Relationship vs. Price

We have an old family friend named Cliff, who, like clockwork, bought a new car every two years. For decades he was a faithful Lincoln owner and was equally loyal to one car dealership, where he was on a first name basis with the sales staff and was regularly treated with white glove service.

But a few years ago the dealership was sold and staffed with a fleet (if you’ll pardon the pun) of younger more aggressive sales personnel and suddenly Cliff was viewed as just another tire-kicker on the lot.

He did however select his latest car but had the shocking temerity to ask for two minor upgrades at no charge. Under the old guard, his request would have been rubber stamped in a heartbeat, but incredibly, he was turned down by the sales manager.

So he calmly walked out and ventured across the street to a Cadillac showroom where he now conducts his bi-annual ritual of a car purchase. So for a request on the order of about $250, the dealership lost a 20-plus year customer.

Apparently the age-old axiom of relationship building strengthens client loyalty was lost on that soon-to-be-former sales manager.

It’s much the same for CPA firms, where relationship building often trumps price. Years ago, the AICPA conducted a study that revealed more than one-third of clients at small and midsized accounting firms were mulling a change in firms.

You Can Only Help So Much

This time of year can be charitably described as our company’s “slow” season.

The return on investment for phone calls or the time attempting to schedule a quick visit to firms who are in need of succession help is perhaps less than zero.

Perhaps this is why many of us schedule vacations or large-scale remodeling projects.

This is why I was caught a bit off guard last week when I received a call out of the blue by a sole practitioner. He candidly admitted that he was burned out and wanted to exit the business.

Did I mention he was also 74 years old?

These Guys Just Won’t Quit!

Twice in this space I’ve recounted my experiences with phone scammers pretending to work for the IRS and threatening me with legal action until my delinquent tax bill was paid in full.

Considering the fact I’ve received a refund over the last several years that certainly came as news to both me and Rocco, my accountant.

I’ve even managed to have a bit of fun with the person on the other end of the phone on each occasion before they eventually hung up in frustration. In a similar vein, I’ve been frequently tempted to answer those emails from locales such as Nigeria and Malaysia promising me part of a soon-to-be-received family fortune if I would only be so kind as to first tender $10,000 as a sign of good faith.

But I digress.

Stop Me If You’d Heard This Before

I used to think the oldest line in history was “Do you come here often?”

But now as we encroach on another Presidential election year, that shopworn pick-up line may be usurped by “We need to reform the Tax Code.”

Since I began either covering or consulting in the accounting profession 16 years ago, I’ve heard this pledge more often than a bad Top 40 hit. I once even hosted an editorial roundtable interview with the members of George W. Bush’s ill-fated committee to reform the tax code.

Remember them?

I didn’t think so.

The Talent Conundrum

One of my colleagues at the local gym is a retired engineer for a major software company. Frank (not his real name) tells anyone who will listen that he’s 70, works out religiously and constantly monitors his weight and caloric intake.

You probably wouldn’t be incorrect by labeling his daily routine as “excessive” or even “obsessive” but no one doubts his perseverance when it comes to maintaining his health. With so much energy pent up in his wiry little frame I once asked him why he retired. To me he was like the AARP version of the Energizer Bunny.

He replied that he was obligated to step down under his company’s mandatory retirement age of 65 but still kept active in the workforce as an IT freelancer among residents and small businesses within the community.

The joke among the other members is that Frank is also incredibly smart – he’s knowledgeable on all subjects - just ask him.

I thought about Frank’s situation and its relevance to the CPA community’s constant battle to recruit and retain talent. I never thought that someone’s birthdate should ever dictate how long they should work. We’ve had a number of clients in their 60s say they want to work at least another 10 years.

But that presents what the ancient philosophers used to refer to as a conundrum – a confusing and difficult question.

The Old Order Changeth

Earlier this week I learned that the Top 100 U.S. firms executed a total of 125 mergers over the course of 2015.

And those were just the ones that were announced publicly or via a press release.

If you drill down to the G400 firms (the 400 largest firms after the Top 100) that number is likely closer to 500. And again, many smaller affiliations most likely flew under the radar.

Augmenting that astonishing number of unions was the fact that there were 24 leadership changes among the T100. Let that sink in for a minute – nearly one-quarter of the largest CPA firms in the country had a changing of the guard in the corner office.

So the sometimes unwelcome tandem of succession and transition is alive and well even among the big players.

I “Right” Real Good

There used to be this rather dated joke about accountants and their inability to assume risk and it went something like this: “A CPA’s idea of risk taking is deciding to replace a traditional conservative tie with a bright red one.”

Ba dum dum.

To be fair one or two things have changed in the profession since then (I wouldn’t put the number too much higher than that). While accountants have unquestionably become more sartorially resplendent since say, the mid-1970s, other areas have honestly not kept pace.

Communications to name one.

While no one expects their accountant to be able to fill in for a national news anchor or pen the great American novel, it’s still astounding to me how few have what I would consider good communications skills.

And apparently, I’m not alone in that opinion.