How behavioural economics can transform accountant/client relationships

Don’t be fooled into thinking people are data-driven – they’re just fishing for data to support the decision they have already made.

The role of the accountant is changing, with technical skills needing to be supplemented by strong interpersonal relationships and the ability to influence clients. These soft skills are crucial in protecting the future value and authority of industries like accounting, where much of the work can be delivered by an algorithm, attendees at the World Congress of Accountants (WCOA) heard on the second day of the event.

By Shannon Cuthbert

Managing relationships and effectively influencing clients who don’t act logically can be frustrating, particularly if accountants aren’t given the right tools and training. 

Bri Williams CPA speaks at WCOA 2018. Photo: Capture Content.Bri Williams CPA, founder and principal of People Patterns and an expert in behavioural influence acknowledged this pain point in her conference presentation, The changing role of trusted advisor - Influencing small business client behaviour, before offering delegates her solution to the problem.

“There are two flawed assumptions about how people behave. The first mistake is assuming that people actually do what they say they’ll do, and the second is assuming that people are rational.

“Don’t be fooled into thinking people are data-driven – they’re just fishing for data to support the decision they have already made,” Williams admitted to delegates.

“This means we have built our businesses around a type of decision maker that doesn’t exist, which is why you have those days when you feel like you’re banging your head against a brick wall.

“But if you can understand their biases and characteristics, you can predict what your client is likely to do. There’s a field called behavioural economics – the study of how people behave. This can be the equivalent of accounting standards for the soft skills we need to influence clients.”

Understanding client behaviours

According to Williams, there are three main reasons why clients aren’t taking the actions advised by their accountants.

The first reason Williams outlined was apathy. Clients, particularly time-strapped small and medium business (SMB) clients, will avoid doing tasks that appear difficult or need a great deal of effort.

For accountants to overcome this barrier, there are a number of steps they can take:
  • Make it easy, right down to details like the font they’ll read in emails and online. Additionally, don’t lump clients with chunks of text. Instead, make materials as exciting as possible by adding headlines, bullets and infographics.
  • Give clients a sense of momentum. If they can see they’ve already done most of the hard work, people are much likelier to complete a task.
  • Normalise the desired action by using phrases like “Most of my clients...” 
  • Give good news now. Knowing there will be a future benefit often isn’t enough to push clients to act – they need a short-term incentive to keep them moving forward.
  • Contextualise value. Perception of value is always relative, not absolute. If accountants haven’t provided anything to compare their fees to, for example, they’ve already lost the game.

The second barrier outlined by Williams was paralysis. In trying to present all the information, accountants can overwhelm clients and prevent them from making a decision.

While constraining the choices offered to clients might be the simplest solution, it may not always be the right one. Clearly differentiating options to illustrate the more attractive choice can also allow accountants to guide their client into making the best decision.

Related: See CPA Australia’s full WCOA 2018 coverage here

Finally, Williams discussed client anxiety, the barrier that most often goes undiscussed. Although clients are unlikely to admit they’re afraid of making the wrong decision, humans are naturally more motivated to avoid loss than seek gain.

Accountants can overcome this barrier by providing assurance to clients, putting in place a solid “worst-case scenario” strategy to remove the need for fear.

Future-proofing the accounting role

The technical skills of anyone in a professional services role, like lawyers and accountants, are quickly going to be replaced by algorithms, Williams told WCOA delegates. The need to future-proof these professions is on the industry’s doorstep.

“Your role, really, is going to be about your influencing skills, and behavioural economics can be your version of the accounting standards to get you there,” Williams said.

“You’re going to be a much broader service for your clients, because that’s what they’re so desperate for. And that will make them very happy.”

Read next: Can behavioural economics really change habits?


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