4 ways to make the most of losing a client

1 Ensure a professional handover

You may not have control over when or why a client decides to leave, but you can absolutely influence how the transition is managed.

Now is the time to make your profession proud: maintain your professional independence, complete all tasks to the highest standard, and create the best relationship possible with both the client and new accountant by keeping communication lines open.

Even though you may not be happy about the client leaving, be timely and polite in all correspondence. Focus on the facts, rather than offering any advice, and make sure you’re clear about which paperwork and documents belong to you and which can go with the client.

During the handover, refer to Compiled APES 110 Code of Ethics for Professional Accountants. It contains guidelines for changes in professional appointments for members in public practice – those concerning confidentiality are particularly pertinent. The IPA has also produced a handover checklist and client termination letter template – find them on the IPA website.

2 Do an internal review

Asset manager and author Karen Firestone wrote in Harvard Business Review that you should take four steps when a client leaves:

“If it’s only one unhappy client, and you like your market niche and feel you’re meeting the goals of the vast majority of your clients – well, tell yourself you were lucky to have had the business ‘temporarily’,” Firestone wrote.

“Losing a big client is never fun, and much less than ideal for your bottom line, but it’s as much a part of business as landing a dream account. And it’s sometimes the fallout of staying true to your style and strengths.”

Losing a client is also a good time to gather managers to review the questions above. Together you should also find answers to:

• Were there any incidents with the client you weren’t aware of?
• How comfortable are your staff with how your company sits in the market?
• Are your prices and services competitive?
• Do your team members have any other market intelligence that could be useful?
• Has the client followed a former team member to another firm?

Not only will the information you collect help improve your operations and assist in keeping other clients, but staff buy-in is also vital if you need to make any changes.

Involving team members in identifying improvements, making decisions and implementing change will enhance staff retention by making them feel valued.

3 Make change and evaluate your client list

Act on the information that came out of your internal review:

• Help team members to refine behaviours if necessary.
• Address any price and quality concerns.
• If the client left with a former employee, review enforceable employment agreements with senior staff to ensure they protect your clients, relationships and intellectual property.

With your existing clients, remember the 80/20 rule, also known as the Pareto principle: 80% of your business will come from 20% of your clients.

Work out who that most valuable 20% is and proactively review those relationships for any potential red flags. This could be through an emailed questionnaire, a quick phone call or even in-person. Consider inviting them to an informative industry event or end of year social occasion and make time to ask probing questions.

4 Gain perspective

Even if you thought you had a good relationship with the client and there was nothing obvious that led to them leaving, they were always free to go.

Maintain your professionalism and friendly demeanour – your client might find that the grass isn’t always greener and return. Or, even though you weren’t right for their specific need, they may still recommend you to friends and family.

Losing a client is an opportunity to identify what needs to improve. Take the opportunity and, when a bigger and better client comes your way, you’ll be more than ready to exceed their expectations.