Five Essential Practice Metrics

Okay, face it: You don’t have as many clients as you want. As much as you’d like to call yourself a professional practitioner, tax expert, or detail-oriented accountant, your main purpose for being in practice is getting clients and earning a buck.

Developing Rainmaker marketing skills will help you achieve that goal. But, if you want to know if all the stuff you are doing is working, you need to track your progress. Here are the five best measures of that progress …

1. Brand Awareness is a measurement of the propensity for a client or prospect to recall your firm. To the uninitiated outsider, accounting and the related tax services are a commodity. There is no discernible difference in the product between one practitioner and the next. Prospects will make their selection based on recall and association with the predominant message in their mind. As a local practitioner, you can measure your Brand Awareness through techniques such as attendance at your public seminars and speaking events, or mentions in articles and requests for interviews by local media.

2. Test Drive is also very important when it comes to measuring your progress. You may be closing a high percentage of your presentations, but if you’re only getting in front of a handful of people each week, then you likely aren’t getting very many new clients. There are many ways to measure how many prospects you are developing, including enrollments in workshops and classes you give and subscriptions to your newsletter. If people like the services you offer, your client count will increase. These folks will also tell their friends about you, and then the viral loop will continue as they tell their friends about you.

3. Churn is another key metric for evaluating practice improvement. The industry average in the accounting profession is a twenty percent churn rate. This means that each year you have to replace one out of every five of your clients. If you are losing more than twenty percent of your clients in an average year, then your client retention is below average. You can increase client retention by increasing the share of your clients wallets through higher fees, additional fee based services and improved service quality. Simply adding additional services can have a marked improvement on client retention. The churn rate for a practice offering five or more specialty services is less than ten percent!

4. To evaluate your progress you also want to keep tabs on your Customer Satisfaction. Ideally, your clients will be so happy with your service that they will become Evangelists for you and your practice. That’s a goal worth pursuing, considering many clients consider accounting and consulting services as a utility and become inured to your presence. A simple measurement can be the response to a question such as “Would you recommend our practice to your friends and neighbors?” giving your client an opportunity for a simple up or down yes/no answer.

5. Close Rate is also worth measuring. Your Close Rate is the ratio of the number of presentations you make to the number of client engagements you close. If you have a low close rate, your presentation and offer value isn’t engaging prospects. You also aren’t captivating prospects if they aren’t requesting presentations.

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