As you develop your succession strategy, you’ll soon realize that a successful one is not created overnight. Beyond preparation and planning, it requires a mindful execution, especially when it comes to your clients.

This is the third blog in the series. We discuss best practices for succession planning in a tax practice, including how to inform clients about your transition so they feel confident continuing to work with your firm, along with tips for keeping your succession plan up to date and ready when it’s needed.

Succession Planning Series #3:

Maintaining Client Confidence During the Transition

Communication Strategy

Just as with everything else in succession planning, your communication to clients must be prepared in advance so you’re not scrambling at the last minute. Informing clients of your intent to leave or retire from the practice is significant news. A hastily drafted message will come across as unprofessional and inevitably lack key details. Even if you haven’t yet found a successor, drafting a template now with basic information is advisable.

Medium of Communication

You know your clients best and how they prefer to communicate. Email is typical and an acceptable, effective way to inform them of a transition. It lets you plan exactly what you want to say, how you want to say it, and when you want people to find out. Some clients, though, may prefer a phone call over an email.

However you choose to communicate the message, do so in an organized way so clients don’t hear about it from others before hearing it directly from you. You also want to give clients the opportunity to talk to you if they have any concerns or questions.

Timing

Inform clients as early as possible so they have time to become familiar with your successor and build rapport and trust. If you’re planning to retire, communicating your plan to clients a year in advance is recommended.

Once you’ve informed everyone, start copying your successor on emails and including them in calls so your clients can get to know them before they officially take over.

Tone

The tone should be professional, positive, and reassuring. You want clients to feel like everything is under control. The message should reinforce that clients will continue to receive the level of service they are accustomed to, and that the successor will deliver on that promise.

Retention Tactics

High-Touch Outreach

The last thing you want to do is make clients feel like just one of many. Sending a mass email to your client list, even if blind copied, to announce your plan to step away is not recommended.

Adding personalization goes a long way in reassuring your clients that you care about them and value their loyalty.

For your top clients, a group call with you, the client, and your successor is a good idea. It will give them both the chance to meet while you lead a discussion about their situation, helping them feel comfortable moving forward.

Service Enhancements

Offering service enhancements during a transition can increase value and improve client retention.

• Ideas for service enhancements include:
• Offering regularly scheduled check-ins
• Leveraging your successor’s expertise by offering new or niche services
• Assigning a single point of contact for each client to address all concerns and ensure continuity of service
• Proactively communicating tax updates either with quarterly newsletters or a blog

Feedback Loops

Clients appreciate feeling heard and knowing that what they have to say matters. During a transition, it is especially important to give clients a way to share feedback and to address their concerns.

Even after the transition period ends, suggest that your successor elicit feedback from clients after a deliverable or point of service.

Keeping Your Succession Plan Up to Date

A succession plan should not be created and then set aside, only to take it out when it’s time for a transition. You need to review your plan, ideally, annually to make appropriate updates and assessments.

Succession Audit Checklist

Create an audit checklist for your succession plan to remind you what to look for during your annual review. Items to include on your checklist include:

• Updates to timeline and milestone dates
• Updates to roles and responsibilities
• Changes to personnel applicable to the plan
• Communications to clients, team, and stakeholders are prepared and edited
• Technology updates, including updates to passwords and usernames
• Changes to CRM and organization
• Successor candidate or list of prospects
• All relevant documents are properly stored
• Updates to contingencies or emergency plans

Tabletop Drills

Your first run-through of the succession plan does not need to coincide with its actual implementation. You can walk through scenarios to test your plan before you implement it. This gives you and your team an opportunity to identify any flaws, missing details, and make edits when the stakes are low, and you are there to catch them.

Metrics to Monitor

After the transition has completed, businesses should monitor metrics to evaluate the plan’s success and identify areas for improvement with the successor.

Client Retention

A key metric of a successful transition is client retention. Track the number of clients who move their business elsewhere and follow up for feedback to identify areas for improvement.

Employee Retention

It’s a good idea to gather employee feedback when a succession plan is announced to understand how the transition is received and address any concerns preemptively. If employee turnover starts to rise, conduct exit interviews to identify any issues related to the transition that can still be addressed.

Conclusion

A successful succession plan comes down to preparation and communication. By keeping your plan current and communicating clearly and thoughtfully with clients, you increase the likelihood of a smooth, successful transition.

In the next blog of this series we will discuss the legal and financial essentials of structuring a transition, as well as valuation models.

By Ashley Akin, CPA

Sources:

• Business Succession & Exit Planning Checklist | Gross Mendelsohn
• Introduce Your Successor to Clients | Investment Executive (IE)