Most people have a very specific idea of metrics and KPIs. They think about sales, expenses, and other financial figures as the primary subjects for the most important KPIs. Digital marketers and others experienced with web and social media analytics may associate metrics with things like search traffic, organic views, click-through rates, etc.
However, we’ve found there’s one type of number that too many accounting firms tend to ignore: client service metrics. Thanks to the advances in technology, we can easily apply metrics to this area of business despite many believing it has more to do with soft skills and communication than hard numbers.
In fact, there’s a good argument that service metrics may be the most important numbers of all. Accounting firms are ultimately service businesses – if you aren’t providing it sufficiently to your clients, they won’t stick around very long.
When it comes to measuring your accounting firm’s service, here are 5 of the most important numbers we advise clients to keep tabs on:
Also known as “first reply time,” this number measures how long it takes you or your customer service department to respond to an initial inquiry. This can be measured on a number of platforms, from traditional email and social media channels to relatively new areas like client portals or messaging apps designed to streamline accounting firm communications. A slow response time may be something to investigate, but it all depends on the context. If you’re a small firm or the issues clients have aren’t as pressing as other concerns, a slow response time may not be a significant problem.
This is a number that tells you how many times a client’s question or issue gets resolved the first time they reach out to your firm. A high first-contact resolution rate is almost always a good thing. If your firm’s numbers seem a bit lacking in this area, it may be worth looking into – although the first-contact resolution rate could be skewed if your clients only get in touch when they have especially difficult or complex problems.
Churn is the number of clients who are lost (or churned) each month or quarter. Although some might associate churn with sales figures, in most companies (accounting or otherwise), the sales team doesn’t have much control over the client’s experience once they officially sign up for service. From a practical perspective, churn is mostly the domain of customer service. It’s the service that clients experience that determines whether or not they want to continue working with a particular company.
Accounting firms are typically relied upon to be long-term partners. If you feel you’re losing too many customers each week, month, or quarter, it’s a symptom that some part of your service needs to be improved so clients want to keep working with you.
This is a classic customer service metric that tells a company how satisfied a client is with their interaction, service, or purchase. It’s typically offered to clients as a number-based survey from 1 to 5 or 1 to 7, with the lowest number 1 representing the least amount of satisfaction and the highest number representing perfect satisfaction.
CSAT scores can be analyzed in several different ways, but one simple method is to divide scores into two buckets: satisfactory and unsatisfactory. For example, a 1 through 3 might be considered non-satisfactory, while 5 through 7 are satisfactory, and 4 is neutral. Using this method, you can determine what percentage of responses were satisfactory and what percent were not, giving you a broad overview of what clients think about your accounting service. From there, you can dig into specific areas that may need to be improved to boost satisfaction.
Another classic metric that’s been around for many years, the NPS scale was originally developed by the famous consulting firm Bain & Company. An NPS survey asks clients to rate how likely they are to refer a friend to the product or service, typically on a scale from 1 to 10. Those who rate from 1 through 6 are considered “detractors” who may spread negative impressions of the service; those who respond with 7 or 8 are “passives” who won’t affect the service either way, and those who answer with 9 or 10 are “promoters,” loyal clients who will openly tell others about their positive experiences with a brand or service.
Your accounting firm’s goal is to create as many promoters as possible as some of the best products and services in history have: think about the iPhone, the early days of Netflix, etc. One of the nice things about the prevalence of the net promoter survey is there are many resources available on how to collect, interpret, and act on these scores.
As an accounting firm, you’re already working closely with numbers in one form or another almost every day. There’s no reason to shy away from a similarly deep understanding of service metrics, which help your firm get a stronger grasp on how clients respond to the accounting assistance you offer. With a comprehensive accounting practice management software suite, service metrics and other key numbers you need to run your firm strategically can be made readily available in a format that works best for you to get the most out of these valuable numbers on a daily basis.
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