CRM in Accounting: The Tide Turns?

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In the North American marketplace, where 90 percent of businesses with more than 10 employees have adopted CRM, there remains a lone holdout industry—accounting. Fewer than 10 percent of accounting firms nationwide have taken on a CRM initiative. But the tide may finally be turning. The entire evolution of "client relationship management," as it is called in the accounting world, has been fascinating to say the least.

To understand why accounting has been so slow to embrace CRM, you need to look at how accounting firms are set up and how they differ from your typical corporate environment. Business development and growth have been traditionally left to a firm's partners, with staff and senior staff executing services. And as partners also have other responsibilities, many firms have been built on a referral network.

So what has changed? Well, a little bit of everything. The competitive landscape began to change with the Sarbanes-Oxley legislation, and from there client churn took a drastic leap forward. Years ago it wasn't uncommon for a client to stay with the same firm for 15 to 20 years. Today, the reality is that many companies switch accounting firms every three to seven years. Add to that the challenge that many services organizations are dealing with: the public perception of services being a commodity.

Buyers have also changed significantly. With the advent of the Internet of Things and access to seemingly limitless amounts of information, buyers can do their own research—the referral networks are not quite what they used to be. As a result, many CPA firms over the past 10 years have begun to invest heavily in their Web sites and are employing full-time marketing professionals for the first time.

Some of the larger firms have even tried employing full-time sales reps for business development, and it's fairly common for firms to track pipeline and cross-sell initiatives in spreadsheets to get a sense of where the next client or project is coming from. We also have firms tracking Net Promoter Scores for customer satisfaction and other metrics around conversion and cross-sell. The net result? A competitive climate where consolidation is rampant and growth challenges are similar to those of non-accounting businesses.

But significant barriers to traditional CRM technology platforms remain. Among the biggest: The structure of CRM technology is foreign in both terminology and process to how many firms operate. Ultimately, firms will need to change how they think about clients and how they interact with them.

A recent study commissioned by Wolters Kluwer, one of the major players in accounting firm solutions, noted that more than 80 percent of clients leave a firm because of lack of attention and the feeling that a firm does not understand their needs. Employee turnover within accounting firms isn’t helping, either. The lack of continuity and relationships has helped accelerate the churn.

So today's environment is ripe for the accounting community to begin to accept there are tools to help them reach their goals. When tax season comes to a close in the next month or so, many firms will be looking at what they can do differently to make a significant impact on their bottom line, and there are many reasons to believe that CRM will be a part of their evaluation.

We have recently seen firms deploying vertical CRM solutions that are built for how accounting firms operate. Others are generating proposals and managing pipeline. The most advanced are integrating their specialized time and billing and practice management solutions for better analytics and cross-selling campaigns.

As Malcolm Gladwell put it in his book The Tipping Point, "The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire." We may finally be reaching that point. Those of us who've worked with these firms for the past 15 years are reminded of when CRM originally took off just after Y2K. It will be interesting to see how fast CRM spreads once it is seen among accounting firms as mission-critical and not an option.


Danny Estrada has worked in CRM for the past 20 years. As a practice leader, he has guided teams through the implementation and development cycles of more than 500 CRM projects. He is the author of the Practical CRM blog and a speaker on real-world application of CRM concepts. You can reach him at destrada@practicalCRM.net.

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