Retention Marketing for Accountants: Protect Your Moat in the AI Era

Intro

Welcome to the Growth Minded Accountant Podcast, where our experts share best practices on running your firm in the digital age. This podcast is brought to you by CountingWorks PRO. Let's get started.

Lee Reams II

Welcome back to another episode of the Growth Minded Accountant podcast. I am your host Lee Reams II, founder and CEO of CountingWorks and our sister company TaxBuzz. Today we're talking about a topic that honestly is as most common sense as anything we have ever talked about. Uh but it doesn't really get enough attention in the accounting profession, the tax marketing side. It's retention marketing. We obsess with bringing in new clients, getting referral pipelines going, you know, ads, SEO, networking, uh webinars, but the truth is if you're losing clients out the back door, you're not really growing. Obviously, uh you're just running in place and then to grow when you're losing if your churn rate is too high, you got to replace all those clients. Plus, to get that 10% or 20% growth rate, you need to increase in other areas.

Uh so, we're going to have a good conversation about this. First of all, I'm going to talk about why retention matters. I'm going to get into some of the math behind it just to do kind of a logical walk through and then we're going to get into some best practices, things that you can utilize this upcoming season. It's easy things. Certain things are easier lists than others. Um, but there's a lot of, you know, really good takeaways that you can use right away. Joining me is my co-host, Rebekah Winters Barton, chief visibility officer with CountingWorks PRO. Uh, Rebekah, if you could say hello.

Rebekah Winters Barton

Yes. Hey everybody. Looking forward to this one.

Lee Reams II

And one of the themes I want to start talking about, and I've been saying this in a lot of other podcasts, even in some blogs we're doing where we're talking to clients, but um, you know, retention, it's all about protecting your moat, right? And with the world changing with AI search, whether you're bought in yet or not, it's changing. It's happening. The way people decide who they work with, where they get answers to questions is changing. And what you have that these AI tools don't have, that these PE companies doing rollups don't have, that the big firms in it and and and and the big four, even though they're investing billions of dollars in AI, they don't have that moat, which is your client relationships. Okay.

The trust you've built with your clients over the years, the intimate knowledge you have of their financial situations, their family lives, those are things that they cannot buy. Those are things that they cannot create in a tech, you know, app. So, the the whole goal here for small and medium-siz tax accounting firms is to protect your moat. Okay? And we're going to give you some practical ways you can keep clients loyal, engaged, and more importantly, growing with you. And that's the idea of upselling your existing clients. Um, there's a lot of stats and statistics that talk about clients that are just once a year tax return versus advisory clients. Uh, there's much stickier. Obviously, they're going to spend more money with you. They most likely will refer more clients with you and they'll stay with you longer. Okay?

There's more disruption in their life if they leave someone who has a full-on advisory plan and a roadmap going versus a once a year tax return. So let's start with uh I always break these into segments. I'm going to start with the first one uh that is why uh retention matters. And I'm going to go through this uh in a couple ways. So let's start uh why is it so powerful? Harvard Business Review said it can cost 5 to 25 times more to acquire a new client than to keep one you already have. Now think about that, right? That's a pretty big statistic and it it and it it it does uh you know any of the math and you can kind of figure things out.

Cost of acquisition and new clients whatever your marketing is if you have bisdev if you're paying for display ads if you're paying for an SEO company whatever u that's a big deal. Uh Demand Sage did a uh a survey that found that if you increase your retention rate by just 5% your profits can jump anywhere from 25 to 95%. And that's insane leverage. Obviously, you know, if you have the same staff and your revenue goes down $90,000, uh, your margins are changing, right? So, if you can now not lose that and still grow and replace with a nice growth rate with new clients, that's where the the the math comes in, right? Another stat, Thompson Reuters reported that 75% of firms say their clients want more tax and business advice.

