Who Should Bear the Risk of Client Retention?


If an average amount of care and business sense is used, client retention after the sale is almost always a non-issue.  After having facilitated the successful transition of over 100 practices in my 25 years, I have come to expect that nearly all of the clients will stay with the new owner.

If you look at it from the Client’s perspective, you will see that it is a simple matter.  Once the Client gets past their initial reaction when learning they can’t continue with their current CPA; their trusted friend and advisor, they’re left with these options: stay, give it try or leave.

The key to a smooth and successful transition is quite simple; the Client has limited options. The Client still needs an Accountant and the services that go along. Now however, they’ll have a new CPA, who comes with a great endorsement from their trusted advisor who has been doing their books forever.

Sure, a Client can always leave, but typically they won’t for several reasons.  Finding a new CPA that they can trust in the same way is risky, a lot of hard work and darn right scary.

They can use Google for a new CPA. Then take time to make call(s) and set up interview(s) with a new CPA.  Some Clients may even have a neighbor or friend who has been trying to get him to let them “do his books”. Maybe his best friends’ Sons’ Girlfriend just got her accounting degree, or his Ophthalmologist has an Accountant that he thinks created the universe. This is not necessarily Armageddon for the new owner. There are always several legitimate business and personal reasons why he’s probably not comfortable with a referral keeping his books.

Change is difficult for most, but the new CPA already has all the files, same address, phone number and staff.  Plus, he has the endorsement of the Selling CPA who’s been intimately trusted for years. See my point? Almost 100% will give the new CPA a chance because making a bigger change is much more uncomfortable.

I am writing this for two reasons. Potential Buyers; don’t worry so much about retention! Practice Owners; you don’t need to guarantee client retention. The Buyer has all the control over client retention. He has the ability to offer great customer service and put the Clients at ease. He gets the chance to date his new clients, fall in love with them and marry them. Whether the marriage is successful, is basically up to the Buyer.

The Sellers’ contribution to the deal is actually quite simple. He is bringing the goodwill of his Clients to the closing. He is bringing a list of people who need accounting services and their willingness to use his firm. Finally, he is providing existing familiar staff and business systems that have proven to work well. The Seller can also be a wing man, provide key introductions and endorsements of the new Owner. He can also offer reassurances and problem solve if necessary. He is giving the Buyer good faith support and loyalty.

It’s really that simple.

With good faith on the part of the Seller and good customer service on the part of the Buyer, Clients will transfer nearly 100%.

Clearly a win/win for everyone; Seller, Buyer, Client and Staff.