What We Can Learn from the 2008 Economic Crisis

By Jean Marie Caragher

The 2008 financial crisis was – at that time – the worst economic disaster since the Great Depression of 1929. The stock market nosedived, wiping out nearly $8 trillion in value between late 2007 and 2009. Unemployment rose, peaking at 10 percent in October 2009. The annual net revenue of the Top 100 firms dropped from around 11% in 2008 to 8% in 2009 to -5% in 2010.

Caren Rodriguez (currently chief marketing officer) joined DMJ & Co. as the first in-house marketing professional in the fall of 2006. At the time, developing a budget, identifying opportunities, and creating a marketing and business development culture were just coming to light.

Her early successes were tactical. For example, moving client updates from fax to email, developing audience channels for more targeted communications, and establishing benchmarks for future growth. Strategically, pipeline meetings were adopted and accessible to all firm members so the business development process was transparent.

“These last several weeks (and now months) have made me incredibly grateful for the processes and approaches we established early on,” says Rodriguez. “What was created in the shadows of 2008 became the framework for our strategy today. I had to navigate the budgeting process from determining spending priorities to evaluating sponsorship requests within those years. What was created out of necessity – like those audience channels – have been relied on heavily to share the developing news with the right audience. Firms with industry and sector focused approaches had to navigate and adjust, and that’s certainly echoing back again today.”

Marketing Budgets

This is certainly the time to examine your budget and make smart, strategic changes. In 2008, Rehmann took quick, aggressive action to modify their growth game plan. “We cut spending dramatically in the traditional areas that are easiest to cut:  events, ads, and sponsorships,” explains Mitchell Reno, principal and director of client experience. “We funneled our efforts toward client cross-marketing strategies and highly focused target marketing in key niches and segments. At that time, we used direct mail and tele-prospecting so that our dollars were highly monitored and could show documented ROI.”

“We were very fiscally careful at that time and our budget was significantly reduced as we evaluated every initiative,” adds Sally Glick, principal and chief growth strategist at SobelCo. “We did spend money, but in a targeted and thoughtful manner.”

“My budget was not greatly impacted,” says Jill Lock, director of marketing, Isdaner & Company. “Other times I might stretch the budget to introduce new programs, but in 2008 I kept to the budget.”

Fees and Pricing

“Post 2008, accounting firms made the classic mistake of price-cutting to win new business—a horrible strategy that I anticipate we may see again,” says Reno. “Marketers would do well to counsel their firms to avoid devaluing their services during crisis. Ultimately, this will hurt everyone.”

Michelle River, president of Fore LLC and creator of Advanced Pricing Methods®, agrees with Reno. “CPAs are a very caring bunch,” says River. “They see long-time customers in need and want to help—perhaps even at no charge as an investment in the relationship. That’s okay, but be wise and measured about what you do for free. Avoid discounting, which devalues your entire firm. For CPA firms, discounting is a race to the bottom. It is the strategy of giants like Walmart who move so much volume that they successfully pressure suppliers for discounts in order to maintain margins.”

River explains that quality CPA firm “input suppliers” are top talent. There are no great people available at deep discounts. Further, the profession is moving AWAY from the high-volume at low-price model, leaving that work for the tax-prep stores and enrolled agents or small bookkeeping shops. Firms that will thrive into the future maximize the opposite business model. The consultative business replaces the outdated “triangle” leverage model with a “diamond” model where the greatest number of professionals are at the middle levels.

“Three important factors in a downturn are: managing work capacity, having predictable revenue, and exceptional communication,” says River. “While some competitors resort to discounting in lieu of better strategies, you’ll want to change the way you position your work and its worth. Maintain your price integrity and become proactive to:

  • Focus on keeping the right customers and team members
  • Draw good, clear boundaries about price, scope and any freebies
  • Price up front, with options, outlining results (or the problems you’ll help resolve) at each level of investment.”

