How to overcome the distraction of D-grade clients

Apr 26, 2022 | Sole practitioners, Strategy

You are not alone if you get frustrated by some of your clients. In fact, it’s very rare for me to hear from accountants who love ALL of their clients. If you do, this isn’t the blog post for you. It’s more for those who have one or more clients who are valued only for the fees they pay. Some such clients don’t even pay promptly and even those that do are paying less than you feel would be reasonable for the work you do and the grief they cause.

Stop for a moment and just think about your least pleasing client. Perhaps they are a pain to deal with, rude to you and/or your staff, a bully, ignore your advice, resist fee increases, don’t pay on time, leave everything to the last minute or a combination of any or all of the above!

There are a number of reasons why so many accountants have clients who make their hearts sink when yet another email, message or call comes in from them.

Which of these reasons resonates with you?

  • Avoiding an unpleasant confrontation
  • That’s how the world works
  • Cannot afford to risk losing the fees
  • Fear of handover hassle
  • They have been a loyal (if difficult and/or low fee paying) client for a long time

I have helped many clients to examine and overcome these fears.

I always suggest starting with just the absolute worst client. Making a note of why you would rather they were no longer a client.

Beyond this perhaps you have other D-grade clients. It’s up to you to set the criteria. As well as those that are difficult are those who are not paying fully commercial fees. The difference is that the conversation here is more about encouraging them to pay you a fair fee (and risking them leaving if they choose not to do so).

Here’s how I suggest ranking your clients:

A-grade clients

The best ones. Those that are ideal. The type of clients you most want more of. It’s up to you to decide what criteria qualify a client as A-grade. For example, it might be any or all of the following: The size of their annual fees, the frequency with which they refer other good new clients, the nature of the work you do for them, the range of work, the  appreciation you give, their willingness to pay additional fees promptly, their ability to appreciate, value and follow your advice.

B-grade clients

These clients have the potential to become A-grade clients.

C-grade clients

These are more like ‘bread and butter’ clients. Typically compliance only work. They are no trouble. They pay their fees but these are unlikely to ever reach the level of fees paid by your A-grade clients.

D-grade clients

The Draining and Duff clients referenced above. The ones you would prefer not to have to service. If you have staff, they probably don’t like working for the D-grade clients, they put off dealing with their stuff or maybe they hate them so much they put the D-grade clients ahead of good clients – just so as to get them out of their hair asap.

There is NO law that says you need to accept or continue to serve and support these people. It’s NOT the way of the world. More and more accountants are standing up for themselves and refusing to continue acting for D-grade clients. Why don’t you do the same?

By the way, if you have staff, ave you considered the impact on them of having to deal with D-grade clients? They probably find it demotivating and stressful. In some firms the added pressure contributes to staff taking more time off work and that has a knock-on impact on those in the office. It can even lead to staff leaving a firm sooner than might otherwise have been the case.

Recommended actions

  1. Start by identifying your worst client. This is the first one you really would like to ‘lose’. Draft out the ‘break up’ email message you would to send them (and, if relevant, the message you want to be able to send your staff) explaining why you cannot continue as their accountant. DO NOT put the client’s name in the Addressee box of the email until you are ready to send it – to avoid any risk of it going prematurely!  Relish your anticipation of the feeling of relief that will follow once they cease to be a client.
  2. If you feel you cannot yet afford to lose the fees paid by this worst client, make yourself a promise: That you will send the break-up email as soon as you have sufficient new fees agreed to cover the loss. I know accountants who have found this creates an incentive to secure those new fees!
  3. List out the other D-grade clients and whether you would prefer them to pay higher fees or cease to be clients regardless.
  4. Decide how to approach those who should be paying you higher fees. And then do it. Typically a good proportion of such clients (if approached fairly and professionally) agree to pay more realistic fees. More than enough to cover the lost fees of those who refuse to pay more.
  5. Decide how to approach those others who you don’t want to continue as your clients even if they were to pay higher fees.

Over the years a number of accountants I have worked with have followed the actions set out above. As a result they have increased their average fees, improved the quality of their client base and been able to devote more time to the clients who appreciate their work and advice.

Those duff, draining D-grade clients are an unproductive distraction. It’s up to you whether to allow this continue or if you prefer to take action to change things.

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