Young Entrepreneurs: The Future of Accounting Firm Growth: Xero Study
As a firm that has been around since 1995, we have always taken pride in informing new clients about our years of experience and our vast expertise in accounting and finance, AND in multiple industries. Some of the insights from the study conducted by Xero highlight why our approach to differentiating ourselves from other firms might be the wrong approach. We have some homework to do!
We have several clients that fit the millennial demographic and we have enjoyed partnering with them as they push the limits of what has been done to create something new.
Original article is found here.
Xero conducted a survey of more than 1,500 small business owners to study what millennials value in an accounting firm and what they think about their current advisors.
Characteristics of Millennials
Millennials are characterized a lot differently than most older generations. Generally speaking, they are:
Used to operating in an online world
Used to getting what they want with a click of a button (ex: Uber, Amazon, etc
Takeaways from Xero’s Study
Takeaway 1: Growing Your Firm Will Be Difficult Without Millennial Clients
40% of businesses established in the last 2 years were started by millennials. It’s only natural to expect that this figure will continue to increase over the next few years. What that means is that any growth strategy should likely take into account millennials and their unique characteristics as they need to be marketed to and serviced differently.
Takeaway 2: 1 out of 5 Millennial Businesses Attracted to Stress Minimization
Millennials are an extremely stressed out bunch of people according to various studies. There’s no doubt that COVID-19 has only made matters worse as we are now seeing unprecedented levels of anxiety according to the Mental Health Index. An easy, seamless, streamlined customer experience can be exceptionally attractive to a lot of business owners out there. It’s so important for millennials actually, that 39% of them are seeking an advisor that’s “enjoyable to work with.”
Takeaway 3: Taxes Aren’t Top of Mind
Your clients have a lot more on their minds than their tax returns. In fact, only 15% say taxes and compliance are holding their business back. If the majority of your services are comprised of year-end tax work, you’re not actually helping them with their bigger priorities and as such, you’re not as valuable to them as you can be. While tax returns are necessary, if you can free up more of their time to focus on things that are holding back their business growth, you become exceptionally more valuable.
Takeaway 4: Client Satisfaction is Very Low = A Huge Opportunity
50% of millennials are looking to replace their accountant. 1 out 5 wouldn’t even recommend the advisor they’re currently with. This is further demonstrated by the exceptionally low 7.4 Net Promoter Score that these millennials provided, which measures just how likely these business owners are to refer their accountant. As previously mention, millennials want easy, seamless, and painless service.
Takeaway 5: Only 7% of Millennials Are Using Cloud Accounting Software
This is totally baffling to me. How can a generation that’s been living in an online world all their lives not be using cloud accounting software? 18% are using written journals… yikes! It’s no wonder why millennials aren’t happy with their accountants.
Takeaway 6: Millennials Aren’t Getting Client Accounting Services
They WANT Client Accounting Services. This consists of services relating to bookkeeping, bill pay, chasing payments (you can automate A/R collections using this process), and anything else similar. Compared to all services that millennials are paying for, CAS has the largest discrepancy between those wanting it and those getting it. 77% would pay someone to stop having to do it themselves, while only 37% are paying for it. If you push these services to your millennial clients, you’ll likely succeed in bringing more business through the door.
Takeaway 7: Your Team and Their Experience is Not a Selling Point
Experience is not a bad thing; it’s a good thing. But it’s not the reason why millennials are signing up and staying with your firm. According to Xero’s survey, only 15% of millennials are signing up and staying with your firm because of your team. Look at all the other things they value more:
Takeaway 8: A Smooth Client Onboarding is Make or Break
It’s worth pointing out that 37% of millennials who have had a negative onboarding experience are planning to replace the very firm they just joined. It really goes to show that your customer experience must start off on the right foot.
Takeaway 9: Ask for Feedback More Often
Only 18% of business owners get asked for feedback from their advisors. If more firms would ask the hard questions, you’d see much higher levels of satisfaction amongst millennial business owners. Don’t be shy or too proud. Find out what your firm can do better by directly asking for feedback. You’ll only make yourself better.
We thought the study did a great job of highlighting ways firms can become better at servicing all clients, not just millennials.
Our commitment to our clients remains the same: We never stop listening, inquiring, questioning, learning, or seeking new alliances in support of YOU, our client. We welcome the opportunity to continue to learn. If you are searching for accounting and tax services or are looking for ways to outsource your back office support reach out today. We are here to help you off board the tasks that bog you down so you can spend time building your business and helping your clients.
For the full 14-page Xero survey, click here.
The full blog article, Millennials & Your Firm [Xero Survey]: 11 Key Takeaways is here.