HKICPA building client relationships feb 2011

Presented by : Robert Sawhney, Managing Director, SRC AssociatesLtdVenue: Auditorium, Hong Kong Institute of CPAsDate: 28th Feb 2011Building client relationships in the Asiancontext

Disclaimer The materials of this seminar / workshop / conference are intended to provide general information and guidance on the subject concerned. Examples and other materials in this seminar / workshop / conference are only for illustrative purposes and should not be relied upon for technical answers. The Hong Kong Institute of Certified Public Accountants (The Institute), the speaker(s) and the firm(s) that the speaker(s) is representing take no responsibility for any errors or omissions in, or for the loss incurred by individuals or companies due to the use of, the materials of this seminar / workshop / conference. No claims, action or legal proceedings in connection with this seminar/workshop/conference brought by any individuals or companies having reference to the materials on this seminar / workshop / conference will be entertained by the Institute, the speaker(s) and the firm(s) that the speaker(s) is representing. 2

Clients, clients, clients!! http://www.youtube.com/watch?v=oaWDdgZ2Q6I 3

Take an holistic view (Source: Maister, D. PracticeWhat You Preach, Free Press, 2001) 4

Why firm culture is so important The recent review and findings by the Accounting & Corporate Regulatory Authority of Singapore (Acra) that accounting firms in the region are struggling with audit quality should make firm leaders sit up and take notice. Research has shown that auditors are more likely to accept risky client assignments if they believe it would lead to further work In a paper published in Behavioural Research in Accounting by Jenkins et al (2008), the authors set out a number of areas whereby culture can impact a firm’s governance and the role that seniors within the firm play through their behavior such as mentoring, client interactions, communication, and social influence. They highlight a number of studies and situations whereby firms have engaged in unethical actions (lowered audit quality) due to the cultural conditions of the firm. Primarily, those cultures that value revenue generation over all other activities tend to be at most risk 5

What do clients really want? Responsive firm Professionals that speak in simple terms and show empathy Firms that understand their business and industry Firms that add value to what they do Firms that are reliable Firms that are flexible Firms that offer services which are of real benefit Quality work and service Firms that show interest in them without always looking for fees Regular and unprompted communication 6

What prevents this? Hourly billing that does not recognize value and creates conflict of interest between client and firm Focus on billable time and utilization rates Associates trained in technical skills but not in management Professionals with high IQ and little EQ Firm structure that inhibits cross functional sharing of information Professionals with little formal business training Senior partners with high resistance to alternative ways of working Fixation on practice areas as opposed to client problems Focus on cross selling without understanding client needs 7

Question? How many here conduct (at least every 3 years) systematic, formal internal and external research? OK, how many here can clearly articulate their value proposition vis a vis their competitors? 8

Why clients leave! (Source: Dunn and Baker. Firm of theFuture, Wiley) My accountant (CPA) doesnt treat me right (two-thirds of the responses). CPAs ignore their clients. CPAs fail to cooperate. CPAs let partner contact lapse. CPAs do not keep clients informed. CPAs assume clients are technicians. CPAs use clients as training ground for new staff. Clients said they were satisfied but still left!! Why?? 9

An audit example (Source: Client satisfaction and big 6 auditfees. Contemporary Accounting Research, Vol. 16, Iss. 4; pg. 587)‘Firmswere able to differentiate their serviceand charge a premium’ Both the CPA firm and the audit team as a group (at the senior level and above) had the necessary industry expertise to effectively audit your company The CPA firm was responsive to your companys needs The audit team members as a group always exercised due care throughout the engagement The CPA firm has a strong commitment to quality. The executives (partner/manager) from the CPA firm were actively involved in the engagement The audit team members interacted effectively with the audit committee before, during, and after the audit engagement The audit team members had high ethical standards and were very knowledgeable about accounting and auditing. 10

Relationship quality model in high credenceservices(Source: Chen, ZX., Yizheng, S., and Da-Hai, D. An empirical study ofrelationship quality in a service setting, Marketing Intelligence andPlanning, Vol 26, No 1, 2008)Antecedents Relationship Outcomes Quality • Expertise of • Trust • Re - patronage service provider • Satisfaction • Word of mouth • Empathy of service provider • Likeability of service provider • Communication effectiveness of service provider 11

The Asian Context (Source: Oliver HM Yau, Jenny SY Lee,Raymond PM Chow, Leo YM Sin, and Alan CB Tse (2000) RelationshipMarketing the Chinese Way. Business Horizons, Jan-Feb, 2000). Relationship Building and Maintenance Social interaction Informal discussion Gift giving Non business favours Building trust Relationship Dimensions Bonding Reciprocity Trust Empathy 12

In summary Client relationships can’t be built through workshops, training, and CRM initiatives Culture is not something which is ‘wishy washy’, as a market orientation, it is the foundation of firm success Satisfied clients still, leave. Pro activeness becoming an increasingly important part of responsiveness 13

Thank You! If you want any of the full references for work cited or have any questions, please feel free to contact me: bob@srchk.com, www.srchk.com Blog: www.marketingasia.typepad.com Twitter: http://twitter.com/robertsawhney LinkedIn – Robert Sawhney Our Books: 14

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HKICPA building client relationships feb 2011

by Robert_Sawhney on Apr 06, 2011

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HKICPA building client relationships feb 2011 — Presentation Transcript