Client satisfaction is key to long-term success for accounting practices. Measuring it starts with the right KPIs, and there is a particular set of client KPIs that are especially appropriate for accounting firms.
These six client KPIs can be used as strategic KPIs to monitor performance towards strategic goals, but they could also be used as process KPIs to assess the effectiveness of business processes within the practice, or fitness KPIs to provide information on the performance of "critical to quality" steps within a business process. The KPIs are:
The KPIs are:
- Number of active clients
- Clients spending over £x in period
- Client churn
- Client satisfaction
- Net promoter score
- Client support performance
1. Number of active clients
A practice may have many clients listed in its database, but how many have actively commissioned paying work recently? This KPI measures the number of clients who have actively traded with the business within a set period – a quarter, six months or a year. The practice might want to put a financial limit on the definition of the term "active" to exclude minor transactions and concentrate on clients above a certain level.
2. Clients spending over £x in period
This indicator is similar to the first except that it focuses on higher-spending clients. The amount set to qualify as a "premium" client will depend on the business, and this indicator is used to monitor growth in the number of "high service" clients that the practice is able to attract.
3. Client churn
This KPI is a measure of the loss of clients and is the counterpoint of the first KPI. It is the number of clients who were previously active with the practice, but have not been active in the current period. The same definition of period would apply as for the first KPI, along with any financial parameters used to exclude low value interactions. The reasons for clients no longer using the practice need to be investigated, and I would recommend speaking to the client to discuss their reasons to see if it offers aspects of the business that could be improved.
4. Client satisfaction
It has never been easier to survey client satisfaction. Software survey tools are cheap and easy to implement, but that doesn't mean the results are always useful. There is a danger in relying too heavily on the results of surveys for several reasons:
- Achieving a representative sample can be difficult. The people who complete the survey may be a self-selecting group, and it's the people who do not like surveys that you probably want to speak to most!
- People don't like to offend, so getting honest answers, and the real reasons for dissatisfaction, can be difficult.
- Long surveys can become an exercise in ticking boxes, which means the responses may not be meaningful.
Online surveys should be kept short (five questions or less), and should be supplemented with in-depth person-to-person interviews with a random sample to ascertain the drivers of client satisfaction. Any issues raised in a survey should be followed up with the client.
5. Net Promoter Score (NPS)
NPS is a widely used method of scoring client satisfaction. Its advantage is that it essentially involves only one question – "how likely are you to recommend our practice to others?". Respondents score their answer on a 0 to 10 scale.
The clients who answer the question with a score of 6 or lower are known as "detractors", while the clients who answer with a 9 or 10 are known as "promoters". Clients who respond with a score of 7 or 8 are "passives" and their scores are ignored from the calculation of the NPS.
The NPS is the percentage of promoters less the percentage of detractors, so if 50% of clients were promoters and 15% detractors, the NPS would be +35. Clearly a business would like to achieve as high a positive NPS score as possible. A negative NPS, or even a low positive score, suggests there's a problem with customer satisfaction.
An NPS survey would generally be followed up with in-person interviews to help identify specific actions and issues for improvement.
6. Client support performance
A major element of a client's perception of their satisfaction with their accounting practice is the firm's performance in response to queries and other interactions. This covers everything from the way telephone calls are handled, to the speed of response to queries, to a general feeling of how well the practice understands the client's business. A number of KPIs might be used here in combination with each other:
- The time to respond to requests for information/service, or queries.
- Customer perception of client interaction (using an NPS style survey).
- Appointment waiting time for service or on-site visits, or meetings with staff.
- The time to "fix" accounting software or other client system issues.
- The time to satisfactorily resolve client complaints or queries.
- The main reasons for client complaints or negative feedback.
Curious about how to use KPIs more effectively in your practice?
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