Although it may seem advantageous to keep your firm services broad and your client base large, creating more specificity with clients and culling ones that don’t fit within that ideal could be a catalyst for your firm’s success.
To determine which of your existing clients to retain and the parameters of prospective clientele, consider your firm’s overall strategy and vision; which clients your firm is best suited to serve; the segments that excite your staff; and the path that could lend your firm the most opportunities.
Sunsetting a working relationship with a client — especially if it’s been a years-long partnership — isn’t easy. Tactics to right-size your client base effectively can be found in the Right-Sizing Your Client Base Toolkit, created by the Whetstone Group Inc. and AICPA® & CIMA® Private Companies Practice Section (PCPS).
“The future of the accounting profession is really focusing down to what is it that [your firm is] really good at and passionate about, and going all in on one, two or maybe three areas,” said Carrie Steffen, CPA, co-founder and president of the Whetstone Group, and creator of the Right-Sizing Your Client Base Toolkit.
Put the most focus on the services that matter most to staff.
Establishing an ideal client base and right-sizing your firm demonstrates the commitment you have to your clients’ needs, your staff’s longevity and your firm’s future.
Bolster staff capacity and client value
Brainstorming your firm’s ideal service offerings and narrowing the client list to reflect that could enable your staff to “have more time and energy to devote to the clients that are left,” said Steffen. Additionally, narrowing client lists could also help weed out problematic clients who are disrespectful or frequently late in payments.
“We should be deepening relationships with the clients that are left and figuring out more about what they’re struggling with, what their challenges are, and how they’re running their businesses,” said Steffen. “We should be able to impact our remaining clients in more ways because of the time we are not devoting to serving something that doesn’t fit our model.”
After culling, what will result is a smaller group of clients who will have similar needs. Staff can hone their expertise and increase the value they give to those clients. “We should be able to do more for the existing clients,” said Steffen. “We’ll know more about what’s happening in the space in which they’re operating.”
Value will be added to client relationships and increase overall client satisfaction.
“Every firm can identify clients that they serve that they really aren’t probably in the best position to serve,” Steffen added. “You can look at metrics like realization and determine if you’re spending a lot of time figuring out how to serve this client before you actually serve the client.”
5-step guide to end “analysis paralysis”
Identifying ideal clients and narrowing client lists will be effective by following the five-step guide within the Right-Sizing Your Client Base Toolkit. Each step details considerations, poses questions and readies you to act in cultivating a right-sized client base that works for your firm.
Within the toolkit, you’ll also find templates and samples for client communications, internal and external FAQs, checklists, disengagement letters and much more. Each of these resources can then be tweaked to fit within your firm.
“When firms start thinking about [right-sizing], there are all these different pieces that swirl around and there may be analysis paralysis,” said Steffen. “This tool[kit] is designed to give firms a step-by-step process for firms to follow … and makes it easier to manage.”
Targeting your client base and culling unfit clients is one step your firm can take to more sustainable business operations. You can add similar intentionality into revenue planning. The Revenue Modeling Toolkit, also developed by the Whetstone Group, Inc. and AICPA & CIMA PCPS, is a comprehensive guide to developing strategic goals that align with your firm’s business strategy and revenue goals.
These toolkits are forward-thinking, said Steffen, and are part of the larger conversation of how you can continue to make the profession better. “This is the beginning of an important step for firms to continue to make this a sustainable, enjoyable, vibrant profession,” said Steffen.