Tuesday, October 23, 2012

The Answer is Yes, What’s the Question?

I’ve known Ed for 25 years.

Ed is one of those people, who, despite not working in a professional capacity (i.e. a doctor, lawyer, engineer), managed to invest wisely and work a number of jobs to retire securely. And by securely I mean his post-work package includes a spacious winter home in Florida.

When it comes to purchasing cars, he’s boring and predictable. With the precision of a Swiss watch, Ed strolled into his Lincoln dealership every two years and ordered a new Continental. By my count, he’s owned roughly 12 Lincoln sedans.

That was until last year.

After a two-decade relationship, he severed ties with his dealership and switched to Cadillac. Why?

He had the temerity to ask them to include a complimentary upgrade that translated to something less than $500. The salesman and later the sales manager basically refused.

So they lost a customer that spent somewhere in the neighborhood of $400,000 with them since the mid-1980s. I can only imagine the fallout once the area director for Lincoln Mercury learned of this egregious faux pas. In a parting shot, Ed took it upon himself to let the territory manager know of his experience in a tersely worded letter.

I read somewhere that one loyal customer is worth more than $10,000 in advertising, so I cannot begin to extrapolate the incalculable loss when Ed defected to Cadillac. Wanna bet how many of his friends Ed recommended the Lincoln dealership to after-the-fact? My guess is zero.

Along those lines, I was speaking with the owner of a small CPA firm in the Northeast who asked my advice about starting a new practice niche — specifically wealth management. It seems one of his long-time tax clients had made some inquiries as to whether the firm would begin offering financial planning, since it was basically a no-brainer as far as client retention and cross-selling strategies.

Unlike the car salesman who basically ignored a rather small request from a repeat customer, the CPA practitioner began to research in earnest what needed to be done to create this new unit — not just for his one tax client, but in hopes of the referrals and increased revenue it would bring.

Now I realize it’s not exactly an apples-to-apples comparison, but you sort of get the idea. With a number of recent surveys indicating that fully one-third of clients are contemplating a switch in CPA firms, citing a lack of personal interaction, it’s probably a good idea to begin listening and taking the pulse of your clients if you haven’t already.

There are probably two out-of-work car salesmen scouring the want ads that probably wish they had.

1 comment:

  1. Great blog, Bill. Good reminder of how to listen and stay in touch with clients.

    ReplyDelete