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.

The reason?

No, it wasn’t pricing, although no one should be overly complacent and thinks their clients aren’t price shopping every now and then.

No, it was the lack of personal interaction with their accountants that had them scouting other opportunities. And that dearth of those one-on-one in-office sit-downs has a much to do with the impact of technology than a reluctance to build relationships.

More than 80 percent of small to midsized firms admit they see the majority of their client base once a year – and that’s usually at tax time.

Nevertheless clients much like car buyers like to occasionally feel pampered and rewarded for their loyalty.

And there are myriad ways to do that. Next time they’re in your office, perhaps ask some non-business questions about them, i.e. favorite sports, where they went to school, their families etc.

Focus on the quality of the relationship and not just the quantity.

Remember, there are nearly 100,000 accounting firms throughout the country. Much like Cliff did with the car dealer; it’s far too easy to walk across the street to a competitor.