A Guide to the Net Promoter® Scorefor Accounting

Learn how to e�ectively measure and track your client satisfaction using the Net Promoter survey method for accounting.

© Copyright 2014 Inavero, Inc. All Rights Reserved. Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

Inavero, Inc. | www.inavero.com | 715 SW Morrison Street, #400 Portland, OR 97205 | 800-921-2640

What is a Net Promoter® Score?

Survey respondents are separated into the following 3 categories depending on the score they provide.

• Promoters: Respondents that answer a 9 or 10 are highly satis�ed and loyal. They represent your �rm’s strongest allies and are most likely promoting your business to others.

• Passives: Respondents that answer a 7 or 8 are most likely satis�ed, but may be somewhat indi�erent and do not feel loyal to your �rm.

• Detractors: Respondents that answer a 0 through 6 are at high risk of leaving to work with a competitor. Even worse, not only are detractors not likely to refer your �rm, they are more likely to spread negative reviews regarding their experience working with you.

How likely are you to recommend [Accounting Firm Name] to a friend or colleague?

0 1 2 3 4 5 6 7 8 9 10Not at all likely Extremely likely

NPS = % of PROMOTERS - % of DETRACTORS

Why Does Net Promoter Work?

1. The score is a single number, which is simple to track and easy for an entire company to understand.

2. The concise format allows companies to frequently monitor client relationships and earn a high response rate.

3. The lack of anonymity allows companies to follow up directly and resolve individual issues.

4. This method gives companies a tool to celebrate great service, beyond just great sales e�orts.

A Net Promoter Score (NPS®) is a simple metric based on a question that asks a company’s clients how likely they are to recommend the company to a friend or colleague using a numeric scale of 0-10, ten being extremely likely and zero being not at all likely.

Inavero’s Net Promoter survey includes two additional questions, which allow for open-ended responses. The �rst asks the reason for the numerical rating provided in response to the Net Promoter question, and the second asks what the company could be doing di�erently to increase the value of their services.

Your client’s willingness to recommend your business is directly correlated with their level of loyalty to your �rm. When someone is willing to put his or her reputation on the line to recommend a product or service, it’s very likely you have gone beyond mere satisfaction and created a loyal client.

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The ROI of Net Promoter®

How does your �rm stack up against competitors?

Two Ways to Generate ROI with Your Net Promoter Program

Each year, Inavero surveys accounting �rm clients to de�ne

satisfaction benchmarks using the Net Promoter Score method-

ology for the accounting industry. The table at le� identi�es the

average satisfaction levels expressed by accounting clients

who work with a �rm as a lead contact or a day-to-day contact.

Accounting Industry Benchmarks

31%

51%

20%

50

25

0OverallClientSatisfaction

Lead-Contact’sSatisfaction

Day-to-dayContact’sSatisfaction

Net Promoter Score

1. In a recent study of 35 Inavero client locations, Inavero found those with a NPS of 70% or higher grew their revenue two times more than those with a NPS below 70%. Additionally, of those 35 locations, the ones that improved their NPS grew revenue �ve times more than locations with scores that decreased.

Locations that have improved their NPS outpaced revenue growth the following year by 5 to 1, compared to those whose NPS decreased.

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2 Improve your Net Promoter Score

NPS Improved

NPS Declined

>70% NPS

Annual Revenue Growth

Annual Revenue Growth

<70% NPS

2X Revenue Growth

5X Revenue Growth

Company locations that have achieved a NPS of 70% or higher grew their revenue two times more than those with a NPS below 70%.

“World Class”designationis achievedwith at least70% NPS.

Improvementin NPS is tiedto revenue growth.

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Achieve a ‘World Class’ level Net Promoter Score

Establish a Successful NPS® Survey Program

The Inavero Experience: A Proven Process For Excellence

1. We survey your �rm’s clients.

2. We provide you with actionable, real-time client feedback.

3. We validate your data and provide reports.

4. We provide best practices education and tools to help you improve.

5. We award �rms with the best client service.

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Do it right the �rst time

Before embarking on your �rst client satisfaction survey, it’s important to do some planning. Laying the right groundwork will ensure long-term adoption across your company and will help you avoid the big mistakes that are o�en made by companies surveying their clients for the �rst time. Use the checklist below and the information in this guide to help you get started with a successful NPS survey program.

