Accounting with Confidence Podcast

53: Realigning Your Client Base to Build Value

• Beth Whitworth • Season 2 • Episode 53

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In this episode, I discuss the importance of realigning your client base to ensure your business continues to grow and thrive. While on a girl's trip in Northern Georgia’s Blue Ridge Mountains, I share my experiences with managing client relationships, including the challenges of letting go of clients who no longer fit your services, handling difficult conversations, and the necessity of re-evaluating client fit regularly. I also talk about lessons learned over the years, such as trusting your gut instinct, setting clear boundaries, and maintaining a streamlined client onboarding process. My journey illustrates that reevaluating client relationships is essential for sustaining a successful business. Finally, I invite listeners to share their own experiences and challenges with managing client relationships.

 I am Beth Whitworth race car driving quilt making CPA firm owning wife, mom, and boss. I'm here to help you build a business you love by sharing all of the good, the bad, the ugly, and the excellent sides of working in this industry. It's not always easy, but after many years, I can finally say it's worth it.

Let me guide you on your journey to accounting with confidence.

Hi, and welcome to another episode of Accounting with Confidence. I'm Beth Whitworth, your host, and today I'm coming to you from a very different location. I typically don't try to procrastinate things so long that I have to do them on vacation, but I am on vacation. I am in northern Georgia and that's the Blue Ridge Mountains, and I'm here on a girl's trip.

And I am also pretty interested in keeping my streak going, of getting a podcast episode out every week. So I thought, well, I'm just gonna take the time. I have one outlined and I'm just gonna sit out here in this beautiful setting and talk about what I'm gonna talk about this week. So this week we're talking about realigning.

With your client base. So what I mean by that is, you know, there are times in any business when your business has changed. Maybe you've started to add new services. Maybe you've decided to eliminate services. Maybe you have changed the size of your team. You know, there's all kinds of things that can change inside your business that can impact the ability for your client to remain the right.

Fit. And at times it means you need to review that and realign with them. So if you've listened to me before, you've heard me talk about having a pretty thorough customer vetting process so that you are kind of ensuring that you have the right fit from the time you first meet and. That is not something I had in place my entire career.

You know, there are definitely times in your career and in your kind of life of your business where you feel like you need to take whatever clients are interested in your services, whether or not they're going to be a long-term fit. And as you grow and you get more processes and develop your kind of your, your niche and what an ideal client is for you, you reassess that.

And I really feel like you need to reassess that on a fairly regular basis because there's definitely things that if you don't reassess, can be harmful to your business. So a lot of reasons why people aren't interested in getting rid of clients is that it's counterintuitive. It's counterintuitive because you feel like I'm trying to grow my business, but I am going to get rid of a client, and that's revenue.

So why would I wanna do that? Well, sometimes you're not making as much money with that client, or maybe it's not a good fit because the client doesn't wanna grow with you as your services grow, et cetera. Another reason why people don't really want to work on realigning their clients is that fear of that hard conversation.

I am definitely one who has a, a personality trait that is an avoider of, of difficult conversations, and that is something that you have to overcome in order to build this into your business. And then of course there's that fear factor. Just in general, are they not gonna like me? Are they gonna be mad?

You know, that is part of my, my procrastination of hard conversations. Is there the emotional reaction to it? And so I, like I said, I'm kind of an avoider. And the other thing is, okay, we've always been told that, or learned, or you know, some, uh, I'm sure you've heard it's easier to sell more services to an existing client and grow with that client than it is to onboard a new client.

And I followed that premise for very, very. Very long time. And what happens though is if. If that's your main motive, you know that that is how you are going to grow and the clients that you have are not participating in that growth, then you're really not getting anywhere. So we've also, you know, along with our, our vetting process, before we get new clients now, we also have an onboarding process so that it is not so costly.

It doesn't take as much time to get someone fully onboarded with us. And so we can kind of negate that entire premise of it's easier to sell to an existing than it is to a new, and there are some, I'm not saying that you can't sell anything to your existing clients, but when you are starting to. Try to move things along with a client and you, you see that there's room for them to, if they would use additional services from you and they're resistant, they just wanna stay in the same place, that is a good sign that it's time to move on.

