Do You Know What Your Clients Need?
Firms that have systematically implemented a review process for their clients report that it has unlocked significant extra work at higher profitability than traditional compliance work. The key action in growing a client relationship is to conduct a regular (at least annual) client needs review.
Objectives
A client needs review has a number of objectives:
- To bring to the client's attention potential issues relating to their financial affairs that they may not have considered or addressed.
- To discover the issues which the client needs to address so that the firm can frame its service offerings accordingly.
- To show clients that the firm is capable of assisting them in business improvement, wealth management, risk management, succession, etc. in addition to traditional tax and accounting matters.
Potential Roadblocks
Despite the successes and the logic of the approach many firms struggle to implement a needs review process consistently across the business.
It seems that this failure to implement results from a number of reasons:
Resource constraints result in many firms struggling to complete the annual compliance work. Yet the work that emerges from needs reviews is normally higher value/profit. Accordingly, the question needs to be asked - If capacity is the reason, then firms should aggressively seek to increase capacity and/or eliminate less profitable clients that are unlikely to generate higher value work.
Partners and managers often report that due to time constraints they just never get around to it. The answer here lies in incorporating the needs review in the practice processes; the job is not complete unless the needs review is done.
The danger is that some partners and managers may take the "checklist approach" and complete a needs review just to get the job done. This does not result in an authentic needs review. A needs review is a genuine dialogue with clients to increase your understanding of the issues affecting them and how you may be able to help. This can only be done face to face. A checklist is merely an aide memoir to assist the dialogue and ensure potential issues are not missed.
Some partners and managers lack confidence in undertaking needs reviews. For some, perhaps a dose of personal development training would be helpful. Courses such as those conducted via the Performance3TM Management Program may help in improving client relationship skills. Others just need to start doing it.
Experimenting by reviewing others in the practice can be beneficial. Piloting the idea among clients with whom the individual has a close working relationship can also help. The more needs reviews conducted, the greater one's confidence in the process and ability to conduct them becomes.
Some argue that many of their clients are too small to warrant a needs review. Perhaps in these cases a shortened, simplified needs review can work. Even among smaller clients are potential wealth management issues.
It Works
Rest assured - the process works and boosts both client relationships and firm profitability. A partner recently related to me how out of just three needs reviews he had generated significant extra fees. He now understands the need to build extra capacity, which his firm is doing.
Set your target of performing three needs reviews by the end of July. Remember that for a lasting change, needs reviews must be incorporated in the firm processes so that a job is not complete without one.
If you would like a copy of our needs review checklist drop us a note and we'll send it to you.
About David Smith
David Smith is Australia's most experienced specialist independent IT and process consultant having over 30 years involvement with accounting businesses. He was managing partner of PKF, Sydney; he created PKF CRS and Superfund software; he is the strategic advisor to a national accounting firm and is the coach and to many small firms. He was the 2003 National President of the Institute of Chartered Accountants in Australia.
FMRC Smithink is an Australian based joint venture between Andrew Geddes and David Smith. They deliver a range of seminars and consulting services to accounting practitioners and other professional service firms. For more information, or to sign up for the free monthly e-newsletter, please visit www.fmrcsmithink.com
david.smith@smithink.com.au
Phone: 02 8206 9165
Fax: 02 9475 0692
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