1. Plan (details pp. 4-6)

Get buy-in across the company and establish full team involvement

Determine survey distribution and data collection so�ware

Decide when to survey

Decide who to survey

2. Engage (details pp. 7 & 8)

Write survey communication materials

Prepare employees for survey launch

Send survey and receive actionable real-time feedback

Follow-up with non-responding clients

3. Act (details pp. 9 & 10)

Circulate the feedback throughout your organization

Follow-up with dissatis�ed clients

Share the results internally and externally

Di�erentiate your �rm

Start with Planning Your Survey Details

The Inavero Experience: MyInavero Online Reporting Technology

Inavero’s online survey tool includes the following features:

• Capture client testimonials to help close new business

• Segment data by o�ce, practice area, shareholder or service rep

• Track critical issues through to resolution

• Get real-time feedback to help identify service-related issues

Establish full team involvement

The �rst step is to assemble your internal champion team to drive your program forward across all levels of the �rm. It's key to the success of your program that one of these internal champions is from the senior leadership team. Furthermore, to ensure the program receives the attention needed to be successful, appoint one person within your company to own the tactical components of this program.

Determine a means for survey distribution and data collection

A key decision to make while planning your Net Promoter® program is how you will distribute your survey and collect incoming responses. Some options include paper-based mailed surveys, web-based emailed surveys, and phone surveys. It’s typically most e�ective and e�cient to conduct an online survey that is emailed to clients.

Decide when to survey

Survey timing plays a critical role in the number of responses you receive, known as your response rate. Inavero research has found that clients tend to read and respond to email more o�en during business hours as opposed to evenings and weekends, and email sent on Tuesdays and Thursdays tend to garner a higher response rate.

Decide who to survey

Select any and all clients who have billed with you in the past 6 months. In the accounting industry, satisfaction di�ers largely between those selecting your service and those working with your accountants on a day-to-day basis, making it imperative to survey both key decision-makers as well as influencers.

Once you determine who you will survey, con�rm the accuracy of their contact information. Engage each partner to review your current database and con�rm the client contact information is accurate or have partners provide you a list of their clients’ most updated contact information. This step of the process will be painful the �rst time out, but it’s critical to the success of the survey, and will prove valuable for other marketing and business devel-opment initiatives in the future.

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Quarterly Survey

Planning Your Survey

5 Tips to Get Your Clients Talking:

1. Identify those who love you and help them tell their story.

2. Do something for clients that is surprising and worth talking about.

3. Give clients a reason to be proud of being a part of your community.

4. Create value for the person referring AND the person receiving.

5. Help your clients understand how you’ve helped them.

Your clients’ experience directly impacts the growth of your business

Use your client feedback to understand where the opportunities and threats are with each client. This feedback will help you solidify loyalty, increase revenue, and di�erentiate your �rm. The NPS® survey is the �rst step in building a �rm that’s committed to creating an exceptional experience for each of your clients.

In a survey of more than 300 clients, only 22% say their accounting �rm frequently exceeds their expectations.

Exceptional Client Experience Process

Happy Clients

Increase Client Retention

Raving Fans “passive referrals”

Increased Positive Word of Mouth

New Clients & Increased Revenue

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No one talks about less than awesome service.

5 Tips to Get Your Clients Talking:

1. Identify those who love you and help them tell their story.

2. Do something for clients that is surprising and worth talking about.

3. Give clients a reason to be proud of being a part of your community.

4. Create value for the person referring AND the person receiving.

5. Help your clients understand how you’ve helped them.

Planning Your SurveyThe Opportunity for Accounting Firms

In a highly competitive and fragmented industry, growing your �rm’s revenue heavily relies on retention and receiving referrals from your existing client base. Your clients will only stick around and refer you to others if they are happy about working with you.

In a recent study Inavero conducted with over 300 accounting �rm clients, we learned that just half (49%) of accounting �rm clients report being fully committed to their current �rm. This means that half of your clients may be at risk of leaving your �rm.