How can you communicate price without being a jerk? River advises:

  • First, acknowledge the strain, “We know this is a difficult time for you…”
  • Reassure about your role and abilities: “I want to do everything possible to help you through this situation.”
  • Clarify freebies and limitations. Be proactive and say, “Here are some things that my firm and I can do at no charge…”  This could be just an initial call, or check-ins every two weeks. “Beyond that, we can work together to determine a budget and decide what work is most important at this time as you shift your priorities. You will know prices in advance and we will figure out a payment plan that works for us both.”


So, what can we learn from the 2008 economic crisis?

  • Examine your marketing budget and make adjustments, as appropriate. “We looked for creative ways to make our marketing program go further on a strict budget,” shares Lock, “with more focus on joint activities with referral sources, a push for unpaid publicity/promotion (developing unique stories to get firm publicity), enhancing relationships with the media, more internal training rather than hiring outsiders (you discover you have lots of talent on your team), and utilizing existing tools better.”
  • Use this time to create or update your firm’s marketing and business development processes and strategies. “One positive impact {of the 2008 economic crisis} was that our staff had a bit more time and motivation to build business,” says Brian Falony, marketing and business development director of Brady Ware & Company. “We worked with them to find opportunities and, for a few, the new focus stuck.”
  • Focus on the needs of your current clients. “During 2008 we were very aware of the impact of the recession on our clients in some niche areas,” says Glick, “and, as such, we focused more on retention and cross-selling than on attracting new business.”

All of us also need to adapt to marketing and business development during a pandemic. “What seems different today is that many of the tried and true methods – networking, seminars, lunches and other person-to-person activities – are on hold,” says Falony. “We do not know for how long or if they will ever return like they used to. Now, we have to figure out how to get the kind of return from webinars that we used to get from in-person seminars. We are looking at ways to better use the information we get from our email campaigns and figuring out how to turn interest into a new client without meeting in person. It is really a different world.”

The article was originally published in the AAM Minute in May 2020.


Is This The Year You’ll Fire a Few Clients?

By Jean Marie Caragher

With my husband’s Navy career moving us around the country we’ve changed accounting firms a few times. With his retirement in 2014 and our relocation to Florida we hired a firm we thought we’d stay with for a long time. However, it turned out the firm was too large for our needs. We were a small fish in a big pond – and we only heard from them when our tax information was due. This wasn’t the expectation they set when we met.

2019 was no different. Our tax organizer arrived in early February, but my husband and I had already agreed to hire a new firm. We did our research, solicited references, held initial consultations, and selected our new CPA.

As March 15 approached, I thought for sure I’d get a call from my old firm looking for my corporate tax information. Not a word. They haven’t called about our personal tax information either.

I think we’ve been fired – in the worst way possible.

Why Accountants Need to Fire Clients

Every firm has them, those clients who:

  • Always dispute your invoices
  • Are slow payers
  • Are unwilling to pay for extra services
  • Are less profitable than other clients
  • Do not provide opportunities for you to cross-sell services
  • Have limited growth potential
  • Do not treat you or your staff with respect
  • Lack trust in your abilities or knowledge
  • Withhold information or are untruthful
  • Place you or your firm at risk
  • Fail to comply with providing information or communicating in a timely manner
  • Have not provided you with new business leads
  • Do not enable you to establish or build a niche

In the Intuit/QuickBooks Firm of the Future blog Ron Baker wrote, “Many consultants of firms estimate that the average firm contains between 10 and 40 percent of “F” customers. It is never easy, but it is necessary, to remove these customers from your firm.”

In the latest available research on the topic from CPA Trendlines, 75 percent of survey respondents indicated they’d like to fire a few of their clients and another 14 percent said they’d like to fire some of them. Thirty-two percent had fired a client within the past 12 months and 20 percent within the past 30 days. Only 10 percent had never fired a client.

With a finite amount of time and resources, not to mention the desire for work-life balance, you want to be sure you are investing in your best clients. Perhaps this is the year you’ll fire a few bad ones.

