Client strategy: The good client
Winning good clients is hard enough, but what about those that eat up your time and become unprofitable? We find out how to lose the clients you don’t want and spend more time in valuable and rewarding business relationships.
Clients, hmm? Getting enough of them can be hard − particularly in the first couple of years of trading. Then, one day, you realise that you’ve too many clients of the wrong kind: low fees, argumentative, over-demanding, and unresponsive to your helpful suggestions.
How can you get clients who you enjoy working for? And how can you spend less time with bad clients, or even ditch the ones on your books?
Financial Accountant asked accounting firms and consultants for tips.
When Alexandra Bond Burnett began working as a bookkeeper, she was probably too eager to sign clients.
“I ended up working to please – often working over the billable time that they would pay me, and until the early hours of the morning trying to wade through piles of paperwork,” she says.
Burnett was reluctant to end the contract because she worried whether she’d manage without the regular income.
“I felt like a teacher who spends all her attention on the badly behaved, while students who do the work early get ignored. I was feeling low every time I went in, and worse when I left.”
Eventually, Burnett − who now advises accountants and other finance professionals on communication and finding their ideal client – became more assertive.
“Once I got rid of them I realised I was able to respond to clients that really needed and appreciated my help, on my terms.”
What are her tips for weeding out difficult clients and finding rewarding ones?
“Firstly I would look at their character type, their business structure and their key intentions. When I say key intentions, I mean an understanding of what drives them, and also what morals they hold.”
Other things to consider include whether a client is organised, responds promptly to your requests or questions and is prepared to take your advice.
Amanda Watts, head of TwentyTwo Agency, a marketing agency that helps accountants increase revenue, advises accountants to avoid ‘vampire’ clients (who drain you of enthusiasm) and seek ‘radiator’ clients who give you a warm feeling and with whom you work well.
One of Watts’s clients runs a “brilliant” accounting firm. But when he contacted Watts he was struggling.
“He came to me serving everyone, and was burnt out and underpaid,” Watts says.
After five months her client had passed on his ‘vampire’ clients to someone else and now only takes clients he likes and who value him.
He spends more time with his family and this year had his first holiday in five years. Undertaking a financial analysis of your clients could be key in helping you fund your own holidays.
Track profitability per client and you’ll see who warrants special attention, who should have a new price – or less time and effort from you and your team, says Paul Shrimpling, managing director of Remarkable Practice, a consultancy that advises accounting firms.
“It’s the relationship work that maintains and builds loyalty and therefore also results in additional sales and recommendations too,” Shrimpling says.
Simon Dolan, an entrepreneur who set up SJD Accountancy more than 25 years ago and sold it for £100m in 2014, advises practitioners to budget for how long they expect each job to take – and then stick to it.
“For example, when a client switches from another accountancy firm they often expect you to complete the company accounts for the year previous, but sometimes will not mention this in the hope you’ll do them for nothing. Of course, you will need to make them aware they will need to pay balancing fees.”
What about getting rid of the annoying clients?Pricing work high can deter clients with low budgets. And if that fails? “Man up!” says Shrimpling.
“Every hour you invest in a low-value high-maintenance client is an hour you can’t train your team or spend with a high-value client you enjoy working with.”
FIVE TIPS FOR BETTER CLIENTS
1 Create a brief description of your ideal client − how much they pay you, the type of work, the client’s personality and business goals.
2 Review your clients. Divide them into the good, average and bad.
3 Update your marketing and sales information and strategy to focus on your ideal customer.
4 Spend more time with your most valuable clients. Understanding their quirks and business dreams could help you sell them more consultancy work.
5 Don’t be afraid to end work with low-paying and difficult clients.
UNDERSTAND YOUR CLIENT, ARTICULATE YOUR VALUE
Alastair Barlow is a founding partner of flinder, an accounting firm in London.
It focuses on fast-growing businesses with a good potential for growth.
“It’s one of our criteria,” Barlow says. “Our fees increase organically as the business grows. In several cases, we engage with clients that are seed-funded or pre-start-up.”
When clients get bigger, their revenue grows and they’ll appoint a board of directors, which usually creates more work for flinder.
The better you understand your clients (their challenges, objectives and values) the more likely you are to pick up more consultancy work, which is usually higher margin, Barlow says.
For example, when talking to a client, he realised its chairman was struggling to articulate the company’s strategy. Flinder organised a workshop to help the client reach clarity of purpose.
Sunflower Accounts is a practice near Chippenham. It’s run by husband and wife Steph and Mark Rickaby.
It meets clients every month, or quarterly, to discuss their goals and strategy.
“We actively encourage our clients to keep in touch with [us] on a regular basis to let us know what’s happening in their business,” Steph Rickaby says.
The firm prioritises advisory work, such as tax planning, cashflow planning and forecasting, over compliance work.
Doing this has helped Sunflower increase its average fee.
The firm uses cloud-based software called GoProposal to help it explain its business proposals to clients.
The software helped it turn some of its least profitable clients into more profitable ones, by helping Sunflower better explain the value of its services, Rickaby says.