We also learned that accounting �rms frequently exceed expectations with around only 1 in 5 of their clients. This means that about 4 out of 5 clients feel their accounting �rm fails to deliver service beyond what is merely expected. Use your NPS® survey to help you identify who is unhappy and create strategies to win their loyalty.

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1%

8%

38%

22%

0% 25% 50% 75% 100%

Detractors (0-6)

Passives (7-8)

Promoters (9-10)

Overall

Percentage of clients who say they are fully committed to their accounting �rm:

Percentage of clients whose expectations are frequently exceeded by their accounting �rm:

22%

37%

75%

52%

0% 25% 50% 75% 100%

Detractors (0-6)

Passives (7-8)

Promoters (9-10)

Overall

Source: Inavero Accounting Client Survey (2014)

Source: Inavero Accounting Client Survey (2014)

No one talks about less than awesome service.

Engage Your Team and Survey Recipients

The Inavero Experience: Consulting for Survey Best Practices

Inavero’s proprietary so�ware platform, MyInavero, paired with individualized support gives our clients the online

surveying tools and best practice resources necessary to successfully measure and manage client satisfaction.

The following list outlines some of the guides and scripts we provide to our clients.

• How to roll out your survey program internally

• How to roll out your survey program externally

• How to respond to negative feedback

• How to increase your response rate

• How to improve your satisfaction score

• How to follow-up a�er each survey

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Write survey communication materials

The initial email sent to your clients inviting them to take the survey should be written utilizing your brand’s voice. This is key to receiving a high response rate to the survey. Additionally, the appropriate relationship manager should electronically sign the email to give your company’s survey a personalized look and feel.

Prepare your team for survey launch

Explain each step of the surveying process internally, including information about what employees can expect and what the experience will be for your clients. For new survey programs, it’s important to focus on receiving a high response rate rather than a high Net Promoter® Score. This will ignite excitement for all the feedback clients will provide - good and bad. In the case that a survey recipient rates your company with a low score, it’s important to prepare your team to successfully follow-up with unhappy clients by providing them with training and sample call scripts.

Send the survey and receive actionable real-time feedback

A�er your survey has been sent to your clients, you will start collecting the feedback to review and take action. It’s key to the success of your program that critical feedback reaches each member of the leadership team in your company in real-time. Once the survey has closed, ask the leadership team to digest the infor-mation and provide bullet-pointed suggestions on improving the score for everyone in your company involved with the account.

Follow up with non-responding clients

While your survey is still open and receiving responses, follow up with clients who have not yet completed the survey. The appropriate relationship manager should make these phone calls. This is a perfect opportu-nity for them to deepen their relationship with the client by discussing their value to the company and what the company can do di�erently to further improve the relationship.

Cra� the Right Email Invitation

Subject: 3-Question Survey

Dear [�rst name]:

Your opinion is important to us. Please help us improve by completing a quick, three question survey on your recent experiences with our company. Please click the following link now to begin the survey: [Link](Please note: If you have problems loading this survey, you may also copy the entire link into your web browser.) For your time, you will be entered into a drawing for a $XXX debit card upon submitting the survey. If you are unable to accept a corporate gi�, [brand] will make a charitable contribution in your honor. Arrangement for either a donation or delivery of your prize will be made once the winner has been selected and noti�ed.

By taking time to share a few thoughts with us on your experience, you are helping us discover ways to improve the service we provide you. Thank you in advance for your time.

Sincerely,

[Email signature name][Email signature title]

Include the number of questions in the survey within the subject-line to increase response rate.

Personalize the email salutation to address your client by name in order to keep the email genuine.

Include the survey link close to the top of the email.

Personalize the email signature so that it feels as though the email came from someone’s personal email.

Including an incentive is a proven way to increase survey response rate.

Double your response rate with personalization

It’s key to the success of your feedback program that each layer of the program is personalized for your clients to increase the likelihood of their engagement and participation.

