Hit the Bullseye With Your Client Retention

Hit the Bullseye With Your Client Retention with Amazing Client Experience.

One of the things your firm should be measuring is how well you hold on to your clients once they’ve signed your initial engagement letter.  Typically expressed in a percentage, this important KPI is a great indicator of how well you and your team are maintaining the relationships that keep them returning to your firm. A score of 100% means you are retaining every client you bring in.  A score of 75% would mean you lose 1 client for every 4 new clients you bring in (ie: 25% leave your firm each year).  Most firms are somewhere in between those two numbers and very few have perfect client retention scores. But you can see that retention strategies can be the difference between a successful firm and a suffering one.


Client retention comes down to one thing. 

Keeping a client is much cheaper than landing a new one. In fact, keeping a client is anywhere between 5-10 times cheaper than reeling in a new one. So how do you keep them on your roster? You have to keep them happy. It’s as simple as that…which is misleading, because keeping them happy can actually be a lot of work, but it doesn’t have to be. 

Today’s tech-savvy clients are more demanding because they have more choice. Clients know exactly what premium service looks like and whether or not they’re getting it. With a competing service just a click away, firms are doubling down on client retention. If you aren’t providing great service rooted in a solid client experience, you’re running a huge risk that could affect your bottom line. 

If you are in a small to medium size firm, you already know this, but you may be surprised to hear that large firms are starting to feel this, too. Client Experience is now a driving force in client retention. Large firms are now losing clients based on how those clients feel when they are working with the firm. Clients want to feel “That was great! It was easy, painless, and felt good” when they work with your firm.  That last part, the feel-good part, is the hardest part to pull off if you are using conventional methods to interact with your clients. 

A poor client experience can cause your staff to burn out, too. Accounting already has one of the highest employee churn rates at 20%, but firms that use smart tech have much lower attrition. So the experience we’re talking about here extends to your employees as well. The pandemic has taught us a lot, not least of which is the importance of work-life balance. The right tech can really help in this area, and just like keeping a current client, keeping current staff (especially if they are good) is far cheaper than finding, hiring, and training new talent. Tech can do a lot of the heavy lifting for you – your firm can see heights in efficiency you can only imagine.  [Author’s note: My first job out of college was at an advertising agency; my third day there started at 8:30am and went until 5:15am the next morning. That’s untenable and, frankly, inhumane. I’d be willing to bet you’ve seen your fair share of late nights/early mornings. It doesn’t have to be this way. Work-life balance is very important!]


Why do people love Target stores so much?

Think about it for a second. Are they selling products unique to Target on a base level? Heck no. Clothes, electronics, housewares, food. Nothing unique there. But what happens when you walk into a Target? What do you notice? You observe how clean everything is.Things are easy to find. The aisles are wide and bright. You sense the employees are happy. You feel almost like you’re in a premium superstore. This builds an intangible loyalty to the store and the brand. This is so prolific that it now exists as a meme in our culture. Target moms. Target dads. Target has built loyalty via an experience…a customer experience that consumers love.  And it’s all based on a feeling plus making it EASY for customers to do business there.


So how can you do this for your brand?

You’re in the accountant space. It might seem hard to make that sexy, but remember you are helping your clients achieve their dreams. Thinking back to Target, they’ve elevated the experience of getting the daily necessities to one that feels premium. You can do this by having the right front office tech in place.If you focus on every touchpoint your client has with your firm, you (especially your digital communications and document exchange with clients), you can build the Target experience in your firm and empower you to retain current clientele AND attract new ones. Let’s talk about that. 


Your clients should really only have one touchpoint with your firm. But it should be an AWESOME one.

There should be one place your clients go to get things to you and communicate with you (minus the occasional phone call). One place where your clients know they can work with you seamlessly. They can easily communicate with your firm there. They can securely and easily send you their documents, messages, questions, and signatures, etc. When they land there, it should have the feeling that this place TRULY is XYZ Firm, LLC. If you can create that, half of the battle is won.

Guess what? Liscio is that place. More to come on that. Let’s talk about what a healthy retention rate is.


What is a healthy client retention rate?

Your retention rate is measured by the number of clients you maintain over a given period of time and is an important metric for any firm as it measures how successful your team is at signing new clients, and keeping existing ones happy. Firm retention rates vary depending on the size of the clients and the accompanying assets. Firms serving smaller clients will see a lower retention rate as these clients are naturally exposed to more risk, like running out of funds. Smaller firms should aim for a retention rate between 90% and 92% while firms serving larger clients should aim for a retention rate of 92% and above. However, if your firm doesn’t hit this benchmark, you’re not alone; most professional services firms clock in with a retention rate of around 80%. 


