In recent years, CPA firms have made an effort to hold partners more accountable on many levels, including realization and productivity. When I began reviewing those areas for various clients in my own firm a few years ago, I found that realization and relationships correlate. The clients with whom I had good relationships were the ones that most valued what I do for them. They understood the contributions we made to their business and weren’t focused on price as a determining factor. I also noticed they were all clients who had been with us for a long time.
There was another group of clients with whom I did not have a strong relationship. It seemed those clients saw the work our firm performed as a commodity. Assuming any CPA can do what we do, they were always looking for the cheapest price.
I also looked at the clients we lost due to price or service. In most cases, we never established a good relationship with these clients. In other cases, the problem was that we had been close to the client but we failed to appropriately transition the client relationship when there was a change in our firm, such as a partner transferring to another office. That reinforced my belief in the value of personalized service and the importance of holding firm members accountable for practices and procedures which benefit the firm.
What Makes a Relationship Work?
Most CPAs strive to have good relationships with their clients, but what does that really mean? In my mind, if you’re just calling a client once a year, you’re doing nothing more than managing an account. At its most basic level, having a good relationship means we know and care about each other. It’s based on more than just an occasional, casual telephone conversation. At our firm, we keep up with what’s going on in our clients’ business and personal lives, because both can impact the way we provide the services the clients need. Not only do we stay in touch, but we are truly concerned for the wellbeing of the client. How do you make this kind of relationship work?
- Be sincere. Your clients will key in if you really care or not.
- Train your team. It’s a tough job to train your staff on relationship building, because even though it’s extremely important, historically our profession has emphasized technical expertise not soft skills. Methods our firm has used to train our team include bringing in a consultant to talk about generational differences so our team understands the significant gaps in background and expectations between baby boomers, Gen X and Millennials. We’ve also involved our younger team members in the Georgia State Society’s Leadership Academy and we are a member of an association that provides soft skill training. In addition, we’ve created mentoring relationships inside the firm by matching a staff member with weaker relationship skills with a staff that exhibits strong relationship skills.
- Share responsibilities. You obviously must dedicate time and effort to establish and maintain good client relationships. And if you are spending more time with your clients, it can limit your client base. As a result, you must be able to leverage internal relationships successfully, bringing in other firm members to work with you. With a larger company, if I have a relationship with the CEO and someone else in the firm has a relationship with the CFO, we can share the work involved in maintaining a great overall connection with that client. As a general rule, we never want to have just one relationship person with a large client. If multiple people are involved, continuity and retention are easier and you can better meet client expectations.
The Rewards of Relationships
When you enjoy working with a client, the work is more rewarding in many ways. The level of service is enhanced and it is satisfying to help clients through good times and bad. Based on our experience, we have fewer write downs, a reduced likelihood of uncollectible accounts, and ultimately, better client retention by simply working with those clients we enjoy.
Think about it. If you are getting 100% realization because of a strong relationship and 70% on services seen as a commodity, that 30% gap is huge. Your financial reward is your better return on your hours and investment. By taking a relationship approach to client service, both you and your clients will reap better financial performance.
Building relationships has many obvious rewards. So get started by taking control of your realization and train staff to do the same and be accountable. As you look at realization beyond just the numbers and begin to incorporate these ideas into your firm’s culture, you’ll realize the extreme importance for accountability measures and partner unity.
Marlan L. Nichols, CPA, CFP®, CIA, is a senior partner of Nichols Cauley & Associates, LLC a large firm in Warner Robins, Georgia.