3 Reasons why it benefits the buyer when clients have been loyal to the seller.
Here is a common statement we hear from sellers: “My clients are really loyal to me personally and many have been with us for many, many years. I can’t see how they will transfer very easily.” To many people buying a CPA firm, this “stickiness” would seem to make a purchase/sale more difficult. In our practice however, we find that this loyalty actually translates into better transitions. Here are three major reasons why:
- The seller’s recommendations carry significant weight. If clients have a trusted relationship with the seller, then they also trust that the seller has carefully selected his/her successor. A lot of that goodwill will flow to the new owner. Clients are also much more likely to trust that the owner will provide the necessary transition assistance to the buyer of the firm to make the hand-off as smooth as possible.
- Clients are less likely to have searched for a “backup” accountant. If clients have been happy with the service and loyal to the owner, then there has been no reason to think about another provider. In contrast, when a practice is sold where the loyalty is not as good, a change in ownership can prompt unhappy clients to go ahead and make a switch that they have been considering anyway.
- Teams tend to be more client focused. More often than not, client loyalty is the result of good service provided by the entire firm. It’s the seller who sets the tone when it comes to client service, and that directly translates into a team that is dedicated to providing quality service. In this case, clients will transition easily when staff remain with the firm.
So if you are buying a CPA firm, you should definitely view at loyalty as a good thing.
It’s a key ingredient for good client retention results. It is then up to you as the new owner to keep that loyalty, by delivering the same great service and by carefully nurturing your new client relationships.