Accounting firms have long held troves of client data, but few firms knew how to effectively leverage all that data. Now, big data has become a buzzword in the profession, and it’s impacting nearly every aspect of auditing, tax, accounting and advisory services. With the technologies available today, firms can collect, organize and analyze enormous amounts of data. The question is, what are you doing with that data?
Grow your client relationships with data
Collecting data to have more data isn’t the point. If you’re going to invest time and money into collecting data, you need to have a purpose. One of the best uses of data analytics is to collect metrics for improving client relationships.
Client satisfaction is crucial to the long-term success of your firm. Happy clients are loyal clients, and they tend to return year after year and engage your firm for additional services.
Many firms are focused on growth through new business. While the advantages of driving new business can’t be argued, you can’t overlook the value of maintaining your existing clients. If you lose existing clients at the same rate as you bring in new clients, you won’t grow; you’ll remain stagnant while spending time and money on marketing and business development initiatives.
Metrics for Measuring Client Satisfaction
One way to ensure that your clients are getting the service they expect is to collect metrics, and here are a few ideas for useful metrics to track.
Net Promoter Score
One of the most popular metrics for measuring client service is the Net Promoter Score (NPS). This index ranges from -100 to 100 and reflects the willingness of clients to recommend your services.
Generating an NPS is simple because it involves asking clients one question: “On a scale from 0 to 10, how likely is it that you would recommend our firm/service to a friend?”
Answers are ranked into three categories:
- Detractors rate their likelihood of recommending you at six or lower. They’re not particularly interested in recommending your firm.
- Passives rate their likelihood at 7 or 8. They may be willing to recommend you but could also be convinced to switch firms for a lower price or greater perception of value.
- Promotors rate their likelihood at 9 or 10. They may already be bragging to their friends and colleagues about your service and are happy to recommend you.
To measure your NPS, you simply subtract the percentage of detractors from the percentage of promoters.
Client Acquisition Cost
Another client satisfaction metric you should be monitoring is churn, which is a measure of how many clients stop doing business with your firm over a specified period. There are several ways to measure churn. For example, you can calculate the number of clients that stop working with you in a month, quarter or year or the amount of revenue lost from clients who churned in a period. Either way, it can be an early indicator of client dissatisfaction. A rising churn rate can prompt you to research why clients quit your firm and help you identify ways to reduce your churn rate.
Average Number of Services Per Client
The more services your firm provides a client, the closer entwined you are, the more attuned you are to their needs and the better prepared you are to address their needs. Improving this metric can increase your client retention rates exponentially.
Lifetime Value of a Client
The lifetime value of a client is essentially the sum of all revenues generated from a particular client in the years they’ve engaged your firm. While you may not want to track this metric for every client, it’s wise to track how this metric changes over time for your largest clients, monitor how long they’ve been with the firm and whether you’ve introduced new service offerings to them.
Work turnover measures how many days it takes for your firm to complete an engagement, from when the client information comes in until the client receives the deliverable. Clients value speed and efficiency, so it’s useful for firm leaders to know how quickly projects are being completed to keep clients happy.
These are just a few of the metrics for improving client relationships your firm may track to measure. Your firm should evaluate what your clients value most and look for ways to track those metrics. If you need help gathering the right data, Amelio allows you to choose which questions you ask clients, what data you capture, and how you capture it to report on the data in a way that best serves your firm.
If you’re interested in learning more about how Amelio supports data collection and reporting, schedule a demo with our Director of Product Development.