When does a client consider changing firms?

The period of time during which a client is open to the idea of changing accountants is a window of opportunity for your firm. Generally, this window has two stages:

  • The passive window of opportunity, when a client is not actively seeking a new accounting firm, but is open to approaches from other firms
  • The active window of opportunity, usually a much briefer and more intense period, when the client is actively seeking a new firm

Judging these windows of opportunity is crucial, because timing is everything when it comes to signing prospects. If a prospect shows any interest at all, you should stay on their case and try to secure them while the opportunity lasts. If the prospect does not yet want to meet with you and asks you to call back, attempt to set up at least a tentative appointment to speak to him or her at a later date.

If you miss the window of opportunity, it is almost impossible to convince the prospect to consider your firm. Clients feel most positive about their accounting firm when they have just passed a window of opportunity. For one thing, they have just been through the whole decision making process and are extremely unlikely to want to start all over again; and for another, having just chosen a new firm, they are going to give them some leeway before starting to make judgements about their service standards.

Being in at the beginning of a window of opportunity is therefore crucial. This is helped by the fact that the decision to change accountants is rarely taken hastily and generally occurs at certain natural breakpoints. These breakpoints are often signalled in advance, sometimes as much as a year or more before the client starts to give serious consideration to the matter. The secret, therefore, is to learn to read these breakpoints and to time your approaches accordingly.

Breakpoints related to the lifecycle of a business:

  • Startup: the first year

Few businesses will consider changing accountants in the startup phase unless they are under external pressure to do so. They are still feeling their way, trying to establish themselves, and will be loath to change with so much at stake.

  • Growth: the second to fifth years

The second phase, which is usually one of steady or rapid growth, is a different matter. If the business started off using a sole practitioner, which is very common, they will probably by now be looking for a firm of greater substance to take on their expanding servicing requirements. This is the time when their present accounting firm is more likely to relax its accountant-client marketing and start to take the client for granted. Clearly this is a period during which possible breakpoints are likely to occur.

  • Consolidation: the sixth to tenth years

In the third phase, the consolidation phase, the business is fairly stable and there is little appetite to rock the boat. Generally, only drastic developments would persuade a business owner to consider changing accountants at this stage.

  • Maturity: the eleventh year onwards

Finally, very few businesses change accountants once they have reached the stage of maturity.

Breakpoints determined by business succession:
One of the best opportunities occurs when a business passes to a younger generation. The new incumbent is more likely to consider changing accounting firms for three reasons:

  • They are less likely to be emotionally involved with the history of the business
  • They probably have little loyalty to the existing accounting firm
  • They are usually keen to assert their authority by making changes to their inherited regime

Generally, the younger the business owner, the better are your odds of winning the client. Get to know the son or daughter who will be taking over the family business, or any lower level decision maker who will eventually rise to a position of authority. Many accounting firms get to know the managing director and the accountant, or whoever is currently in power, but ignore those who will be inheriting the business from them. This can cause resentment in those climbing the ladder, so when they do come to power they often make a change simply to be free of ‘Dad’s accountant.’

Breakpoints determined by change of ownership
Although the sale of a business to a new owner presents an opportunity to change accountants, there are some factors that might make this difficult:

  • The existing accounting firm of the new owners might have solidified the relationship by performing important work during the acquisition
  • Both the buyer and the seller of the business might be primarily interested in consummating the transaction, not in considering who should be the accountants

Nevertheless, it is worth persevering and checking with the new owners from time to time because once the initial flurry of activity has died down they might be open to considering a change.

Breakpoints determined by dissatisfaction with the current accountant
Remember that most clients are satisfied with their new accountant during the honeymoon period, just after they have retained them, but very often this satisfaction wanes as minor irritations begin to mount up and the initial gloss wears off. Make a note to give these prospects a follow-up call after the other accounting firm has had a chance.

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