You know, whether it's you helping them find another. Accountant or not, or just saying, Hey, you know, we, we don't have the ability to serve this client. And, and that is what has made me be very cognizant of having to do this on a routine basis because by not doing it, it's hurting my. You know, you should be evaluating your clients and your customer base on a regular basis.

One, is there something more you can do for them? Two, is what you're doing for them, um, helping them, you know, is it a value to them anymore? I. Three, are they someone that's doesn't fit into your tech stack anymore, doesn't wanna participate with your online portal, or will never get, you know, they are con continuing to send you documents by email.

Um, when we say, no, that's not secure. We don't wanna do it that way. Maybe they don't wanna sign things electronically or they want a paper copy of things in your paper list. All of those things lead you to needing to look at, is this still a good fit? Let's talk about lessons learned. So, like I said, I am the avoider of hard conversations and have really felt that getting rid of clients for a very long time was counterintuitive to growing my business, and I couldn't see the value between getting rid of that client and.

Really saving my sanity. So I had learned some hard lessons. I definitely learned some hard lessons. One of them is kind of not relating to letting someone go, but it's more relating to always trusting your gut. So I have always felt like I had a fairly good judge of character and fit with people, but there have been times in my.

Business where I have gone against that because yeah, it is something that we can do. We do have the capacity to do it, and the price was right. There was something in my gut that said, you know, this might not be okay. But maybe I was in a situation where I felt like I needed to, I needed to increase the revenue I needed to just keep building my client base.

And I didn't trust that. And almost every time that came back to bite me, whether it was within, you know, less than a year or whether it was in 10 years, at some point it definitely came back to bite me. The other lessons I've learned. Around managing your client base is, I started out, I did not have clear boundaries.

Not clear boundaries for my availability, not clear boundaries for, you know, when work was going to get done and that would lead into people in, in particular, I have one particular client that felt like everything was urgent. I kid you not every subject line of email. It didn't say anything other than urgent in all capital letters, everyone.

So every single thing they had to ever address with us, they considered urgent. And I'm always, I'm known for saying, Hey, nobody dies in accounting. And so there are no emergencies. Accounting does not generate emergencies. But this particular client absolutely thought everything was urgent. We should always drop everything to take care of them.

And did not respect the fact that I would have vacations expected answers in very, very short term. Like if you didn't respond to that urgent email within two hours, they were calling. Well, I have an urgent question, and like I said, never an emergency and accounting. These were not urgent. They were not.

Sitting at the, the bank and the loan director deciding whether or not they were gonna get a loan based on an answer that I could or could not give them. It was never an emergency, and it became very difficult with them because you couldn't search your email and see any topic because you know every subject line said urgent.

I knew it was not gonna be a good fit, and I did avoid that hard conversation with that This client as well, and. What ultimately happened is that I told them that, you know, we were no longer gonna work with them, and this client said, you can't do that. I said. What do you mean? I can't do that? Didn't have a contract in place that said I couldn't do it.

They just said it. We couldn't do it because they didn't want me to let them go. They didn't wanna have to go find somebody else, and they were trying to control what I could and couldn't do inside of my own business by and who I worked with. And so I did not have good, clear boundaries at that point, and I made some mistakes in waiting to have that conversation.

Good signs are if you're. Team is frustrated with a client, whether it's not getting the communication they need from the client or getting the, the client not respecting their boundaries, and you're hearing about that. What I have learned is it's, it's better to address it, see if this is a good time to realign the client with either a different member of the team.

Or they need to be realigned to a different firm. You know, they need to be rehomed and it's okay. It's okay. I found through the years that some of the biggest reasons why we, you need to do it, other than, you know, like I said, the client's not valuing your services anymore. If you are. Continuing to get pushback on price sensitivity with your clients.

You know, where they say things like, well, I just want the minimum service I can have with you for, you know, the minimum amount of dollars that I can have that for. I just, and, and really what that is implying is. They don't value the knowledge and experience that you bring, but they need somebody to do their compliance work.

So if that's what you do, great, figure out how to make that work. We have really moved forward into a situation where we don't wanna do just compliance work. We don't wanna do just your tax return because there are places that they could get it done for less money. With that expectation of your, their people are gonna answer them quickly or they're gonna.

