1/3 of Accountantss Claim Client Churn of Less than 10%, well below the Industry Standard of 20%
Industry wide numbers show that clients stay with an accountant for less than five years. In studies, small accountants claim retention that is far above this. Are they fooling themselves?
- (1888PressRelease) August 26, 2011 - Atlanta, GA - With an average industry client loss rate of 20% annually, it is a well known fact that keeping clients for more than five years is difficult. However, in the most recent survey from Secrets of Marketing Accounting, 31% small local accountants claimed a client churn of 10% or less each year and 62% claimed that their loss rate was less than 20% annually. The question that arises from these results is, are their retention rates that high or are they simply sticking their heads in the sand?
The answer for the group as a whole may not be immediately clear, but to Kirk Ward, Director of Secrets of Marketing Accounting the answer for individual accountants comes down to a single point. He states that "accountants who are participating in forums and other media in an attempt to again knowledge are likely active in growing their practices. As a result, they probably do have loss rates well below the industry average. On the other hand, practitioners who are not actively participating and learning likely have exceptionally high churn rates and just are not paying enough attention to realize it."
As Mr. Ward has pointed out before, selling additional services to existing clients is easier and less expensive than acquiring new clients. Truth be told, marketing to new clients is almost nine times more expensive than increasing wallet share with existing clients. This results in a two-fold loss for small practitioners who are sticking their heads in the sand. They are losing out on cross selling to existing clients and they have to foot the expense of finding new clients.
Response rate for this survey was just enough to provide statistical significance, which is somewhat alarming. Either everyone was busy when the study was conducted, or most do not know what their annual loss rate is. Understanding these numbers is an important component of tracking resources and comprehending how successful a marketing plan is. If accountants have not been keeping track of loss rates, now is a good time to start.
Interestingly, none of the study respondents indicated that their client loss rate was greater than 20% per year even though categories for 20% to 30% loss and greater than 30% loss existed. It is a safe bet that practitioners who are ignoring their client churn fall into these later two categories. One key to successful client retention is cross-selling, which can extend the average relationship from less than five years to well beyond ten. Marketing services to existing clients is, as Secrets of Marketing Accounting has pointed out previously, the single best way to increase wallet share and grow a practice.
More information on the survey may be found at Secrets of Marketing Accounting Services
About Secrets of Marketing Accounting Services:
Secrets of Marketing Accounting Services is the premier source of marketing tools and materials for small and growing accounting practitioners, providing a variety of pre-written and private label resources that practitioners can use in growing their practice.
For more information, visit http://secrets-of-marketing-accounting-services.com or call the Secrets of Marketing Accounting Services office at (563) 265-1491.
Contact Information:
Press Contact:
Kirk Ward
Secrets of Marketing Accounting Services
kirk ( @ ) secrets-of-marketing-accounting-services dot com
Atlanta, GA
(706) 698-5475
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