Unlocking Your Existing Book

As accounting firms and wealth managers navigate an ever-competitive landscape, the question of where to focus their time and resources has never been more critical. The most successful practices are shifting their strategies from acquiring new clients to unlocking growth opportunities within their existing books of business. By identifying and cultivating high-potential clients, firms can not only grow fees but also future-proof their portfolios with a robust tier of “A” clients.

The New Goal: More Revenue, Fewer Clients
In today’s environment, many professionals are adopting a “less is more” philosophy, aiming to maximize revenue while working with fewer clients. This trend has largely been driven by the go-to strategy of raising prices. For instance, a recent LinkedIn post detailed how one CPA firm owner raised prices by an average of 50% in 2022, resulting in fewer but more profitable client relationships.

While price increases can yield immediate results, they come with a risk: Are you inadvertently losing clients with untapped growth potential? The real challenge lies in determining which clients to retain and invest in, and which to let go.

Don’t Throw the Baby Out with the Bathwater
It’s tempting to assume that the “right” clients are simply the ones who are willing to pay more right now. But focusing solely on current revenue can blind you to the long-term potential within your existing book. Instead of dropping clients based on immediate profitability, why not identify your high-growth “B” clients and nurture them into your next “A” tier?

This strategy offers three key advantages:

1. Cost Efficiency: Acquiring new top-tier clients is expensive and time-consuming. Cultivating existing clients is a more cost-effective way to grow revenue.
2. Rewarding Relationships: Long-standing clients are more likely to value your services, making the growth process mutually beneficial.
3. Revenue Generation: By moving existing clients upstream, you can increase fees and deepen engagements without significantly increasing overhead.

How to Identify High-Growth Clients
The first step in transforming your book of business is a data-driven analysis of your portfolio. Here’s how you can get started:

1. Assess Absolute Size: Look at metrics like total fees, client revenue, or business valuation. Larger clients often present more significant opportunities for upselling or cross-selling additional services.
2. Evaluate Growth Rates: Identify clients with the highest compound annual growth rate (CAGR) or those who have recently expanded their service needs. These are the clients moving the fastest and showing the most potential for future growth.

For example, here is one plotting we saw from the portfolio of one of our customers: 

It is evident that there is a heavy concentration of clients with enterprise value between $1M - $5M. This is the group that needs to either grow or go, but don’t want to be hasty in dismissing because they can fill the next tiers eventually (the < $1M in value is a complete pricing conversation). 

So then, take that $1M - $5M group and segment it by CAGR and valuation total. This will show which businesses are nearing the next tier and which ones are growing the fastest. Its the ones that aren’t growing that have to go. Plot these two elements on a graph to help you pinpoint the top 20% of your clients who represent the best opportunities for additional services/fees. 

Relationship management has a fixed cost component, so focusing on clients who already engage with multiple services—or who can be encouraged to do so—yields higher profitability without dramatically increasing administrative costs.

Turning Insights into Action
Once you’ve identified your high-growth clients, it’s time to develop a tailored strategy to maximize their potential. Start by plotting your clients on a two-dimensional graph:

For these clients, create customized account plans that outline:

1. Cross-Selling Opportunities: Identify gaps in their current service portfolio and propose additional solutions tailored to their needs.
2. Strategic Engagements: Schedule regular check-ins and strategic reviews to discuss growth goals and how your services align with their objectives.
3. Upsell Potential: Highlight premium packages or advisory services that could provide even greater value to the client while increasing your revenue.

Growing Your Practice from the Inside Out
By focusing on high-potential clients within your existing book, you can unlock significant growth with less effort than chasing new business. This approach allows you to retain control over your client base, deepen relationships, and create a stable foundation for long-term success.

With the right analysis and strategic account planning, you might find that your next “A” client is already in your portfolio—just waiting to be nurtured.

Author: Dave Bunce