Building client relationships in the Asian context

Presented by : Robert Sawhney, Managing Director, SRC Associates

Ltd

Venue: Auditorium, Hong Kong Institute of CPAs

Date: 28th Feb 2011

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Disclaimer

The materials of this seminar / workshop / conference are intended

to provide general information and guidance on the subject

concerned. Examples and other materials in this seminar / workshop

/ conference are only for illustrative purposes and should not be

relied upon for technical answers. The Hong Kong Institute of

Certified Public Accountants (The Institute), the speaker(s) and the

firm(s) that the speaker(s) is representing take no responsibility for

any errors or omissions in, or for the loss incurred by individuals or

companies due to the use of, the materials of this seminar /

workshop / conference.

No claims, action or legal proceedings in connection with this

seminar/workshop/conference brought by any individuals or

companies having reference to the materials on this seminar /

workshop / conference will be entertained by the Institute, the

speaker(s) and the firm(s) that the speaker(s) is representing.

Clients, clients, clients!!

http://www.youtube.com/watch?v=oaWDdgZ2Q6I

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Take an holistic view (Source: Maister, D. Practice

What You Preach, Free Press, 2001)

Why firm culture is so important

The recent review and findings by the Accounting & Corporate

Regulatory Authority of Singapore (Acra) that accounting firms in the

region are struggling with audit quality should make firm leaders sit

up and take notice.

Research has shown that auditors are more likely to accept risky

client assignments if they believe it would lead to further work

In a paper published in Behavioural Research in Accounting by

Jenkins et al (2008), the authors set out a number of areas whereby

culture can impact a firm’s governance and the role that seniors

within the firm play through their behavior such as mentoring, client

interactions, communication, and social influence. They highlight a

number of studies and situations whereby firms have engaged in

unethical actions (lowered audit quality) due to the cultural

conditions of the firm. Primarily, those cultures that value revenue

generation over all other activities tend to be at most risk

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What do clients really want?

Responsive firm

Professionals that speak in simple terms and show empathy

Firms that understand their business and industry

Firms that add value to what they do

Firms that are reliable

Firms that are flexible

Firms that offer services which are of real benefit

Quality work and service

Firms that show interest in them without always looking for

fees

Regular and unprompted communication

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What prevents this?

Hourly billing that does not recognize value and creates

conflict of interest between client and firm

Focus on billable time and utilization rates

Associates trained in technical skills but not in management

Professionals with high IQ and little EQ

Firm structure that inhibits cross functional sharing of

information

Professionals with little formal business training

Senior partners with high resistance to alternative ways of

working

Fixation on practice areas as opposed to client problems

Focus on cross selling without understanding client needs

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Question?

How many here conduct (at least every 3 years) systematic,

formal internal and external research?

OK, how many here can clearly articulate their value

proposition vis a vis their competitors?

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Why clients leave! (Source: Dunn and Baker. Firm of the

Future, Wiley)

My accountant (CPA) doesn't treat me right (two-thirds of the

responses).

CPAs ignore their clients.

CPAs fail to cooperate.

CPAs let partner contact lapse.

CPAs do not keep clients informed.

CPAs assume clients are technicians.

CPAs use clients as training ground for new staff.

Clients said they were satisfied but still left!! Why??

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An audit example (Source: Client satisfaction and big 6 audit

fees. Contemporary Accounting Research, Vol. 16, Iss. 4; pg. 587)

‘Firms were able to differentiate their service and charge a premium’

Both the CPA firm and the audit team as a group (at the

senior level and above) had the necessary industry expertise

to effectively audit your company

The CPA firm was responsive to your company's needs

The audit team members as a group always exercised due

care throughout the engagement

The CPA firm has a strong commitment to quality.

The executives (partner/manager) from the CPA firm were

actively involved in the engagement

The audit team members interacted effectively with the audit

committee before, during, and after the audit engagement

The audit team members had high ethical standards and

were very knowledgeable about accounting and auditing.

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Relationship quality model in high credence services(Source: Chen, ZX., Yizheng, S., and Da-Hai, D. An empirical study of relationship quality in a service setting, Marketing Intelligence and Planning, Vol 26, No 1, 2008)

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Antecedents

• Expertise of service provider

• Empathy of service provider

• Likeability of service provider

• Communication effectiveness of service provider

Relationship Quality

• Trust

• Satisfaction

Outcomes

• Re - patronage

• Word of mouth

The Asian Context (Source: Oliver HM Yau, Jenny SY Lee,

Raymond PM Chow, Leo YM Sin, and Alan CB Tse (2000) Relationship Marketing the Chinese Way. Business Horizons, Jan-Feb, 2000).

Relationship Building and Maintenance

Social interaction

Informal discussion

Gift giving

Non business favours

Building trust

Relationship Dimensions

Bonding

Reciprocity

Trust

Empathy

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In summary

Client relationships can’t be built through workshops,

training, and CRM initiatives

Culture is not something which is ‘wishy washy’, as a market

orientation, it is the foundation of firm success

Satisfied clients still, leave. Pro activeness becoming an

increasingly important part of responsiveness

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Thank You!

If you want any of the full references for work cited or have

any questions, please feel free to contact me:

bob@srchk.com, www.srchk.com

Blog: www.marketingasia.typepad.com

Twitter: http://twitter.com/robertsawhney

LinkedIn – Robert Sawhney

Our Books:

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