By Amy Franko
During COVID, over six years ago, most accounting and advisory firms had so much business they couldn’t keep up. Any growth was mainly reactive; proactive, strategic growth wasn’t a high priority. Today, the landscape around growth couldn’t be more different.
For CEOs, Chief Growth Officers, and Partners, the relevant decision points include evolving go-to-market models, outside investor potential, and expanding service offerings.
The myth plaguing most firms today with organic growth is that new client growth across all sectors will save the day. Growth can’t come from new clients alone. New clients represent at most 20% of a firm’s growth. The real growth vulnerability for firms sits with their existing client base. Organic growth via existing clients remains the highest probability lever for firms who want improved control over investments and outcomes.
This article delves into key risk areas, client signals that can’t be ignored, the most important structural elements of cross-serving, and actions that firm leaders can take today to make improvements.
Growth Risk #1: Relational Atrophy
Firms aren’t necessarily losing a client outright. Instead they’re experiencing relational atrophy by losing pieces of the client over time. Relational atrophy is the greater risk because it can happen slowly, over time. Competition is increasing across both core and non-core services. Competitors will surface from a variety of sources, and they’re not just other accounting firms. By not prioritizing organic cross-serving growth, firms lose relevance, influence, and “share of client” over time.
If firms aren’t expanding the client relationship and delivering relevance across the client, someone else will. Organic cross-serving is both a growth strategy and a protection strategy.
What are some of the risk signs a firm can look for that signal this atrophy?
- The belief that a long-standing client relationship is a protected one.
- Top clients where your core services have been in place, but nothing new has been introduced.
- Scenarios where client needs are expanding beyond your current scope.
- Fee increases are your major source of revenue growth, especially in top clients.
Growth Risk #2: Competition Outside Your Firm’s Peripheral Vision
There is no easy list or straight line to understanding who a firm’s competitors may be. A firm’s competitor five years from now may not exist today. Competition will build around your firm, and it will also be inside of your client in the form of indecision. Additionally, for firms who continue to organize by service line, they will experience even greater competitive challenges by not having a foothold in specific industries. Within industries, it’s critical to understand sub-segments and diversification; when one industry experiences downtown, others may be thriving.
What are the risk signs that a firm can look for when it comes to competition?
- If you are in a client with only a single service, this is a major risk signal.
- Where private equity or venture funding is being made, especially within your key industry sets.
- Niche providers, such as technology companies and fractional firms, being connected to your clients, or the broader industries you serve.
- Having unmet demand that your firm cannot fulfill creates entry points for competition.
- New projects or initiatives are happening in the client that you can (or should) play a role in, yet you are excluded. The number and level of strategic conversations are declining and perhaps becoming more transactional.
- Very importantly, parallel relationships can form before there is a visible threat to your firm. For example, a client will begin establishing relationships with these competitive organizations before a need arises, and that relationship runs in parallel and invisibly to you.
How Does an Accounting Firm Improve Organic Growth & Prevent Client Atrophy?
Solution #1: View Client Expansion as the Firm’s Operating System
The firms that consistently expand client relationships don’t rely on individual rainmakers or occasional introductions from partners. Instead, they operationalize client expansion across the firm. Instead of seeing cross-serving as a sales initiative, it is viewed as a firmwide visibility system. The firm operates from the viewpoint that the client buys the firm and not the partner.
Importantly, firms shouldn’t assume that long-standing clients are stable clients. In many firms, the client relationship remains concentrated around a small number of services or a single partner relationship. Meanwhile, the client’s business continues evolving around them. This creates relevance gaps that competitors can enter quietly over time. An operating system viewpoint mitigates this risk.
Firms that prevent competitive encroachment make client expansion systematic. Some examples include:
- Mapping client needs across industries and service lines – not just today but for the future.
- Improving internal fragmentation problems and competitive barriers.
- Conducting revenue and strategic reviews to understand future client priorities, not just current engagements.
- Creating expectations that relationship intelligence is shared internally instead of remaining isolated within individual practices or partners. This expectation is backed up by the right technology stack to enable the behavior.
Solution #2: Evolve from “Industry Branding” to “Industry Behavior”
Many accounting firms already market themselves around industries. They have specialty pages on their websites, industry conferences, thought leadership, and designated leaders. But clients do not experience a firm through its marketing structure. They experience it through the firm’s behavior.
Importantly, this is not simply a marketing or practice growth issue. It’s operational and cultural because many firms still reward individual relationship ownership. Major support systems, like CRM, billing systems, and P&L structure, haven’t caught up, which reinforces old behaviors. Industry growth efforts become difficult to scale when the operating model still behaves primarily through independent service-line structures.
Industry behavior has some key components to it:
- The firm operates with coordinated visibility around the client and the broader industry ecosystem.
- Marketing, business development, and sales motions are organized by industry, with support from services and service lines.
- Key support systems, like CRM, billing, and financial structures, are evolving to support industry growth.
- There is support at the highest levels of the firm to adopt these new ways of thinking and operating.
This Matters to Independent and Outside Investment Growth Models
These risks and solutions apply to firms who remain independent or take on outside investment. Outside investment will spotlight the risks and solutions even more, because more accountabilities will be required.
In both environments, leadership teams will face increasing pressure to improve organic growth, protect client relationships, and demonstrate stronger expansion. Firms that behave like holistic growth systems will have significant advantage over firms that continue operating as collections of individual performance.
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About Amy Franko
Amy Franko is a growth strategist, keynote speaker, and advisor who helps professional services firms accelerate growth and modernize their sales approaches. Her book, The Modern Seller, is an Amazon bestseller, and she is recognized by LinkedIn as a Top Sales Voice.
