Most firms have high retention rate per client. That means their clients stay clients of the firm for a long period of time. Somehow the Accounting profession has got most of their clients bluffed that it is hard to change Accountants. It’s actually not.
Partners will argue that clients remain with the firm because of the great relationship they have with their clients. I beg to differ. How can you have a great relationship with someone when you see them once or twice per year?
Imagine what your relationship would be like at home if you only saw your life partner once or twice per year? For some of you reading this it would be better!
I do not think retention rate is high because of great service, relationships, value for money or services offered.
I think retention rate is high because the Accountant knows about the clients financial affairs.
The reason Accountants have high retention rate is because of financial intimacy.
Most people do not speak openly about their financial affairs – it’s a very private matter. And if they only speak to a couple of people about a very private matter a lot of trust is built up. Not relationship – trust.
Your clients trust you to not tell others. So they don’t leave.
However, the real measure is how happy they are to be a client of your firm. I think that metric is based on the number of referrals you receive each year per client. If you divided the number of referrals (enquiries) you get annually into your total client base this will give you a startling reality of how happy your clients actually are.
Now the flip side to that is they want you all for themselves and they do not want to refer! Possibly.
Focussing on building relationships (retention rate strategies) is not about increasing the retention rate number (it’s already high), it’s about making memorable experiences with existing clients so they buy more from you and refer more to you.
You should be aiming for a retention rate of 95% and at least 1 referral per client per year.
I have written an extensive report on Accounting firm performance. You can download the full report here.
Enjoy video # 10.