Let’s compare two firms. Firm A has a client retention rate of 90%, while firm B has a retention rate of 80%. Over a span of 5 years, we’ll see profit fluctuate annually due to customer churn. 

Firm       Retention rate          Year 1        Year 2      Year 3    Year 4      Year 5       Total

A                90%                                 $100             $90            $81             $73           $66              $410

B                80%                                $100             $80            $64              $51           $41              $336 

With only a 10% difference in retention rates, firm A generates 22% more revenue over a five-year span. Bottom line: client retention is really important, and it’s rooted in the experience they get from you and your staff.


Why your firm may be lacking client retention.

Plain and simple, you’re not giving your clients the EXPERIENCE they deserve. As consumers, it only takes one bad experience to motivate people to walk away from a brand, as they leave telling everyone they know about it. As a firm, you need to prioritize your client experience to keep your clients from walking out the door and into the arms of a competitor.


Retention. Referrals. Revenue. 

The “Three R’s” – you can’t grow unless you pay attention to those three things. Retention anchors your bottom line. Referrals grow your profits, and you only make money if you have happy clients. Revenue is how much you bring in from each client (added together). The three Rs. Retention of your employees still plays key here because there are associated costs in bringing in new talent to replace talent that is leaving. Build the client and employee experience you know each party deserves and retention, revenue and referrals will follow. 


Client retention strategies that work.

Improve retention and transform new clients into loyal fans with a strategic client experience plan. Much like the best defense is a strong offense, a solid client experience will proactively address churn and keep your clients on board for the long haul. Think back to the Target example above. Your clients deserve a similar premium experience with your firm, but it takes a different form in the accounting, tax, and bookkeeping vertical.

To build the best possible client experience, start with a vision. Imagine the ideal experience your firm can provide. While mapping out your vision, think about the following facets of your client interactions: 

Setting — What channels do you use to communicate with clients? In person? Email? Social Media? Texting?  Map out your client touch points and think about how the setting aligns with the expectations of the client. Steer them to the idea that there really only needs to be one place for them to meet you digitally. 

Timing —  How responsive is your firm? How consistent is your team when responding to clients? Consistent and reliable communication will build trust and credibility with your clients. Establish a standard operating procedure that outlines how and when to respond to clients. Even if you’re following up without a solution to their question, don’t leave your clients in the dark. Let them know you’re listening and you’re on it. This should all be done in the same place in which your clients are already reaching out to you. If you’ve steered them in the right direction and built good habits, this should not be via insecure methods like email, text messaging, or social media. 

Quality Control — How do you know if your firm is responding on time? How do you know if your team is responding accurately? Your firm can’t fix what it can’t see. Ensure you have the right people, processes, and systems in place to fully understand what is happening on the client front. In a word, you need transparency. 


Set expectations from the get-go.

No two clients are the same. When it comes to delivering the most valuable experience, you need to know what your client values. Upon onboarding, identify how your client measures value and how they expect to derive it from your services. Likewise, in order to meet and exceed your client’s expectations, you need a mutual understanding of what they expect from your firm. 


About those reviews.

Once you’ve established your plan and trained your team, you’re ready for client reviews. Survey feedback will give you valuable insight and a reality check on client happiness.

Reviews, like a form, should be short and sweet. You’ll want new and retained clients to respond, so make it as easy and friction-free as possible. For seamless replies, set up answers on a sliding scale of 1–10. Any score you receive lower than a 6 indicates a retention risk. If this occurs, reach out immediately to touch base with your client. Alternatively, any score 9 or higher confirms your efforts are headed in the right direction.

Inevitably, some feedback will end up online. Whenever you’re confronted with a negative review, treat it as an opportunity to show off the quality of your client support. A swift and empathetic response gives you the best chance at diffusing the heat of the review (or rant). Denial is the worst response, and it will lead to an exodus. Acknowledge the issues honestly, with humility, and as much transparency as possible. When you look at business reviews on Google, how do you perceive the negative ones? What about when the business responds empathetically and quickly with an obvious tone of understanding and willingness to make it right? It makes all the difference.  


Wrapping it all up. 

Maintaining your existing client relationships is a sure-fire way to grow your firm. However necessary, client retention is often overshadowed by the thrill of chasing new clients. Establishing a sustainable, scalable, satisfying client experience will help your firm build relationships, foster trust, spawn advocates, and deliver exclusive value to your clients. Incorporating tools like Liscio, with secure communication and drop-dead-easy mobile document exchange, will help your team provide the seamless and delightful experience that keeps your best clients returning year after year. 


Liscio gives back!  For every demo we conduct, we donate 10 nourishing meals to children in need.  For every new firm that signs up with Liscio, we fund 30 days of education for children in the world.  Learn more here.