How to Determine the Clients to Fire

An annual evaluation of your client base is valuable not only in determining the clients to fire but to establish or clarify your firm’s vision and strategy. The AICPA Private Companies Practice Section (PCPS) offers a client evaluation tool to PCPS members, including a standard Excel template, that is adaptable for evaluating a client based on pricing, timing, stress, risk level and overall satisfaction.

For those firms who aren’t PCPS members check out this article by Mark Koziel that includes in-depth information about this evaluation tool along with ranking criteria.

The point of the client ranking process is to use agreed-upon criteria to provide real data to help make smart, logical decisions.

If you aren’t interested in using such a comprehensive tool establish your own criteria, such as:

  • Fee growth
  • Realization
  • Timeliness of payments
  • Enjoyment of working with the client
  • Year-end
  • Preparedness

Create the criteria and process that will work for you and your firm.

How to Fire Clients

First, use the results of your client evaluation to determine the relationships that can be saved. For example, set a minimum fee for tax returns. Then, send a letter to each client who falls below this threshold informing them about your fee increase. You’ll be surprised how many clients will pay the increase. Caveat: Only send this letter to those clients who will truly be better clients for you if they paid more.

This process can also be used for other issues. Be direct and tell the client what changes they must make to remain with your firm. Choose your words carefully so you don’t offend them. Then, let the client decide what to do.

Second, determine those clients to fire – or transition to another firm. Split this list into those clients you’ll meet with or call on the phone and those who will receive a letter. Caveat: Be sure to follow up your calls and/or meetings with a letter so all selected clients have your communication in writing.

Here are a few tips for your calls, meetings and/or letters:

  • Explain that you’ll no longer be able to provide services to them. This could be because:
    • You decided to focus on a particular niche.
    • You’re focusing on clients that meet certain criteria.
    • Firm growth has resulted in the need to reduce the number of clients.
    • You’ve noticed a problem with your working relationship and think another firm may be a better fit.
  • Provide a referral to another firm and assurance that you’ll do everything possible to make the transition as painless as possible.
  • Send the letters return receipt requested so you’ll have proof they were sent and received.

Third, consider packaging a group of nonprofitable clients and selling them to another firm.

Whatever you do, don’t ignore your clients like I experienced.

Use a Facilitator

Just like retreat facilitators keep partner groups focused and accountable, a facilitator for your client evaluation process can do the same. Note: The facilitator doesn’t replace the need for firm leadership and commitment to the process.

For example, a client used the PCPS Client Evaluation Tool. I worked with two partners reviewing the ranking criteria, the timetable, and internal communication. Each partner conducted their own client analysis and the group met to review the results. Unsurprisingly, there were very few “D” clients (on an A-B-C-D scale). There was an unwillingness on the part of the partners to admit the weaknesses in their client bases. Without the necessary firm leadership, the process fell apart.

While working with another client we created our own evaluation criteria. I was asked to meet with the partner most resistant to letting go of clients – who ended up firing the most clients of any partner. Evaluating each client logically and providing encouragement did the trick.

Three Final Points

The decision to fire clients is an important, difficult one. Here are three more points to keep in mind.

  1. The time you spend dealing with bad clients can be spent bringing in new, better clients and spending more time with your best clients.
  2. If your client’s behavior is preventing you from providing them with quality service this is a lose-lose situation. It is time to say goodbye.
  3. The most effective way to reduce the number of clients you need to fire is to implement a formal client acceptance process. This will help you make sure you’re bringing on the right clients in the first place.

Is this the year you’ll fire a few clients? I hope it is since firms that regularly fire clients become more profitable, and have happier clients and staff. Who can argue with that?


Jean Marie Caragher is president of Capstone Marketing, providing marketing consulting services to CPA firms. Download her free eBook, Client Satisfaction Surveys for Accounting Firms: The Answers to Your Most Frequently Asked Questions. Contact her at 727.210.7306 or

Originally published at Accounting Today.