation:

No. of years as a client x (Annual fees + referral fees) = client lifetime value

We can increase the lifetime value by increasing any or all of these three elements. There is a perceived challenge though in that increasing annual fees can (and occasionally does) have a negative impact on the other two.

Don’t misunderstand me, I’m not advocating that you don’t put up your prices, most firms still undervalue themselves. However, to avoid any risk, it highlights the fact that we should be looking for opportunities where we can increase our annual fee to a client whilst also increasing their satisfaction, hence boosting both their loyalty and their referrals.

As you review your client relationship each year with a view to planning how you will manage them the following year (you do that, don’t you?), what you should be thinking about is not simply the price of the accounts and tax return but what service or advice can you bring to that client that they will perceive as of real value and how can you deliver it so that the value stands out.

This doesn’t have to be clever stuff. The client struggling with their time management and financial control will value you taking over their bookkeeping in 21 ^st century fashion ( I hopefully don’t need to explain!).

Linking what you plan to charge to the perceived value of the relationship not only personalises your service better (because it gets you thinking proactively about each client) but it has a multiple effect beyond the one year by extending the client life and referral capacity.

Worth thinking about?