Personalized Email Invitation Example

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Take Action on Survey Feedback

Subject: 3-Question Survey

Dear [�rst name]:

Your opinion is important to us. Please help us improve by completing a quick, three question survey on your recent experiences with our company. Please click the following link now to begin the survey: [Link](Please note: If you have problems loading this survey, you may also copy the entire link into your web browser.) For your time, you will be entered into a drawing for a $XXX debit card upon submitting the survey. If you are unable to accept a corporate gi�, [brand] will make a charitable contribution in your honor. Arrangement for either a donation or delivery of your prize will be made once the winner has been selected and noti�ed.

By taking time to share a few thoughts with us on your experience, you are helping us discover ways to improve the service we provide you. Thank you in advance for your time.

Sincerely,

[Email signature name][Email signature title]

Circulate survey feedback throughout your company

Provide regional, business unit, and branch managers detailed reports of their survey results. Ask them to digest the information and provide bullet-point suggestions on how to improve scores and ideas for how to create a remarkable client experience.

Follow up with dissatis�ed clients

When calling an unhappy client, it’s important to address the issue without making them defensive. This can be done successfully by referencing the general issue they raised, and not quoting their direct comment. It’s important that they feel like action is genuinely being taken to address their issue or they will stop partici-pating in your surveys and possibly stop using your company.

Best practices for responding to negative feedback:

Never reference actual survey comments, instead have an open conversation about their experience.

Explain the importance of the survey and their individual feedback for your company to improve.

Embrace the feedback and learn from it. Remember that perception is the reality of your clients.

Share the survey results internally and externally

Communicate to all of your company’s clients, not just those who responded, and share results of the survey. Include two things you learned from the survey you’re doing well, one thing you learned needs improvement, and one action item you’re putting into place to make improvements, based on the feedback. This shows clients that their feedback is valued and impacts decisions at your company.

Di�erentiate your company

Many companies claim they provide the best service, but not many actually spend the resources to establish a program that’s solely dedicated to the happiness of their clients. This is a big point of di�erentiation. A survey program provides your clients a reason to continue doing business with you. Additionally, top compa-nies use satisfaction scores and testimonials in new business proposals.

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The Inavero Experience: Di�erentiate Your Firm with Best of Accounting™

Inavero’s Best of Accounting is the nation’s only award that recognizes

accounting �rms that receive remarkable reviews from their clients. The Best

of Accounting program provides an independently validated measure of

service excellence in the accounting industry.

™

Communicate Survey Results

Personalize the email saluta-tion to address your clients by name as a way to keep the email genuine.

List 2 items that your �rm learned you’re doing well.

List 1 item that you learned your �rm needs to improve and list 1 action item you are putting in place to �x the problem.

Personalize the email signa-ture so that it feels as though the message came from someone’s personal email.

Inavero’s Survey Follow-up Method

In accounting, it’s crucial to regularly keep in touch with clients regarding their experience to assure the relation-ship is at its best. To do this without creating survey fatigue, the survey must be short and concise with a targeted follow-up to the feedback provided. Use the template below to follow up with all survey recipients in a way that assures them that their input is valuable to your agency.

Example Follow-up Email

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Subject: Survey Results – Thank You

Hi [�rst name],

Thank you for your continued business and feedback. We sincerely appreciate your time and will use the feedback that we received to improve our services and partnership with you. If you did not have an opportunity to complete our recent satisfaction survey, we hope to hear back from you the next time around. We heard from about xx of you on our last survey and we were pleased to learn that more than xx% rated us a 9 or 10 out of 10! From your comments, we learned that our ease to work with and ability to provide expertise are some of our strongest company characteristics.

However, we also realize that there are a few things we can be doing to improve. Based on what we learned from your feedback, we will focus on improving our responsiveness and direct communication. As a result, we have implemented several key programs that will get us back to the basics and correct our de�ciencies. I will be explaining each of these in detail in our biweekly newsletter in the coming weeks.

[Accounting Firm Name] is committed to providing the best possible experience for you.

Your partnership is greatly appreciated and we look forward to hearing from you in the future.

Thanks again,

Sincerely,

[Email signature name][Email signature title]

The Inavero Experience: Di�erentiate Your Firm with Best of Accounting™

Inavero’s Best of Accounting is the nation’s only award that recognizes

accounting �rms that receive remarkable reviews from their clients. The Best

of Accounting program provides an independently validated measure of

service excellence in the accounting industry.

