Client understanding gaps cost accounting firms revenue, HLB finds

Accounting and advisory firms are systematically leaking revenue because they fail to properly understand their clients, according to a new report by HLB International and customer experience specialist McorpCX. The study, titled "Stopping Revenue Leakage", found that while professional services firms focus heavily on delivering what they consider high-quality work, they routinely neglect the structured client listening required to protect and grow their income.

The research combines McorpCX's XOS Pulse maturity data with interviews from leaders across HLB's global network, benchmarking companies on a zero to 100 scale. Professional services firms scored an average of 57.9 for overall customer experience capabilities, notably trailing the global cross-sector average of 62.5.

Their performance was particularly weak in areas tied directly to commercial intelligence, such as experience mapping, unifying client data, insight generation, and segmentation. In the specific category of client understanding, professional services companies recorded an average score of just 50.6, indicating substantial room for improvement.

For investors and firm executives, this operational blind spot translates directly into lost margins. The report identifies four primary mechanisms of revenue leakage: clients shifting advisory work to competitors, rising difficulty in justifying premium fees, untapped cross-selling opportunities within existing accounts, and the commoditization that occurs when good work is nonetheless viewed as interchangeable.

The root cause is a fundamental misalignment between how firms collect feedback and how they use it. "Most firms have some way of tracking client satisfaction, but far fewer have disciplined systems in place to understand whether the experience is actually contributing to retention, referrals, pricing confidence and additional work," said Lesley Hornung, chief marketing officer at HLB.

Moving beyond basic satisfaction tracking is essential to plug these financial gaps. "Client listening is not about collecting better satisfaction scores. It is about understanding what clients value, where revenue is at risk and where the next opportunity may be hiding," said Michael Hinshaw, president of McorpCX.

Firms that successfully systematize client insight are better positioned to defend their pricing power and differentiate their services in a crowded market. Those that do not risk remaining vulnerable to competitor poaching and margin erosion.