This is a guest blog post by Jon Stow. I’ve copied it here with his permission as it is a real life example of an issue I have often addressed in my articles and talks. It contains lessons for many accountants in practice. I’ve added some comments of my own at the end.
When you start out in business for yourself and are providing a service, there is a temptation to take on any client thinking it is all grist to the mill. Each new client will bring in a bit more money. I have been there myself and made mistakes. Part of reason for this blog is to share my mistakes so that others don’t make them.
Of course, low value clients are not just those who don’t pay you much money. Their low value is also because they do not appreciate what your business and you do for them. They accept what you might be doing for you as a commodity, not as a personal service for them.
Still, we can have some lapses and forget our lessons. I saw someone last year, and as she had a new start-up business I thought I would give her a really good starter deal for the first year to help her along and because (I thought) she would appreciate the gesture and we would build on the relationship.
So as it was time to deal with annual matters, though not all that long since we last spoke having dealt with the previous year issues late, I dropped her a line. I had a reply “I won’t be needing your services as my father has managed to do it for me for free”.
So that is me told, in no uncertain terms. She does not need my help or my technical expertise. She would rather rely on an amateur. The sweetheart deal I had already given her was not considered of even such value that she had the courtesy to tell me she did not want me again. She might have paid a fairer price last time if asked, but it is too late now.
There are lessons here:
- Always bill what the job is worth.
- Accept that some customers cannot see value in what we do, ever!
- Some people are just discourteous and rude, but get over it.
- Of course another lesson here is that we never stop learning. Have you had a slap in the face recently?
Jon notes that he wouldn’t normally have taken the client on. I wonder though how many accountants set a minimum threshold for new clients in terms of the first year fees, likely future fees, range of services required and so on? I was talking with an accountant at a function last night. He is one of 4 partners in his firm and he told me that they are only really interested in new clients who are likely to pay at least £3,000 pa. The firm is encouraging smaller clients to move to another local firm. Why? Well the ‘low value clients’ as Jon calls them, are generally more trouble to deal with, more resistent to additional fees and services and distract the partners and staff from providing full service to the more mainstream clients.
Every firm is different and there are plenty of smaller practices that would be very happy with clients paying an average of £1,000 (compared with the £3,000 of my friend from last night).
What is your attitude to ‘low value clients’?