Profiting from the Coming Shift in Client Demographics

If you went to the bathroom last night sometime before morning, as you likely did if you are in the CPA or tax business, you are part of the aging baby boom generation.  I’m right there with you.  I probably went twice, if I can even remember it accurately anymore.

Our profession has aged.  At a recent tax seminar, the instructor asked everyone over sixty to raise his hand.  Ninety percent of the attendees raised their hands.  We also know that millennials will take over the world in about five years.  You know who they are.  They are our children, who won’t answer their cell phones, but immediately respond to texts.

Millennials are different from baby boomers in many ways beyond just communications style.  They demand a fundamentally different experience from their professional advisors, and our profession has been slow in recognition.

First, let’s describe the overall experience millennials expect from trusted advisors, if we can even use the term trusted advisor anymore.  Our generation and a few before thought having a CPA or tax preparer was a big deal.  Having a CPA was a sign they had made it financially.  They were proud to utter, “I met with my CPA yesterday and he advised me…”  They also took our advice without question or followup.  After all we were the experts.

Millennials view their advisors, including CPA’s and investment advisors, as spokes in a wheel circling around their hub.  While we provide important advice to them, we are not their only information sources.  How many times has a millennial told you what he or she knows about a tax topic from Google?  I’m guessing a lot.  Do they get accurate information through DIY research?  Probably not, but that’s not the point.  We are not their only source of information, for better or worse.

Millennials created a new set of rules to interact with professional advisors.  They feel no pride from meeting with us, the way their parents did.  Affluence is a birth right not an achievement.  The best advisor for them is one that provides the most useful information and takes the least amount of time from their schedules.

For us, this means a change in how we view client service.  In the past, great client service meant promptly scheduled meetings and returning phone calls immediately.  Millennials desire neither meetings nor phone calls.  Both are unwanted intrusions.  SPAM has even pushed the youngest of the generation away from e-mail towards opt in communications platforms.

They want to communicate in time efficient ways that avoid unwanted exposure to advertising.  They are the children we raised in an era of TV ads, telemarketing, direct mail, and SPAM.  They restrict access to themselves.

We, as professional advisors, are pushed to redefine our notion of  client service to conform to the communications preferences of millennials.   That means fewer or no meetings, telephone  calls  only when urgent, and  safe places to communicate electronically.

To successfully attract and keep millennial clients, you must communicate using their rules.  For twenty years, we prescheduled tax client meetings.  Last year, we stopped when we realized clients often weren’t coming in, because they wanted meetings.  They came in at their appointed times, because they thought we required the meetings.  Last year we gave them options for getting us their income tax data: meetings, drop off, mail, or post to CPM.  They weren’t new options to us, but to many clients, they were.  Our meetings decreased by 40%.

Previously, nearly a quarter of our clients posted all their tax documents directly to CPM.  After stopping prescheduled meetings, nearly a third posted their documents to CPM.  Mail in’s and drop off’s increased as well as meetings decreased.  Clearly our clients valued meetings significantly less than a decade ago.

To profit from changing client demographics, change your definition of great client service.  Since meetings and phone calls are no longer valued except in narrow circumstances, find alternative ways to deliver extraordinary value.  We use CPM to e-deliver draft tax returns, questions, and engage in conversations on the site with clients.  Clients communicate with us when it’s convenient for them.  We are also attentive to when e-communications reach their limits.  We’ll suggest phone calls or meetings when we can’t seem to get our points across.

Most CPA’s would rather prepare New York tax returns than write.  However, writing is now an essential skill in delivering value to clients.  Incorporate your personality into your writing.  Dry, convoluted prose is worse than no communication at all.  Keep your posts down to three paragraphs or less. You are writing for the Twitter generation.  Yes, you can learn to deliver tax planning recommendations in less than 1,000 words.

Can your canned newsletters purchased from the same services every other CPA uses.  Tell clients what you feel is important through tools such as Constant Contact.  Clients aren’t expecting Time Magazine from you.  They’re happy that you value them by taking the time to craft three paragraphs of information specifically directed to them.  Humor is allowed.  How much do you enjoy reading dry tax newsletters?

Finally, profit from the change in client demographics by being among the first in your market to make your business model millennial friendly.  You’ll find that more and more baby boomers like the new model as well.


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