Oh my god, what what have all the influencers been saying for a while? you know, get out of the compliance business. Let's get into the advice business. Okay? That's what keeps them around. Uh that's what keeps them coming back and that's what keeps them paying more. So, the question is, you know, isn't should you invest in retention, it's is can you afford not to? And I'm going to talk about this a little bit more. And Rebekah, we hear it in our clients every once in a while. I think it's more the ones that are struggling that, you know, perhaps are not as responsive as they should be to clients. Uh whatever reason, they're not following through. they just think everything magic, you know, goes. But the the investing in the retention side is a big deal.

And we're going to talk about the difference between, you know, someone who has a, you know, they only have a 70% retention rate versus a 95% retention rate. It is a is a big deal when it comes to keeping people. But why do you think, you know, I know we hear it's very rare, but every once in a while and a new client perhaps onboarding, you know, I don't need a market. Why do I need a market? I'm not I don't need new clients. Well, you might not need new clients, but yeah, you do cuz I guarantee you people get married, they pass away, they fire you, they leave, they move. You are going to have retention. No one has a 100% plus growth rate because that's what happens.

What is kind of the conversations you've had with clients and how do you walk them through kind of like to get to that aha moment that oh wait a second, maybe I'm a little misguided? We do we do have people say that periodically like you said Lee, it's not super common. Most people want growth. Most people want new clients. But when we do run across somebody who's like, I don't need to market. I don't have to market. Um, a lot of what we talk about with them are those things you just brought up. Life events happen. They happen to everyone. And when that happens, it may change your situation. For example, we talk about how people move away. And even with virtual services available today from many firms, some people want a local person they can sit down with.

So they might change, you know, their service provider when they move to a different state or they move to a different country, something like that. You also run into, like you said, deaths. Um, you know, especially for our clients who have older clientele, we do talk a lot about getting younger people who are maybe, you know, older Gen Z, millennials, people who now have more of the means that they might need some complex tax planning. They might be starting a business. They might be doing a bunch of side gigs, have a lot of 1099s. Those kinds of people are good options to bring in as you kind of have older people who are perhaps passing away or perhaps no longer need the services for whatever reason.

Maybe they've gone into a nursing home and a family member has taken over their finances. There are a lot of situations that can occur. So, it's always good to be thinking about retention marketing and about how you can kind of keep this cycle going over multiple generations over the years. Yeah. And let's talk about this. The depends on which statistic you look at. The good news for the tax and accounting space retention rates are fairly high compared to consumer businesses. Uh anywhere between 83 to 85 is kind of the average. The low performers 60 70% retention rate. The high ones 90 95. Um so let's pretend you have 100 clients. Your retention rate is the average 85%. You lose 15 clients. So just to break even you need 15 new clients.

And if you want to grow 10% that's another 10. you need 110 clients, right? So, you actually need 25 new clients. So, that's a quarter of your client base and new business every year just to move forward. And then as you go with your a larger database, I'm using simple math, but it's it becomes a much bigger issue. If you have 250 clients, you need 62 to grow. At 500, you lose 75. You need 125 new. At $1,000 clients, you lose 150, you need 250 new. Um that's so you know basically the bigger your firm the more painful the churn becomes and that's why the most scalable growth strategy isn't more ads or leads it's better retention. So let's talk a little bit about that idea of just kind of the math.

Um when you have a client let's say you are at a 70% retention rate and you know your your lifetime value of a client let's say is $4,000. Um, if you could jump your retention rate from 70% to 95%. Um, the the math actually makes it so that client's worth over $20,000 more. Okay, I think it's like 24. And you multiply that by the 50 clients that you've saved, you've just lo unlocked an incredible amount of money in long run uh margins. Okay, so retention is compound interest for your firm's growth. So, if you can just do the math and let's go back to the the 100 clients and uh and I have a 70% churn rate, that means 30 clients are leaving me and let's just say they're spending $1,000 each.