Sit there while they wait and get their return done, which is not some how we work and. It's one of those, those things where some of the clients are like, yeah, I don't wanna increase my services with you, I just, I just want the minimum, or I wanna cut back my services so that they're only getting the minimum and that's a price sensitivity and I, I get that right now.

Absolutely get that. I mean, it is, you know, we are in an economic situation where everything is costing more and that is something that people, if they value you. For the professional work that you're doing, your, you know, your experience, your knowledge, your attitude, whatever it is that they value about you, they should be willing to pay you for that.

And just because the rest of the world, the entire world prices are going up, when your prices have to go up as a cost of living, and the people who value you will stick with you because. It's an unfortunate fact of the of life. You have to figure out how to afford the things that you value. So when someone gets super price sensitive, and that seems to be a recurring theme with them, with them, I tend to know that it's time to rehome them and.

That's never a comfortable conversation, but it's something that needs to to happen. And I mentioned the other two relating to they, maybe they don't fit into your firm model anymore if you've been around a long time. I came from a, a world of paper files, lots of printing and copying file drawers, and we don't have any of that anymore, so it's been a complete change complete.

Like 180. We don't do that anymore. We do still have people who want to drop off their tax information, and I'm okay with that. If I, if it's a good client who is committed to, you know, the value that we bring, we do have a a method for that to work, but they're gonna sign their return electronically. We're not gonna do paper signing because that is not.

Something that we do anymore, but we do have the ability for them to still drop that off. But if it's a client who just has that expectation that they can just come into the office, we don't have that. We are a hundred percent remote, including me. So there's not necessarily someone that they could talk to about their tax return and people who want that have needed to move on because we don't, we.

We don't do that anymore. It doesn't fit our model anymore. So we have, um, spent some time realigning with clients in that way. And then of course that the tech stack is constantly one now, um. Another one is that, that's kind of a trigger for me to consider. You know, do we need to, to do something as far as changing how we work with someone or stop working with someone is when they kind of ghost us.

You're trying and you're trying and you're trying to get their work done. The work that they're paying you for and the work that they've signed up and said they want, but you can't get. All the information, you can't get a question answered. You can't. You just can't get anything done, and it's frustrating for us as the one trying to fulfill this engagement to not be able to get it done.

You know, so we are, things are overdue. We are not being able to bring what we value, which is giving someone timely and accurate financial information so that they can make better business decisions. That's one of our, it's part of our mission and it is frustrating to me and to our team. We can't do that.

So it's, it's frustrating to have to be chasing someone for something. For me, it's frustrating because those same types of clients sometimes will say, all of a sudden they need something in a hurry, and we've been asking for information for weeks or months, and suddenly it's like, well, we would've had this already done for you if we would've received information on time.

And it's something we struggle with in all accounting and bookkeeping firms. I do feel struggle with this. So for me it's not a blanket reason to just say, yeah, we can't work with you anymore, but if it's chronic where we are. Feeling like, okay, we've tried. We've tried to get your work done, you need the work done, but you're not prioritizing getting us information.

Sometimes that has to be a hard conversation and we will work very hard with our clients to try to kind of realign them in a way of being able to say, okay. Let's figure out how we can get this information more timely. Can you give us a login? Can we have a shared Google Drive? Can we do something where we are getting it more timely and we can take something off their plate so that they don't have to get something to us, but we're getting it ourselves?

Sometimes that's all the alignment needs to be. It's not necessarily a we're not gonna work with you. It's a we need to address the process and we need to do it now. And if we don't do it. Maybe then we need to make a change. But it is very difficult for me to sign up clients and then not be able to get their work done and not be able to get their work done on time.

It's very, it's frustrating for me. I feel very much like what I could be doing for them. It's just, it's not working because they're not getting things that they need. So, oh. Anyway, all that being said is, you know, realigning your clients is not necessarily just saying, I don't wanna work with you anymore.

Just not, sometimes it's realigning your clients to say, we don't think this is working as well as it could be. And here's what I think we need to do. Let's work towards it. Maybe we put a, you know, 30, 60, 90 day plan in place to try to figure out how we can make this a better process. And then maybe we're looking and saying, okay.

We still can't get it. Maybe we do need to think about, you know, going our separate ways. Now, attrition in business is, it's a fact of life. People die, people move, people close their businesses, people sell their businesses. So there's always something that you need to be on the lookout to have your, your pipeline full.

