Building Client Loyalty After a Merger

Source: CPA Practice Management Forum

Authors John L. Montgomery and Lee H. Eisenstaedt warn CPA firms of the danger that clients will defect after a merger or acquisition. Part of the problem is that many firms' cultures and compensation systems – which may date back to the firms' early stages – tend to focus on and reward attraction of new clients rather than on promotion of client loyalty.

To succeed today, firms need to strike a balance between developing new business and cultivating existing relationships. While cultivating relationships is always important, it's particularly critical following a merger or acquisition. Strategies firms can use to achieve this objective include:

• Developing compensation systems that reward activities that promote client loyalty,
• Treating clients as clients of the firm, rather than clients of individual professionals,
• Assigning the best professional for the job to each client task, regardless of department or location,
• Soliciting regular feedback from clients,
• Rewarding professionals who generate new business, whether from new clients or existing clients.

Achieving the cultural change necessary to build client loyalty requires visionary leadership, firmwide commitment, solid client service plans, effective communication, and thorough research to identify client needs and expectations.

For the complete article, read "M&A Threatens Client Loyalty: Actions that Can Minimize Defections."

From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, February 2011, p. 5.