30 times $1,000, that's $30,000 in loss revenue plus now I got to replace them. So, what is my cost of acquisition per client? Is that $500 in marketing? Is it $1,000 in marketing? So investing in a retention plan, whether that be CRM software, a client newsletter, perhaps changing some of your processes inside your firm is the biggest no-brainer of all times, right? You know, if you're spending $3 to $5,000 a year to have a a automated like autopilot retention uh plan across your practice, you know, that more than pays for itself 10 times, 20 times. So it's really important to to really think about. So, let's go into the best practices and strategies. Um, I'm going to kind of open this up to you, Rebekah. I broke them down into like foundation type things.

So, you know, to me that's like your newsletter. That's using um offseason check-ins um or even just health monitoring like tracking who's opening my newsletters, who am I meeting the most, who I have the most upsell activity, and actually kind of scoring uh clients. And then in those check-ins, use tools like Max to create uh perhaps uh interviews just like hey I want to check in with you ask some life event or kind of some probing questions to get to things and I think it really makes a big difference. So let's talk foundation newsletters obviously is the biggest one.

We just did a case study on a client who not finally but they had moved over to our platform and they're like wow what are these huge bumps every time you know on the around the first of the month that happened on my Google Analytics report. So, Rebekah, kind of share what was that and he's going and then I get all these phone calls, but it's like, yeah, it was in fact the newsletter arriving in clients inboxes.

Rebekah Winters Barton

So, the newsletter is a no-brainer. It's something everyone should be doing. We do it automatically for CountingWorks PRO subscribers, but if you're not, it is definitely something you should be putting out there regardless. Um, so here is where we're going to get into just the really foundational stuff. This is something that in my opinion and I think Lee and yours, every single tax and accounting firm should be doing for retention. This is not really optional. It's not super hard stuff. It's basic foundational things that you should work into your workflow at some point during your your week, your month. So, the first is client health monitoring. And this sounds a little bit complex and overwhelming, but it doesn't have to be. So, all this really means is that you need to track engagement.

So that means how many people are opening the newsletter, how often you're talking to someone. Um maybe if they've been upsold into a new package, that sort of thing. Kind of the touch points that you're having with individual clients. And if somebody drops off suddenly, you notice they haven't opened the newsletter suddenly in three months or something like that. Be proactive and reach out. People really appreciate proactive outreach. Um, it's something that everyone in every industry, you know, your clients appreciate and it's no different in tax and accounting. So, I think that's really important is just to it shows that you care. It shows that you value their business and it shows that you're aware of the fact that they have stopped engaging with you and that you're interested in why and what you can do better.

Secondarily, quarterly check-ins with everyone is super smart. It doesn't have to be a long call. You could literally just pick up the phone or even send an email depending on who your client base is. If they prefer to communicate via email, just checking in with them, letting them know that if you want to do an advisory call, we're here for you. Here's a link to book. Very simple, but keeps you top of mind and makes people feel very seen and very valued. And then the third thing is the newsletters that we've already talked about, but segmenting your newsletters is something we haven't mentioned.

It can be very smart, and we've talked about this a lot in different podcast series, but segmenting your newsletter to go out to different groups of people is a great way to provide them with more value, keep them more engaged, and keep them more interested in what you have to say. So, if for example, at the very basic level, you could separate into individual and business clients. Getting even deeper than that, you could, for example, um, you know, segment your individual clients into demographics of generation. So you could have Gen X, baby boomers, millennials, and you could send out individual newsletters to each of those subsegments.

So you can really break that down as far as you want, but doing some sort of segmentation and sending a couple of different newsletters is a really good way to provide a lot of value to your clients.

Lee Reams II

Yeah. And I can't say this enough, the newsletter, a monthly uh consistent newsletter with valuable, relevant information will be your biggest uh ROI of anything that you can do. Don't just send kind of these generic IRS thin tax tips. Um you know, really push into the life events. Definitely segment your client base. If your tool or your CRM doesn't allow it, find one that does that you can say, "Okay, this group of clients is going to get my dual income information. This one is my Gen X information." And it really uh it makes a huge difference in the retention rates, the referrals, and more importantly, people reaching out and asking questions. It feels more personal to them. I think it's a no-brainer. Uh so, let's go into the intermediate level. I have four things here.

