Strategic Client Development

Reprinted with permission from Accounting Today

When I began consulting with Jim Redpath of Redpath & Co. many years ago, we discussed my
experience in the large accounts division of IBM where the focus was on strategically significant
clients. At the time, the St. Paul-based firm was doing $7M in annual revenue. Today, with
organic growth fueling a $40M+ revenue stream, Redpath is a model of “going up-market.”
Ryan Everhart, the current managing partner, has been integral to that growth and anticipates
leading the firm to even greater heights. In a recent conversation, he explained how Redpath, an
employee-owned (ESOP) firm founded in 1971, has innovated, climbing up and over the
accepted definition to redefine the strategic client growth experience. The approach is built on a
foundation of discipline, organization, accountability, and measurement.

Dramatic Disruption

Jim Redpath led the initiative to disrupt the norm, opening the firm to a dramatic uptick in
large-client revenue. Known as a Client Manager System, the approach is unique in mid-market
firms, because clients are developed at the top and trimmed from the bottom. The focus on the
largest accounts was achieved primarily by introducing a five-figure minimum for new
business, and as partners retired, smaller clients were moved on. Rather than leave them out in
the cold, though, Redpath helped them find a soft landing at firms where they were a better fit.
Such steps not only protect former clients but enhance Redpath’s reputation as a caring
organization.

The method recalls my experience at IBM, where professional Account Executives (AEs) drive
revenue in selected large accounts. In public accounting, by contrast, partners often serve as
gatekeepers. Proprietary about their book of business, they sometimes protect and limit access
to clients, restricting their access to potentially attractive services. The Client Manager System
is an example of an Account Executive implementation. And the AE approach is at the
foundation of a Key Client Program, the subject of my 2022 article published in Accounting
Today.

In addition to establishing a firm minimum and trimming low-revenue clients which possibly
had a change in scope or circumstances over time, Redpath:
• Instituted a cap on an individual partner’s book of business.
• Upended the traditional partner client ownership model, with a Client Relationship
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Manager (CRM) who “owns” the client and brings in experts to meet the needs, in
essence a “land and expand” focus, like an AE.
• Designed a compensation plan that rewards the CRM for all revenue generated in their
“named” clients while still maintaining, per Ryan, the “solve, but don’t sell” mentality.
• Rewards partners for bringing in business, even if it doesn’t stay with them.
• Rejected hourly billing in favor of a project/fixed-fee model.
• Made it easy for clients to communicate with the Client Relationship Manager, i.e. “I like
my audit person, but I’d like to change the tax specialist.”
• Instituted a quick, monthly team meeting to brainstorm, strategize and ensure
coordination of each account.
• Implemented at least one quarterly, in-person client meeting.
• Put in place a tracking system to increase accountability in both the team and external
client meetings.

Proof of Concept

The Client Relationship Manager, who serves as the single-point-of-contact, is measured on
achieving same-day response to all client requests. Ryan credits the response policy with a
nearly 100 percent client retention record. As well, revenue per client is religiously tracked as
an important element of CRM compensation. Creating a responsive, proactive, innovative,
value-driven client experience has become a strong competitive differentiator, all but
eliminating small, one-off engagements for core services, such as the lone 1040 tax return.
Redpath’s robust system has succeeded wildly. This smart, sophisticated approach to growth,
with a large client focus and stellar client service, has surely met its mark.

In growth-minded firms, the Account Executive approach creates relationship leaders who
understand the politics and power in the client decision-making process. AEs use this skill to
reach high-level influencers in client organizations, crafting and executing a strategic and
tactical plan to drive significant revenue.

To witness the growth of Redpath is exciting and reinforces the power of strategic client
development, as originated in corporate settings. Happier and more satisfied clients and more
revenue? What’s not to like?

Copyright ® 2024 by Crosley + Company
Gale Crosley, CPA, consults with accounting firms on revenue growth. She was awarded the
Advisory Board Hall of Fame. She has been selected one of the Most Recommended
Consultants in the Inside Public Accounting BEST OF THE BEST Annual Survey of Firms for 16
years, and one of the Top 100 Most Influential People in Accounting by Accounting Today for 17
years. Gale is an honors accounting graduate from the University of Akron, Ohio, winner of
the Simonetti Distinguished Business Alumni Award, and is an Editorial Advisor for the Journal of
Accountancy. She can be reached at gcrosley@crosleycompany.com.