Subject: Survey Results – Thank You

Hi [�rst name],

Thank you for your continued business and feedback. We sincerely appreciate your time and will use the feedback that we received to improve our services and partnership with you. If you did not have an opportunity to complete our recent satisfaction survey, we hope to hear back from you the next time around. We heard from about xx of you on our last survey and we were pleased to learn that more than xx% rated us a 9 or 10 out of 10! From your comments, we learned that our ease to work with and ability to provide expertise are some of our strongest company characteristics.

However, we also realize that there are a few things we can be doing to improve. Based on what we learned from your feedback, we will focus on improving our responsiveness and direct communication. As a result, we have implemented several key programs that will get us back to the basics and correct our de�ciencies. I will be explaining each of these in detail in our biweekly newsletter in the coming weeks.

[Accounting Firm Name] is committed to providing the best possible experience for you.

Your partnership is greatly appreciated and we look forward to hearing from you in the future.

Thanks again,

Sincerely,

[Email signature name][Email signature title]

Frequently Asked Questions and ConcernsIRS Section 7216 and emailing client satisfaction surveys

IRS Section 7216 was recently updated to reflect changes in the way tax preparation is done with the proliferation of the Internet and new forms of digital communication. It imposes heavy �nes for any tax preparer who knowingly uses or discloses an individual’s tax-related information outside of the tax preparation process without the clients prior consent. The IRS de�nes “tax-related information” to include the email addresses of your tax-only clients. This would generally preclude most tax preparers from marketing their other services via email or selling email information to third parties for use in marketing services.

What about online survey invitation emails?

The IRS does not speci�cally address using an email address to gauge client satisfaction with the use of an online survey. However, the IRS does explicitly permit tax preparers to use email addresses to communicate with individ-uals during the process of preparing taxes as long as the communication relates to the tax preparation. It’s our opinion that this allows tax preparers to send an email inviting an individual to complete an online satisfaction survey based on their recent experience with having their taxes prepared. Getting feedback on any issues with tax preparation is a part of any good tax preparation process.

How do I make sure the email is clearly tied to the process of tax preparation?

• It must be timed so the survey invitation email is sent soon a�er tax preparation is complete, ideally within 4-6 weeks, so it’s still part of the process.

• The email must be strictly about inviting the individual to answer a short survey on their experience with recent tax preparation at your �rm and NEVER contain any marketing related to your other services.

• The survey itself must contain questions that only pertain to gathering feedback based on their experience

with the tax preparation process at your �rm. Therefore, it should NEVER be used for general marketing or product research.

Without prior consent, can I disclose email addresses to a third party to administer the survey on our behalf?

The IRS very clearly gives tax preparers the ability to share contact information with third parties to execute services connected to tax preparation. See the following from IRS Revenue Ruling 2010-4:

“…[Tax preparers] may disclose to an auxiliary service provider, without taxpayer consent, tax return information to the extent necessary to obtain auxiliary services in connection with the preparation of any tax return under § 301.7216-2(d)(1), provided the service provider is located in the United States and the services provided are not substantive determinations or advice a�ecting the tax liability reported by taxpayers.”

The IRS does require that tax preparers utilize only third-parties that have data con�dentiality procedures in place to ensure that tax return information is never improperly disclosed. Various industry trade associations, like AICPA, provide additional resources on how you validate the con�dentiality procedures of any vendor you may use.

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© Copyright 2014 Inavero, Inc. All Rights Reserved. Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

Inavero, Inc. | www.inavero.com | 715 SW Morrison Street, #400 Portland, OR 97205 | 800-921-2640

Resources

IRS Section 7216 – Disclosure or Use of Information by Preparers of ReturnsRev. Rul. 2010-4http://www.irs.gov/pub/irs-drop/rr-10-04.pdf

American Institute of CPAs – Analysis of Section 7216http://www.aicpa.org/interestareas/informationtechnology/ resources/privacy/federalstateandotherprofession-alregulations/internalrevenuecode/pages/default.aspx

Association for Accounting Marketing – IRS Regulation 7216 Information and Resourceshttp://accountingmarketing.org/aamMinuteArchive.asp#7216