78. Can I Save This $60k CFO Client?

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The reality is if you're a fractional CFO long enough, you're going to get a breakup, text message, email, or phone call. This completely sucks. But can these clients be salvaged? Today, I'm going to share with you exactly what went wrong with this client, what we're doing about it, and I'm going to share a bold move that I'm taking to try to win the client back. Let's dive in. This client works in a blue collar professional services industry with a ton of competition. The industry is very seasonal with extremely high revenues in the spring and summer. Summer followed by extremely low revenues in the winter. This particular client falls between three and four million dollars a year. This industry also has notoriously high labor costs and tight competition, which means that margins are thin, to say the least. Most businesses in this industry have meaningful debt service payments, which makes cash flows even tighter. This client has two big pain points that they've got to solve. He wants to pay himself another $5,000 a month because he has a baby on the way. And he wants to increase his savings account so he doesn't have to stress about making payroll for his team during the slow season this coming winter. Before we get into dissecting exactly what went wrong, I want to encourage you, anytime you have a client cancel, get curious, not defensive. It's so easy to get into this mindset where we just start writing off the client. We tell ourselves these stories that they just didn't get it, or they weren't willing to do the work, or they weren't willing to trust the process that we know that they have to follow in order to get their financial story turned around. None of these things will serve you well as a firm owner because these mindsets don't allow you to learn anything from what's going on. It sucks enough to lose a client unexpectedly. It sucks even more if there's not something that you can take away from the experience. Let's start off our analysis by reviewing exactly what it was the client said. He texted and it reads, this is a tough one for me, but I'm really struggling. And I have been since our initial chat. I have to free up $5,000 a month somehow. I love you guys, but I have to do what's right so my business doesn't flip upside down when it gets slow. Later this season, I'm truly getting scared. I lost $22,000 to a fraudulent charge and it almost decapitated us. I'm not sure what else to do. The first thing I did after Getting that text message was to dive right into the CFO report and evalu their cash flow forecasts and projections. As expected, things were really tight. But the client wasn't nearly on the edge of decapitation like he thought he was in the text message. But in order for the client to be able to pay himself an additional $5,000 a month, and certainly for the client to be able to put additional savings away to cover payroll during slow season, there was work that needed to be done next. I reviewed the last two CFO calls to see if I could figure out where things went wrong. Honestly, both of the calls were pretty solid. The financial analysis was sound. The fractional CFO identified some specific things that the client could do to improve profitability and cash flow. Everything was going great right up until the end of those CFO calls. That's where everything fell apart. When it comes to generating CFO reports for my clients, my firm has two non negotiables. The process has to be accurate and it has to be efficient. That's why my firm only trusts G Accon. At its core, G Accon is a data connector between accounting platforms like QuickBooks and Xero and Google Sheets. But G Accon is so much more than just the data connector. Right out of the box. You're going to get hundreds of templates for all the reports that CFOs and accountants need to run for their everyday workflows. Everything from balance sheets to P and LS to AR aging reports. Or you can use gicon like my firm does to create our custom CFO reports every single month. My favorite part about GCON is that you can set it up to automatically create all of these reports. That means every month I'm getting fresh reports with fresh data ready to deliver to my clients. And because gfcon is automated, that has completely eliminated the need for my team to download data from QuickBooks, upload it into Google Sheets and manually apply formulas. All of those things that take up a lot of time and are prone to errors. In fact, GFON has completely replaced all the other tools, services and workflows that we were using to generate CFO reports. Gfcon is literally our one stop shop for making all of our CFO reports automatically every single month. If you're ready to start saving time and reducing errors, then you need to check out G A Con right now. Be sure to use the link in the description below to save 30%. That means you can get started with GFCON for as little as $28 a month. Join my firm and over 10,000 other firms and try GFCON happened was the fractional CFO listed out the specific action items that everybody agreed needed to be taken. But where we fell short is we didn't connect those action items, those tasks, to the story about how they were going to help the client with those goals and those pain points they were experiencing. Specifically when we laid out what they needed to do, we didn't show them the financial story about how those specific things were going to better equip the client to pay himself an additional $5,000 a month and free up additional cash and profitability so that they could set sufficient money for the slow season so that he wouldn't have to stress about making payroll. When you don't tie the tasks and the action items to the client's specific goals and pain points and those things that are causing them stress, those things that keep them up at night, they don't see the CFO service as the answer to their problem. They just see it as an additional list of things that they've got to do in their business when they're already tired, they're already overworked, and they're already stressed out. It's so critically important to tie the tasks and action items directly to those goals and so that they understand what's in it for them if they follow your advice. So here we have a client that desperately needs to bring