Um, some of them are a little more labor, a little more, oh, do I really want to do this? Perhaps you can get an assistant to do it. Some of them are just no easy, you know, like a win back campaign. Create a series of emails or um in emails with a an outbound call. Perhaps uh the loyalty tiers. There's something to to think about in uh let's say your tax planning clients who are paying for advisory services.

You include IRS monitoring free of charge in that, right? or you know there's some sort of like loyalty or they feel uh they're getting something of value that they didn't expect right so surprise them um we say surprise and delight which is what I just said which send a handwritten note or even if it's just a text or an email something uh you saw someone do something in the community perhaps they got an award perhaps they were recognized for community service whatever it is just to be a little more personal right people really appreciate it and it doesn't take more than a few seconds to do that so spotlight a client maybe in your newsletter. A great way people appreciate it. They see others spotlighted.

Um that helps their business, that helps them, you know, doing little case studies about them perhaps. Um it brings business to them. Uh really, you know, easy ways to do it. And then this one's a little more heavy lifting, but if you use a tool like Max or ChatGPT, create some micro courses or even, you know, get into um you know, like even like little email campaigns. We're doing playbooks for these. So, we do these for our clients and uh like we'll do a series for zero users, for example, or QuickBooks uh users and it will talk about tips and ways to use the tools better. Perhaps you have one on dual income um uh clients. And this is again, you know, someone near retirement clients feel educated and supported.

But Rebekah, go into details of kind of how what you what you think of my intermediate list here. Uh, win-back campaigns is is the best one because you would be shocked how many people we just talked about it today. We had a client who was with us for a long time, left us for a couple months and came right back and almost apologized. I have no idea what I was thinking. I was sold by some salesperson. They told me all these things they were going to do and they're not even close to you. All we do is we send him back win back campaigns as well. We get, you know, x percentage every single time we send them. So, a really big win, really easy.

Rebekah Winters Barton

I think these are great. Um, and I think they are something that everyone should be doing if you want to put in a little more leg work, a little more elbow grease. These are not that hard. They're things that you can definitely do and that will definitely help you. So, I think the micro courses are perhaps the most intensive, but once you create them, they will run. Um, you can set them up very easily, drip campaigns, and then you have it built out. It's ready to roll for whenever you want to do it. You can send them even a couple times a year if you want to. you can send them to different groups of clients at different times of year. So, I think that's a really good way to provide value to people.

Um, perhaps if you do one on college savings, for example, you could send that out annually at the appropriate time of year to people whose kids, you know, are nearing college age or who are, you know, becoming parents for the first time even and how they can save over the course of their children's childhood. Loyalty tiers are also a good idea, especially as we just discussed, people are wanting more advisory, people want tailored services, and people love to feel special. So, by offering loyalty tiers, which is something that you see a lot in retail, a lot at restaurants, that type of thing, but not so much in the service- based industry, tax and accounting world.

I think that's a really great idea because it's something that's going to make people feel like they're getting exclusive access and then they're not going to want to leave you because they're suddenly getting all of these little perks just for being your client. And people really do love to feel special even if it's not something huge. Even if it's just a webinar on retirement planning or, you know, a webinar on um a business health checklist or something of that nature for your small business clients. There are a lot of things you can provide that aren't going to be labor intensive for you, but they're going to provide a lot of value and create a lot of trust between you and your client base and make them likely to stick with you for a long time.

And then I think that feeds directly into the make it personal surprise and delight section. So, there's not a lot more to say on this one, but it is a great idea to just send a baby gift when someone has a new baby. Send a graduation present. Send a wedding gift. Um maybe a Christmas ornament to all of your clients. Something like that can go a really long way toward just making them feel like you care and like they're making a good decision by sticking with your firm for the long term.

Lee Reams II

Yeah, these are all good. Now, I'm going to get into advanced, though I'm not sure how advanced they are anymore. They just take a little more effort, a little more um planning. I would say one of them is uh do like an annual or bianual shredding event in your community. So whether that be paper shredding, perhaps it's recycling of computers, uh you know, partner with a local uh uh computer recycling company that is um certified obviously, you know, we want to make sure. But like talking about creating goodwill for your clients, uh you know, the the shredding side, I trust you.

