February 17, 2020

PERSPECTIVE #22— IN OUR OPINION, FEBRUARY 17, 2020

(A Continuing Series for Leading CPA Firms)

EMAIL TO PARTNERS AND STAFF: QUALITY WORK

DOESN’T MEAN QUALITY SERVICE

“The first law of service expressed as a formula: 

SATISFACTION equals PERCEPTION minus EXPECTATION”

                                                                    — David H. Maister

Over the years, we have enjoyed reading and internalizing the insights of David Maister, a highly regarded author, speaker, and consultant. Many years ago (circa 1993 — about 27 years ago), Maister wrote a professional service firms article entitled “Quality Work Doesn’t Mean Quality Service”.

In Our Opinion, it would pay dividends to your firm if the messages contained in that article, still applicable to today’s CPA firms (perhaps even more so because of the intense pressure on efficiencies and fees), were internalized by your client service professionals (millennials just entering the profession, as well as partners and more experienced staff). That is why we decided to share our perspective on this topic.

Let’s begin by asking you, as a leader in your firm, two simple questions and by providing you with an illustration that will paint the picture.

• How many of your client service partners truly understand what quality client work and quality client service mean?
• How many of your client service partners and staff know the difference between the two?

Let’s illustrate:

Let’s say that a firm client needs some last-minute international tax planning done and shortly thereafter needs the filing of federal and state tax returns.

A few weeks after the advice/guidance and the filing deadline for the returns, a country club friend of the client (who knew about the required services) asked if your firm accomplished the required tasks.

The client answered “I think so. I have the impression that the partner and staff provided quality international tax advice and the returns were certainly filed on time”. Then the friend asked, “did you get good quality service?” The response was “the service could have been better. I’m not particularly happy with the firm”.

You, as a leader in the firm, are told about this client’s comments and you approach the partner and staff responsible for the services about them. Their reaction was “how could this client possibly be unhappy? We provided high-quality advice and the return was filed on time”.

Sound familiar?

If yes, ask that the client service partner and staff the following eight questions:

• Were you easily accessible to the client?
• Was the client able to easily set a meeting with you to discuss needs and expectations?
• Did you provide the advice and prepare the return expeditiously?
• Did you take the time to explain what you did and why?
• Did you ask intelligent questions to help determine the scope of the work and a fee estimate?
• Did you make the client feel important?
• If complications arose, did you contact the client as soon as you became aware of the complications?
• Did you provide forward-looking advice that would be helpful next year?

As these questions illustrate, the practical meaning of good quality service extends beyond providing tax advice or preparing returns (i.e., good work). To provide quality service, client service partners and staff are not only required to provide the work in a quality fashion, but they are also required to service the client. And yes, from a firm perspective, let’s not forget that the work must be done both profitably and efficiently.

Many clients are unable to distinguish between outstanding technical work and simply competent technical work. In choosing a client service team, many clients pay more attention to the ability to “connect” with the client service partner and staff and the quality of service received than the quality of work performed — which, as illustrated, are not the same thing. And even if clients are sufficiently sophisticated and able to distinguish between outstanding and competent work, their technical needs may simply require competency. These clients know that any number of CPA firms can provide technical advice and prepare the return, and rather than seek out the most highly qualified (and probably the most expensive) client service technician, these clients evaluate CPA firms along several dimensions, including responsiveness, attitude, and other non-technical “service’ criteria.

The central challenge for CPA firms is to profitably and efficiently manage not only the substance of what client service partners and staff do for clients but also to manage client expectations and perceptions. All too often today, many client service professionals provide superior work but it’s not perceived as such by the client. Or, the client service professionals may invest significant amounts of time and effort in dealing with unforeseen contingencies but, because the client did not expect the contingencies, he/she is irritated by the extra delay and expense rather than thankful for the skills and effort. And moreover, the work performed isn’t very profitable because of inefficiencies and poor communications that could have been avoided by addendums to engagement letters.

 IN CONCLUSION  

When looking inside CPA firms, it’s important to remember the three most important keys to client service success: (1) availability, (2) affability and (3) ability — in that order. Client service partners and staff need to be reminded of the most common service gripes by clients which include the following comments:

• “They do great work, but I can never get hold of them. They don’t return phone calls, emails or text messages!”
• “I wish they would keep me informed of progress. This may be just another engagement for them, but to me it’s critical. I want to know what’s going on.”
• “I continually get surprised by the last-minute revisions to my quarterly tax payments. The surprises usually result in the cutting of a check for more than I was prepared to do”.
• “I’m tired of continually getting my tax return delivered on the morning of April 15^th.

Firms lose clients every day because of poor client service. Many times, these losses are attributable to a lack of relationship with the client and the lack of timely communication. Both characteristics are avoidable if client service professionals remember that quality work does not mean quality service. Perhaps it would help if you emailed them a copy of our perspective.

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Dom Esposito, CPA, is the CEO of ESPOSITO CEO2CEO, LLC — a boutique advisory firm consulting to leading CPA and other professional services firms on strategy, succession planning and mergers, acquisitions and integration. Dom, voted as one of the most influential people in the profession for two consecutive years by Accounting Today, authored a book, published by www.CPATrendlines.com., entitled “8 Steps to Great” which is a primer for CEOs, managing partners, and other senior partners. In Our Opinion, is a continuing series of perspectives for leading CPA firms where Dom shares insights, experiences, and wisdom with firm leaders who want to “run with the big dogs” and develop their firms into sustainable brands. Dom welcomes questions and can be contacted at either desposito@espositoceo2ceo.com or 203.292.3277.