home an additional $5,000 a month. And because we haven't done a good job of explaining how our recommendations are going to help him accomplish that, he looks for other places to save money. It just so happens that our service is $5,000 a month. So we immediately became the low hanging fruit that was a no brainer for him to cut off of his P and L. This is obviously a bad position to find yourself in as a firm owner. So the question becomes, what are you going to do about it? The first thing that I did was call my team together and hop on a zoom call. I walked them through exactly what I had seen on the CFO call and they all agreed we had not done a great job of connecting those tactical action items that we were recommending the client take with their goals and showing them how those items would help them achieve their goals and overcome their pain points. This was also a great opportunity for me to go over the human action model again. Now, what's the human action model? Well, the human action model says that three conditions must exist in order to get a human to take action. The first condition is there has to be a discomfort with the status quo, They've got to feel uncomfortable with the current state of whatever it is that they're in in order for them to take action. The second condition that must exist is they have to see a clear vision of a better state. So the client has goals, they have pain points that they want to go away. You've got to show them what the future could look like if those things that are going on with the status quo didn't exist anymore. You've got to be able to paint them a very clear picture of what the future would look like. The third condition that has to exist is they've got to understand very clearly what the path is, those very specific tactical things that must be true to get them from the status quo to the better state. What we had done a poor job of was connecting that status quo, the discomfort of the status quo, with the better state. All we had really given them was the action items, the steps in the middle, without the two end caps. I walked through that human action model with my team and showed them how we need to do a better job of connecting all three of those pieces so that the client would clearly understand that what we're recommending is going to solve a real problem for them. Next, I scheduled a call with the client. Now, I know this is an uncomfortable conversation to have because the client is clearly not happy with how things are going, but you can't avoid having this conversation if you have any hopes of saving the relationship. What did we talk about on the call? Well, I started off by showing him that his business was actually healthy in a lot of ways. I did this by walking through his P and L, his balance sheet, and his statement of cash flows, and showing him some very specific metrics that indicated that his business was on the right track and that the situation wasn't as tragic as he thought it was. Second, I reiterated the goals and the pain points, points that he had expressed so many times that he was feeling. I showed him this time how the specific tactics that his CFO had recommended would help him achieve those goals. And I showed him the timeline that it would take to get there. You could literally see the light bulb going on in the client's head as I walked him through this, step by step, how everything worked together to get him where he needed to be. But I was left with this feeling at the end of the call that he wasn't quite ready to commit to continuing working with us. And so I decided to take a pretty bold, risky move instead of asking the client if he'd like to continue working with us. I instead went with my gut and called an audible at the last second. I offered him a free month of service. What I said was, hey, I don't feel like we did a really good job for you last month. And so what I'd like to do is just gift you a free month of service. I know you've got a lot of things going on. You're trying to work through the tactics and the things that we talked about. I know you're trying to figure out how to pay yourself an extra $5,000 a month. I would like to continue helping you on that journey. And since we didn't do a great job last month, I'd like to just gift you a month for free. Would that work for you? And then I just paused. I wanted to make sure that he understood that there were no strings attached or expectations to work with us beyond that month. I have no idea how this is going to play out, but I do know that it's worth taking the risk because we love working with this client, and I'm certain that we can help change the financial story of his business. What are my big takeaways and lessons learned from this experience? Well, number one is that I've got to do a better job of training my team to connect tactics to goals, connecting tactics to outcomes. I've got to reinforce the importance of the human action model and show them how they can apply it every single time they get on a CFO call. Number two, I've realized that we need a QA process. We've got to have a process internally where people on the team are reviewing their own CFO calls and where managers and supervisors are reviewing CFO calls for the people on their team. This is going to help us proactively identify when we're not doing a great job, not just on the tactics and goals, but on any aspect of the CFO call. So whether you're a solopreneur doing fractional CFO work by yourself or whether you've got a team, I also want to encourage you. Make sure that you're always connected the advice that you're giving to your clients directly to their goals. Make sure that you're doing it in a way that they clearly understand how what you're telling them is going to help them accomplish their goals. And I would also say implement a QA process. Implement something in your firm, whether it's just you or whether you have a team. Implement a QA process where you're proactively going through and listening to calls and identifying areas where you can level up. All right, my friends, I hope you found this episode helpful. If you did, it would mean the world to me if you would leave a five star review on Apple Podcasts, Google podcasts, Spotify, wherever you're listening to this episode. In the meantime, I can't wait to see you back right here next week. I'll see you then.