It's a way a I could be there and see people as they come and drop off and and we we can have a real quick conversations but like really big kind of value ads um and it's a great way to partner you know with some other vendors in the area. I think that's a good way. Um, AI personalization. So, uh, you know, sending birthday cards, anniversary messages, um, recognizing holidays, recognizing personal, uh, uh, you know, after a life event, birth of a child, whatever. You know, you try to track all this. Um, there's there's ways that a lot of a tools are able to do this. Um, you know, maybe they're uh, you know, getting ready to sell a business or they you saw some uh promotion in LinkedIn or something. There's a lot of ways to track this.

Just another way to kind of personalize things. Um, great referral partnerships. So, uh, perhaps you can turn some of your loyal clients into advocates by rewarding them for, you know, sending you clients, right? Um, perhaps you co-brand some content between the two of you. Perhaps this is kind of in retention a little bit on this like expanding into family office type services, meaning you have a network. you create a network of the best estate planner, the best life insurance, the best realtor, um, you know, and and then the best attorneys, you know, for, you know, business, uh, QSBS stock, whatever. Uh, financial planners. Um, and I think you can get this group to work together. Uh, you kind of create perhaps this is like a peer group of like a mini family office.

It's another way to really help with retention. They don't think of you as just a source for tax prep or just a source for income statements, things like that. Um, a little more advanced and we're kind of working on some things now. We're not quite there, but doing dashboards and benchmarking. So, give clients some real time KPIs that are different than what they see in like QuickBooks. Perhaps you consolidate multiple databases. You can compare how they're doing to peers. Um, I think that's really nice and, you know, it's in in that dashboard. um there's so much information that they get used to kind of looking at it. Uh so leaving you becomes a little more painful. So the goal here is to make it so you're so responsive.

You're so outreaching, you know, into these life events that they they're not missing things. So meaning they come in in a tax appointment and if you've done zero retention marketing, you sent zero newsletters, you've done not done any webinars, you haven't done any outreach, and your client made two or three decisions through the year that you can't undo that you're not really doing your job. So it's much more than just retention. It it leads into the upsell opportunities. It up it really does um add a lot of opportunities for you. So, uh, retention in practice. Think about it. Um, you know, if a client is, you're sending the client newsletter, for example, and they don't open the last three or four of them. Um, that might be a time to do a personal check-in. Maybe they've been traveling.

Maybe they're just, "Hey, I'm too busy. I don't want to look at this." Um, but if you've never really proactively outreached to see if there's something going on, um, perhaps maybe they are interested in, you know, a a a free planning session or maybe um there's things that you can offer them or at least talk to them that you didn't even know existed, right? So, retention should not be passive. It should be proactive. You want to pay attention before the client drifts away. And that's why a lot of these things, the monitoring uh is is kind of the best practices, so to speak. So, let's close this up. I think we Rebekah, is there anything that I didn't cover in kind of the retention side? I think we've given the math. You know, retention is cheaper than acquisition.

Um, small lifts of retention have massive profit impact. Uh, if you want to do more advisory, uh, guess what? Personalization and outgoing communication is going to be key. And as AI search continues to expand, um those with like cookie cutter newsletters, websites that say the exact same thing and look exactly the same, um these firms are going to have a harder time keeping clients. You know why? And let's get into this. Let's go a little off track here. Um, if if my firm sounds like everyone else and then some new shiny lure comes in who is a a vertical player that has a really good storyline and built a brand that they're going after restaurants in uh San Diego.

Um, they might be proactively pushing content specifically to those restaurant owners and they might make your client feel, "Wait a second, this person cares. You know, it sounds like they actually know my business better than you. How does that affect kind of what's happening now in AI search as well when people are asking ChatGPT who's the best CPA for my restaurants, you know, my six restaurants in San Diego. Kind of explain how that works. Yeah, so what what we're calling this within the industry is geo, generative engine optimization, which basically is SEO but for generative search. So AI search, it's very important. It's where the industry is moving. It's probably quickly become 75% of my job personally is focusing on geo more than traditional SEO.

