Botkeeper
Somehow in a world where acquiring customers is a key to growth (and tricky one at that), letting one go can be the right thing to do.
You’ve probably had at least one client that at times made you wish you could go back in time and not bring them into your portfolio. Maybe they have a habit of making last-minute urgent requests, or show up a little too often in your email inbox. Could letting them go be the right thing to do?
The short answer? Maybe.
No, this is not a call to start thinning out your client list of anyone who pushes your buttons. After all, a study by Bain and Company found that increasing client retention by just 5% can increase profits by 25% to 95%. But the truth is, sometimes a client crosses a threshold where they truly are more trouble than they’re worth.
Once their behavior starts impacting workflows resulting in late deliverables and poor communication, accounting firms consider letting them go.
But should you?
Or is there a solution to be found to make sure they’re happy? Read on for what you need to know to answer these questions.
4 reasons to consider firing clients
To reiterate, cutting clients can feel like the right thing to do, but not be the best solution. Even when a client is hitting all your pain points, keeping them on can be better than trying to replace them. To help you get started on constructively looking at your portfolio, here are 4 pain points and how to address them.
1. Out of scope demands
*Phone rings*
“Hi. It’s me, Joe. Your bookkeeping client? Look, I know it’s been months, and I didn’t respond until your 5th email about the info you needed, but I’ve got a problem. We need to work up some financing and need to get moving this week, if at all possible… that’s included in my service fee, right?”
Ok, maybe that’s a bit exaggerated. Maybe it’s not. At any rate, you’ve almost certainly had a similar situation. It’s called “scope creep” and often creates some awkward conversations. OR, it creates work that you’re not paid well enough to do.
Creating a set product menu of services and fees is a great way to help your firm grow smoothly. It proactively sets the standard of what you’re going to be completing for your clients and how much it will cost to add services.
But regardless of whether you have a set menu of services or other system, you’re going to be at risk of falling victim to the dreaded scope creep.
It can start by doing something as a small favor or to improve the customer service experience. Maybe you know that 58% of customers will switch companies due to poor customer service, and you’re worried about losing them.
It might seem like the right thing to do at the time, but then you’ve set the standard of giving in to your client’s requests. All of a sudden, you’re doing extra work for no extra fees and you’d love to replace that client with someone who’d pay the same rate for less labor.
Is it you or your client?Sometimes the solution is as simple as realigning expectations. If you’ve used an engagement letter, refer back to it to show the clearly outlined services you would be providing. You can even try to turn it into an upsell opportunity by finding a price to continue doing the services you’ve done over and above what you’ve agreed on. However, if you use an engagement letter and they’re still trying to get you to go above and beyond, this could be a sign that they’re a bad fit. This is a sign that the client may not be putting care into what you’re communicating to them or they’re not respectful of your time. These are the types of clients that will continue to make unreasonable requests no matter how clearly you’ve expressed it’s not what you’ve agreed to. Take steps to reiterate the services you’ve agreed on. If they’re still pressuring you to go beyond, they might not be a good fit. |
2. Poor communication
Let’s set the scene. It’s approaching tax season, you’ve made requests for documents to complete your work, and you’re met with radio silence. The deadline is approaching and you send another reminder. It’s even closer and you finally hear from your client asking what you need to get them caught up. Clearly they “missed” the last couple of efforts you made to contact them. Sound familiar?
Responsive communication is a key part of an accountant’s work. As much as you might hang your hat on the efficiency and completeness of your work, that will be ruined by someone who isn’t responding to your requests. If your team is feeling stressed about a building backlog of work due to not getting access to what they need, it’s going to create problems.
Is it you or your client?Poor communication can be hard to fix because it’s a problem that can only be solved with communication— an ironic catch 22. However, there are some steps you can take before gently letting a client down for being a poor fit. First, try to find their preferred method of communication. Some business owners don’t allocate a lot of time to monitoring their email inbox and they need phone calls to get them to do something. Others might ignore calls because they’re too preoccupied to take them. Having one method of communication for all clients can be what’s creating the problems. Asking what works best for them or exploring a different point of contact when you’re finally able to get in touch can help smooth out communication problems going forward. Second, you can add timely communication clauses to your agreements. If they have deadlines that you need to meet, set your own deadlines for communication responsiveness. After all, how are you going to help them if they aren’t going to enable your work? Setting deadlines can set the fire under clients who are typically complacent. |
3. They’re never pleased
Another big pitfall for accounting firms (especially offering advisory) is trying to be all things to all people.
You don’t have to be a people pleaser to fall into this trap, it’s a natural part of working in a people-facing service like accounting. You want to keep your clients happy, after all, feeling underappreciated is the number one reason customers will look to take their business elsewhere.
There comes a time when pleasing clients stops being constructive. Going above and beyond every once in a while to increase a client’s loyalty? This can totally pay off. But if a client is never pleased by your efforts, you’re draining resources for someone who isn’t productive to your firm.
Is it you or your client?This is another good time to refer back to your engagement letter and the outlined agreed upon deliverables. If you’re consistently hitting these marks but they’re always asking for extra or showing displeasure at what you’re providing, it might be time to move on. But before you make the decision, it’s best to have a conversation to dig into where the displeasure is coming from. Business owners are under loads of stress and oftentimes, that stress gets passed onto some of the people they work with. By talking it out and digging to the root of their problem, you can explore potentially mutually beneficial solutions that keep them happy while not pushing you beyond your limit. If their expectations are simply too high or they keep moving the goalposts on you, it could be the moment to let them down easily. |
4. They don’t fit
This one is a lot harder to define because it’s a very personal choice. A client can become a bad fit over time for various reasons. For example, maybe your firm has grown in a way that specializes in a specific industry but you still have some legacy clients outside of it. You can find yourself losing time and resources on work that you’re less efficient with. This will make for potential gains when replacing these clients with another within that industry.
Sometimes a client no longer being a good fit is like a relationship where someone is moving across the country for a new job. There are ways to make it work, but you still need to make sure it’s what’s best for the both of you.
Is it you or your client?It’s hard to say. This one really is a gut check about how much trouble it is to keep this client on or whether you can deliver the same level of service they’re used to. When trying to figure this out, ask yourself a few key questions. First, why are they no longer a good fit? Second, what would it look like to continue working with them? Third, does that fit with your future vision for your firm? Another good example is a tech-adverse client who only works with paper documents. If your firm is moving toward being high efficiency by using tech, serving them could take you as much time as it takes to serve multiple tech-savvy clients.. Is that a sacrifice you’re willing to make to keep the client in your portfolio? |
Build a company of the right clients (and the right team)
Firing a client can sometimes be the right thing to do. At the same time, you shouldn’t treat it as the first option.
There are solutions to most of the pain points you’ll experience, however it’s how your clients react to these solutions that should determine the action you take. When you manage to find a solution that works, you’ve succeeded in providing excellent service. If you find they aren’t reacting well to the solutions you’re offering, you can take back time to better serve your other clients.
Another great way to take back time to better serve clients is by finding new efficiencies in your firm.
One way to cut down on overhead costs is by automating the bookkeeping and admin work of your clients through the software you use.
With Botkeeper, human-assisted AI completes bank reconciliations, categorizations, report generation, and more. This means more time for providing exemplary service to your clients and growing through word of mouth.