And I would say, you know, if you're. Constantly having a process in place where you can call the current client base, it brings you capacity to vet a good fit client and bring them on board. So if you are keeping your clients all at the same, you know, uh, regardless, you're never getting rid of anybody, you.

Still we'll have people who are going to be gone. And so you need to have that pipeline in place. Keeping your referral systems, you know, in good working order. You know, I work with a lot of financial planners. I go to a lot of chamber events. I do, I do things to keep us front of mind for people, but I also make sure that those referral sources know what a good fit client is for us.

The other part of keeping those referral sources open is when you do need to make a change with a client and find someone who's a better fit for them. You have some people, some resources you can go to and say, Hey, I have a client who needs this, and you know they need it. Maybe they just, they need a different type of, maybe they need an in-office, you know, they don't work well remotely.

Okay. So I can reach out to those people and they can help me find places to send them. For me, I tend to review right after tax season when things are fresh in our mind, you know, things that were difficult to get done during tax season. Is that a, there's, is there a reason? Did we not have enough touches pr.

During the year to make that the tax return process easy enough. And if we didn't, is it because they don't want to commit to a higher level of service? Maybe we need to be looking at their stuff monthly and they only wanted us to look at it semi-annually because of the cost. Well, you know, if that then turns into a tax return that we can't get done on time or without a whole lot of cleanup work, then they need to, we need to say, okay, let's.

Let's talk to them. Let's realign our services and if we don't, can't come to an agreement, you know, we help find them, transition them to a new accountant. Now, I talked a lot about how I avoid those hard conversations. It's like this for every area of my life. Um, but I have learned over the years, kind of some, some language that I tend to use is true.

It is from my heart. And one of those is, you know, we know like if, if you're having that conversation with your client and you're like, okay, they're not a good fit anymore, I need to do something about it, I will say something along the lines of. We no longer feel that our services are bringing you value that.

And that's true. I mean, like I said, I can't stand it when someone has hired me to do something and we can't get it done because. We can't get the information, or we're continuing to have coaching calls or quarterly financial meetings, and they, they want information from us, but then, you know, they, they don't use it or they don't see the, the value of trying to use it or have a.

Bazillion excuses of why that just won't work for them. 'cause you know, they're a special butterfly or snowflake or whatever you call that. So I tend to use that language. We no longer feel that our services are bringing you value. And that's true. The other language that I tend to use is that our firm's availability doesn't fit with your needs.

So when we are running into issues with someone, so we run a 100% part-time firm, so everybody is part-time. There is not somebody answering the phone from 8:00 AM to 5:00 PM five days a week. It's not how we work. Majority of my people work five to six hours a day. And so if there's a client who is constantly saying, well, I can't get ahold of, I can't get ahold of Nicole, I can't get ahold of Sarah, I can't get ahold of Beth, well.

There are ways to get ahold of us. There are ways to schedule meetings with us. You can leave a voicemail, you can do all those things. But if that seems to be the big sticking point, then it is definitely a situation where we're not gonna change our availability. This is how we build the firm, and we have lots of clients that have no problem with it.

So when we get someone who kind of. Doesn't like to communicate in the same ways that we do. Maybe we send them an email and they pick up the phone. Well, you're not always gonna get us 'cause everybody's not always sitting at their, their desk and they're definitely not sitting at their desk from eight to five.

So using the language of our firm's availability doesn't fit with your needs is a good indicator for us to be able to say. So you need to find someone who is, maybe you do need to find someone who is there. Nine to five or whatever so that you can always have phone access. And another language that I have used is that.

And I'll just read this one. Our capacity to serve your account has changed and we need to make hard choices and I have used that in, in the sense that we always have staffing or team changes and we are always trying to elevate our team to do more with their clients and. As we're finding this, we can't always keep everybody, so maybe there's an account that doesn't.

Really meet our standardized processes. They're doing things differently than anybody else. Maybe they have a different way that they process payroll. Maybe they have something where we are not having quarterly meetings and that's now kind of a re almost a requirement, whatever it is. It comes a time as we are continuing to grow and add clients that we have to look at our client base and say, okay, well.

We need to keep this client, but this client takes, they're not a good fit for our current capacity because we are also trying to keep our team lean and part-time. And so not being able to do that because of just processes that we have not been able to help them standardize is something that we can then say, okay, we.

