Year after year this is a question that I wonder about. As a service company we obviously think about retention of current customers. Marketers and consultants use the lifetime value of a customer as a reason to try to keep all the customers you currently have.
It’s a simple calculation.
Amount you are paid annually x # of years = The Lifetime Value of a Client
I think about this and wonder if anyone has ever put the same equation to the LTV of their CPA relationship. I would say that if you did this you may really understand what the cost of the relationship really is.
With enough common sense it’s easy to understand that there is also an opportunity cost of not moving from a particular relationship as well.
Recently, I took a hard look at what this would really mean for my ideal client. What would my lifetime value of our relationship be? So, let’s just say that I can on average save a business owner $20,000 per year by providing exceptional tax planning strategies and they will likely be clients for 20 years.
20,000 x 20 = 400,000 saved over the life of my customer
Let’s say the average bill per year for my services is $5000.
My lifetime value has allowed my customer to invest that $300,000 over 20 years which if invested well would increase to approximately $500,000.
NOW, WOOT WOOT!!!!
My question to you is…….. was the $5000 per year worth it? You betcha!
So, if there is an opportunity for tax savings available and you are foregoing the opportunity to do it or your CPA is not proactive than it’s costing you REAL money. It’s costing you travel time with family, it’s costing your retirement savings, it’s costing you a new home or college savings.
Oh, one more thing, did you know that just one or two modifications for small business owners could mean a $20,000 or more savings per year. What would you do with that savings? Where would your business be with that type of savings?
This is my passion…..this type of savings would change most people’s lives.
If you are wondering about the LTV of your CPA then it may be time to move on…. If your friends and family are complaining and nothing is changing it’s time to talk to someone who is serious about creating these types of results.
Give them my name…..
We are experts in Strategic Tax Planning, Streamlined Accounting and Customized Training for the business owner in your life (or even you)!!!