Are they worth serving?
Selecting the right clients for the client service plan process
BY TOM SIDERS AND JEFF JOHNSON
If you believe your largest clients are your best targets for client
service plans, it may be time to think again. A strategic look
may show this is only partially true.
In a previous article in Accounting Today,
(CSPs ASAP, May 2011, page 40), we de-
scribed the benefits of client service plans;
here, we’ll show how to find the right clients
to target for a CSP. First, let’s do a quick review
of what it takes to capitalize on CSP benefits.
The firm must:
Have a process in place to measure cli-
ent satisfaction and estimate the firm’s wallet
share of each client;
Target clients with the highest potential
for additional services or who are most vulnerable to competitors;
Select the right number of clients to avoid
Supplement the current client service
team with industry or functional specialists
to have a fresh set of ears in the room;
Make sure the process is a client-facing
interaction, not an internal paper chase;
Act on lessons learned from the process;
Measure results in increased client satis-
faction, client retention, and increased wal-
let share, and tie some portion of incentive
compensation to these vital metrics.
It is not a coincidence that the list starts
with measuring client satisfaction, targeting
the right clients and selecting the right number. These are critical to success, and success
is critical to partner buy-in and institutionalizing the CSP process.
able for most clients. In those few situations
when it is not available, we estimate it based
on other clients of similar size and industry.
We then rank the clients by their total
spend and focus on the top 20 to 30 percent.
For most firms, there will be a natural break
between those two data points. These are
high-opportunity clients and good candidates for client service plans.
While it appears that we are ignoring a significant percentage of the firm’s clients, we do
not consider them unimportant. We ensure
that they continue to receive great client service through client feedback or surveys, but
they aren’t CSP candidates. By focusing on
clients who demonstrate a history of significant annual spending on services, we reduce
the candidates to a manageable number.
on professional services, are pleased with the
firm’s client service, but are not choosing the
firm for the majority of their work. Based on
our experience interviewing clients in this
category, they have not been properly approached, are unaware of the breadth of services the firm offers, or know the firm is really
good and therefore too busy to take on more
assignments. Whichever the case, this group
represents a huge opportunity. Applying the
full client service plan process to this group
can result in a sizeable ROI.
Category 3: High wallet share, low satisfaction: These clients cannot be ignored.
Those who are spending a sizeable percentage of their wallet with the firm, but are not
happy with client service, should be an urgent and top priority. Management should
meet with these clients quickly to save the
relationship, and be prepared to make the
necessary changes. That may mean changing
the partner responsible for that client, adjusting the client service team, investing the time
to re-engineer client service delivery, holding
the team accountable for timely delivery or
addressing any other issues that may be causing the client distress.
Category 4: Low wallet share, low satisfaction. These clients typically share some
characteristics. Realization and collected
rate-per-hour are low. They challenge already
discounted billings and don’t pay their bills
on time. They cause delays in engagement
wrap-up, cause scheduling issues, and they
are often tough on staff. Firm management
should assess the time and effort required
to convert these problem clients into better
clients, or seriously consider the value to the
firm of continuing the relationship. These are
the clients you must choose to lose.
Burr Pilger Mayer to buy
CBiZ’s San Jose unit
Details: San Francisco-based Top 100
Firm Burr Pilger Mayer Inc. has reached
an agreement in principle to acquire the
San Jose accounting and tax operations
of CBIZ Inc., subject to the successful
completion of due diligence, legal documentation and corporate approvals by
publicly traded CBIZ. Financial terms of
the deal were not disclosed.
The acquisition will help BPM
strengthen its presence in the South Bay
area, where it already has offices in San
Jose and Palo Alto. Headquartered in
San Francisco, BPM provides services in
the areas of assurance, corporate and
international tax, individual tax, business
consulting and wealth management.
Mike Spence will serve as the partner-in-charge of the BPM San Jose office.
CBIZ’s San Jose accounting and tax staff
will move into BPM’s San Jose office.
CBIZ will maintain its San Jose office for
NARROWING THE FIELD
Most firms assume that the best targets for
client service plans are their largest clients.
While we agree these clients deserve high
touch and lots of love, we prefer to start the
process by estimating each client’s total
spend on professional services, regardless
of the amount the firm is actually capturing.
This information should be readily avail-
Tom Siders and Jeff Johnson are CPAs and
partners with L. Harris Partners, a professional services consultancy. Reach them at
lharrispartners.com or (952) 944-3303.
TWO KEY ATTRIBUTES
Armed with our list of high-opportunity clients, we add two attributes — our percentage
share of each client’s annual spend and the
client satisfaction score. Rather than get overly scientific, we group the clients on the basis
of high and low: high or low wallet share; high
or low client satisfaction. The resulting sort
puts each of the high-opportunity clients in
one of four categories.
Category 1: High wallet share, high
satisfaction. Competitors covet these clients
and aggressively solicit them. The focus of the
CSP with this group is client retention and
appreciation. We often call it a value review.
The team should meet face to face with the
client, reinforce the value the firm brings to
them, commit to continued excellent client
service, and set expectations around client
service quality, timeliness of response, delivery dates, and how the client wants to be
served. There should be no question that
these clients get top priority in staffing decisions and scheduling.
Category 2: Low wallet share, high satisfaction. These are prime candidates for
expanding the firm’s relationship and generating additional revenue. They spend freely
WORTH THE TROUBLE
Analyzing the client base gets the firm focused on the right clients for the CSP process
and helps maximize ROI from the effort. It
also narrows the population to a manageable
number of high-opportunity clients. Experience tells us that regardless of the firm’s intent to follow through with a full-scale CSP
initiative, this analysis by itself provides a
strategic look at the firm’s clients and client
MnP merges in two firms
Details: Large Canadian accounting
firm Meyers Norris Penny, which recently
rebranded itself MNP, has acquired an
accounting firm and, separately, an
insolvency firm, both in Toronto. Financial
terms were not disclosed for either deal.
The accounting firm, Retford Lane
Bates, focuses on credit unions, as well
as private companies and nonprofits,
and brings two partners and a total of
eight members to MNP. The Retford Lane
Bates team will be moving into MNP’s
Markham, Ont., office.
The insolvency firm, Herpers Chagani Gowling, or 310 DEBT, as it is also
known, provides services in debt re-org-anization, reduction and elimination,
credit counseling and direct creditor
negotiations. The firm has four regional
offices in Ontario, in Hamilton, Kitchener,
Mississauga and London, as well as 20
satellite offices. The merger will add 35
members to the MNP team, including
four trustees in bankruptcy: Alex Herpers,
Mahmood Chagani, David Gowling and