Our team just doesn't have the capacity to manage you. It. Same thing happens when a client that we, we don't really work with that much suddenly is like, oh, hey, I've added, you know, two or three businesses or decided to buy a rental property, and, and their work becomes more than we have available. Uh, for the team at the, at that time, maybe they need to go somewhere else.

Take all of that book of business and find someone who can handle all of it. 'cause nobody wants to piecemeal their accounting for the most part. And I don't blame them 'cause I don't want, I don't wanna piecemeal it either. But yeah, there's capacity issues that, and especially during this kind of still little strange and difficult hiring time that can be.

One of those things where you're you, you say, okay, do we really have the capacity to continue to handle this account this way? And what would it take to get that client into a standardized process? And would they be willing to do it? And so it's again, back to those hard conversations. So I spend a lot of time kind of considering what more we can do for our clients who, what kind of additional clients we want to work with, and what is best for the clients that we have.

Are we serving them the best that we can because. I don't want someone paying me to not get the best value that, or feel like they're getting the best value for what we're giving them. And whenever that starts to feel like we're getting some of that pushback where they're like, yeah, I'm not getting what I want.

I need to get to the point where I am having that hard conversation right away before it's a hard conversation, you know? So it's one of those things that it should be just part of business. Hey, am I still bringing you value? You know, do you still value what we're doing for you? Can we be doing more? Do you, you know, what does that look like?

So not a super fun topic to talk about while I'm on vacation, but it is the one I had ready to go. So I'm going ahead and, and getting it done. But really it's one of those things where I feel like it's been on my list to talk about for a very long time because that we have been, I guess I would say we've been, been.

Very conscientious about trying to make these changes so that it's easier to streamline our processes to get the clients that are absolutely kind of anomalies, to have fewer of those because the more clients that we have that don't fit into things that we're really good at, the more time it takes it, more time it takes from me, more time it takes from management of the client.

And so, yeah, so keeping an eye on that and being very conscientious about looking at the list and saying, okay, you know, what do we have really have capacity for in order to maintain the type of firm we want to have? Which is, you know, kind of a, a, a work and family. Balance a and and work and family first type thing as well as part-time.

I don't want people to feel like they have to work a whole bunch of extra hours, even during tax season. So we think about that a lot and as far as making sure that. We're in line with our capacity and to, and we have to look at client load and what is working and what is not working in order to do that.

Anyway, so this girls trip here, I'm here with some friends of mine from college. We went to the same university together many moons ago. This is our second annual girls trip. This is the only been the last two years since all of our kids had gotten, at least to college, before we had started doing these trips.

And having a blast. Absolutely. Having a blast. So, so, so thrilled to have Lisa and Sarah here with me, and they're giving me some time to just get this recorded. 'cause, you know, they're holding me accountable to keeping my streak going, to getting episodes published every week. So even though this isn't the, you know, maybe not the most exciting of topics to talk about, while I am enjoying my vacation, it is something that I think is important.

So, alright everybody, there's a link underneath where you're watching this that says, send Beth a text. I would love it if you send me a text. Send me a text and tell me, do you do this? Do you kind of look at your client list? And if you do, what do you struggle with the most? Are you like me, avoid the hard conversations?

Or are you the I need all the revenue, I can't afford to let somebody. Move on. What is it? I would love to hear. Text me. Send Beth a text. Just if, wherever you're listening to this or put it in the comments and if you're watching on YouTube and let me know. And then also if you can follow and like me, wherever you're watching, or if you see one of my, my little shorts or my reels, give it a thumbs up or follow me wherever you are seeing those.

I would love it, whether that's LinkedIn or Facebook or YouTube. I'm still new to all of this trying to get people to see my stuff more, and so I would love it if you would do that for me. Okay, everybody. That's all I've got today. It is getting to be dinner time, so I'm gonna wrap it up and remember that I'm here to help you, to empower you to build a business that you love.

All right everybody. See you next week.

Thanks for listening to another episode of Accounting with Confidence. My hope is that my experiences can help you navigate the realities of owning and operating your business. Please subscribe or follow the podcast on your favorite podcast listening platform so that you never miss an episode. Feel free to leave me a text by using the, send us a text message link in the show description and let me know how I'm doing.