And one of the things we're learning about geo is that these particular models, whatever model it is that you're using, but AI models in general, generative search in general, they want narratives. They want stories. They do not want basic copy that's just the same thing everybody else has because it helps them to differentiate when there is a unique story.

So, if someone is coming to them with a query about finding a great restaurant accountant, if you don't have any real information on your website about restaurant accountants or very basic information about restaurant accounting that doesn't really differentiate you, doesn't give any anecdotes, doesn't tell anything personal, doesn't tell how you got into it, these systems are going to assume that you don't know that industry as well as someone who does have all of those things I just mentioned, like personal stories and statistics and here's how we help this person and quotes from people and social proof. All of these things in within specific niches and industries have become even more important than they were with straight SEO because all of a sudden generative engines are looking for stories. They are storytellers themselves. They answer you in narrative form.

That is how they operate. So they are reading narratives. So if you don't have a narrative, you're not going to be found, at least not in the way you want to be. So it's really important. Um, it's not just us saying, "Hey, you need to tell a story." Like, you really do need to be telling your story right now because that's how AI search works. And AI search is the wave of the future. So, the more you can tell your narrative, the more you can kind of draw people in with your story, the better off you're going to be both from a user standpoint, a retention standpoint, and an AI search standpoint as time goes by. Yeah, it's about creating conversations both with your prospects. But I'm talking now tying this into retention and your current clients.

So we have found firms that put personal photos up. Um show their personality, talk about their background, what they like to do. Those firms are outgrowing every other firm. That feels a little more generic. You know, you don't put your picture up in your bio page. You don't put your team's picture on the homepage. You don't talk about how you bought in to help the community or a vertical or a niche or a service that you're offering. Um, what you're doing when you do that and you open yourself up is you're creating a tighter relationship and more trust with your clients, okay? And with your current clients. And that's going to be one of the keys to retaining them as long as possible.

Um, remember, the fastest way to grow isn't chasing strangers, is deepening relationships with the clients you already have. Uh at CountingWorks PRO, we have built out an entire retention uh playbook from newsletters to upsell campaigns uh to life uh trigger events. Um we're here to help our clients protect their moat. If you just looked at CountingWorks Pro purely for the retention marketing, it pays for itself five 10 times. If you could retain, let's just say five more clients per month that didn't churn 60 times a year times whatever, let's say, $1,000 or 500, that's significant amount of money. Okay?

So 100% if you're looking if you feel a little overwhelmed you're like I don't have enough time basically to do my job right now you don't have to with firms like CountingWorks PRO we basically taken kind of like a blend of a SaaS business CRM like HubSpot with an agency and used all our expertise now to have a scalable solution that we can support very personalized content at scale and it's amazing. So, if you're interested at all in what we're talking about, visit us at accountingworkspro.com. Love to hear from you. Um, I hope I know retention feels a little common sense, but I've heard from clients who've called us before. Can you turn my newsletters off because I'm getting too many calls from my clients and I don't want to hear from them.

So, if you're in that mindset, maybe we're not talking to you. But if you are someone who says, "Yeah, that's a good thing because I do want to help my clients and perhaps I can find new ways to work with them, upsell them to advisory, become more lucrative, more importantly, I keep more clients for life." That is what the retention marketing podcast has really been about. So, that wraps up this episode of the Growth Minded Accountant Podcast. Uh, as we continue on, we have some good themes that we're working on here in the future. Hopefully this one was a little bit of a recap for most of you and telling you just do the newsletter. If that's all you do, you're going to see you're going to cut your uh churn rates at half probably.

You know, it's just like a consistent monthly valuable newsletter. Don't send thin content. Don't send the generic stuff. That's not worth your time. Um but otherwise, I think you'll be really successful. So again, thank you for listening to the Growth Minded Accountant. We'll talk to you guys soon.