Discussion:Client Churn Rate
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| 17 September 2008 | |
| I recently (1/08) bought a portion of a tax practice from a "mom & pop" EA team. While cash flowing ~75%, I am concerned about a 20% "churn rate". Any suggestions... I'm not interested in always working with strangers.
I did pull the plug on RACs & RALs (on moral grounds). I have a feeling most of the churn is in that market segment. I lost around 30 clients but converted an equal amount to direct deposit/check mailings. I am amazed that most of these people had no idea how much they were being charged. Any thoughts, suggestions... | |
Fort Wayne CPA (talk|edits) said: | 1 October 2008 |
| I do not think a "churn rate" of 20% is at all unusual when taking over another practice; especially considering that you dropped RAL's.
If your "churn" rate is 20% this next year then I would worry. We lose about 2% of our clients per year. Mike Sylvester | |
| 2 October 2008 | |
| Actually, my predecessor's churn rate was 20%.
I think I'll be okay with the remaining non-RAL clients that I have left. | |
Fort Wayne CPA (talk|edits) said: | 8 October 2008 |
| I would be concerned with a predecessor "churn rate" of 20%.
Mine is about 2% a year. That is low and we are relatively inexpensive; however, 20% is awful high in my opinion. | |
| 8 October 2008 | |
| the RAL/RAC business is not loyal and they are also often highly transient | |
| 28 October 2008 | |
| What about some new decorations around the office? Jazz things up a little bit. Let them think you are on the cutting edge. Also, it's been scientifically proven that clients associate a good business with a good smell. You can get scent dispensers that will automatically dispense at 15 min. to 1 hour intervals. I swear, you can't beat Ozium. Plus, it disinfects the air.
The young clients like a TV going at all times. The volume does not have to be on, just as long as mind-numbing pictures go across the screen. I also hire a clown during tax season to entertain the kids and keep them quiet (it's actually one of my less productive preparers dressed up as a clown). Make sure you check their record before you do this. Kids tend to prefer fat clowns, but a skinny one will do in a pinch. You don't need the clown all day, have him or her come in around 5pm. I buy some sugar free suckers from a dentist friend of mine, and have the clown hand those out also. And, before you ask, no I have never actually been the clown myself, though some of my employess have made snide remarks in this regard. | |
