Hero Finding
78% of clients would stay through a 5% annual fee increase. At 10%, only 41% would stay, and roughly a quarter become likely to leave.
The price ladder measured willingness to continue at a 5% and a 10% annual fee increase on the same respondents. At 5%, tolerance held almost completely: 78% would continue and only 2% would leave. At 10%, the picture changed, with 36% moving to might or might not and 23% saying they would not continue. The elasticity break sits between those two points, which locates the safe price-escalation ceiling close to 5% per year.
Willingness to continue at a 5% vs a 10% annual fee increase · phase-one cross-section · n=53
Key Findings
What the diligence surfaced.
Six signals grounded the buyer's read of revenue quality, pricing headroom, and concentration risk.
Pricing power is real but bounded, and the break sits between 5% and 10%.
At a 5% annual fee increase, 78% of clients would keep their firm and only 2% would leave. At 10%, just 41% would stay, 36% move to might or might not, and 23% become likely to leave. Annual increases around 5% are well absorbed while double-digit increases put a meaningful share of revenue at risk, measured on the phase-one cross-section of 53.
The base is loyal and rarely shops.
69% of finance decision-makers had never seriously considered switching their primary accounting firm, and formal reassessment runs on a slow cadence: 55% reassess only every two to three years and 4% had never reassessed at all. Among the target's own clients, satisfaction ran 94% at 8 or above out of 10 with none below 7, on the second-phase base of 18.
Existing accounts are growing, with expansion skewed to public companies.
75% of clients expect to increase spend with their firm over the next twelve months, 21% expect it to hold, and essentially none expect to cut. Among the target's own clients, 55% expect to raise spend by 10 to 20%. Public companies were significantly more likely than private ones to project double-digit spend growth, which locates where account expansion is most reliable.
Key-person dependency is the sharpest risk, concentrated in the target's own base.
42% of all clients would be at least somewhat likely to move their business if their lead partner left the firm. Inside the target's own client base the figure rises to 67%, a separation that tested significant against the comparison group. A large share of the acquired revenue is anchored to individual partner relationships rather than to the institution.
Retention is service-led; lower fees rank last among the levers.
Asked what would most improve their likelihood of staying long term, clients put higher-quality deliverables (72%) and improved responsiveness (65%) at the top, followed by more proactive advice and broader service offerings (49% each). Lower fees ranked last at 25%. The path to holding and expanding this base runs through service quality, proactivity, and breadth rather than price concessions.
Automation is already assumed, an accepted route to margin.
64% of clients believe their firm already uses automation in delivering services. For a buyer planning efficiency gains, that perception matters: automation in delivery reads as the category norm rather than a downgrade, which leaves room for margin improvement that clients will not read as a service cut.
They've been proactive, and the prices have been very reasonable and steady over the time that we've engaged with them. Of course, if they increased their prices by 10 or 20%, we'd probably look elsewhere.
Founder · Technology business · client of the acquisition target
Study Design
N=71finance decision-makers
33 target clients + 38 competitor clients
2 provincial markets
Quant + qual in one instrument
Fieldwork ran in two phases, late August to mid-October 2025. The initial 53-respondent cross-section across all four firm tiers closed in about six days, with an interim readout after the first phase; a targeted October phase added 18 interviews to deepen the acquisition target's own client base. A hard-screened funnel enforced role authority, region, firm relationship, and tier quota, with over-quota termination protecting the comparative design, and the tight funnel screened out the large majority of starts before an interview counted toward the base. The recruit was reconciled across six specialist B2B panels and expert networks. One instrument carried the scaled and matrix measures, a ranked selection-criteria exercise, the two-point price ladder, and adaptive open-ended probing on selection, strengths, pain points, and switching triggers.
Sample by segment
Mix
What the guide covered
- Evaluation and selection process for the primary firm, with a ranked selection-criteria exercise
- Satisfaction, value for money, and relationship importance on scaled and matrix measures
- Price-sensitivity ladder: willingness to stay at a 5% and a 10% annual fee increase
- Switching consideration, reassessment cadence, and the circumstances that prompt a change
- Key-person dependency: lead partner, second partner, and likelihood of following a departure
- Twelve-month spend outlook and appetite for additional services
- Perceived use of automation in service delivery
Who qualified
- Finance decision-makers: founders, CEOs, CFOs, controllers, and finance directors
- Primary, committee, or key-influencer authority over accounting-firm selection
- Organizations operating in the target's regional footprint across two provincial markets
- Enforced quotas across the target's clients and three competitor tiers
- Sourced through six specialist B2B panels and expert networks
Crosstab · Client Type
Key-person dependency, the target's own clients against the full sample.
Likelihood of moving business if the lead partner departed, cut by client type. The target's own base runs 25 points above the market read on the net measure, a separation that tested significant. Highlighted row = the acquisition target's own clients.
| Very likely | Somewhat likely | At least somewhat likely | |
|---|---|---|---|
| All clients (n=71) | 4% | 38% | 42% |
| Target's own clients (n=33) | 3% | 64% | 67% |
Target vs comparison group tested significant · 25-point separation on the net measure · n=71 full sample · n=33 target clients
Voice of the Client
What finance decision-makers actually said.
Verbatim excerpts from the interview sample, selected to span the target's own clients and competitor-firm clients across roles, industries, and both field phases.
“The partner has been with us for a very long time and has a very thorough understanding of our business and all the past dealings we rely upon with changes in our management.”
“The most important aspect, which I observe, is retaining the people. If the people are changing, those are the side contacts we have with the firms, and that really impacts the business year on year.”
“They never provide any proactive strategic guidance unless we keep doing repetitive follow-ups. They do the compliance part, but they don't do the tax planning part.”
“We were exploring cost-optimization opportunities and evaluating whether a smaller, more specialized firm might offer a more tailored approach for certain services.”
“Strong expertise in our industry, willingness to invest time in understanding our goals, and the ability to provide international tax support.”
Implications · what the evidence supports
Three readings from the diligence.
What the deal team took into underwriting and the post-close plan, grounded in the data.
The revenue base underwrites as durable.
69% of clients had never seriously considered switching, reassessment runs on a multi-year cadence, and 75% expect to increase spend over the next twelve months. Satisfaction inside the target's own base ran 94% at 8 or above out of 10. The recurring-revenue quality the deal turned on held up across the competitive frame.
The safe fee-escalation ceiling sits near 5% per year.
At a 5% annual increase, 78% of clients stay and 2% leave; at 10%, 41% stay and roughly a quarter become likely to leave. The value-creation plan the data supports underwrites annual increases around 5% and treats double-digit increases as a revenue-at-risk decision, an evidence-based input rather than an assumed elasticity.
Partner retention and succession are core post-close workstreams.
With 67% of the target's own clients at least somewhat likely to follow a departing lead partner, a large share of the acquired revenue is anchored to individuals. The retention plan the data supports leads with higher-quality deliverables (72%) and improved responsiveness (65%), where client demand concentrates, and treats fee concessions, ranked last at 25%, as the weakest lever.
Signals the data flagged
- 78% of clients hold through a 5% annual fee increase; only 2% would leave
- 69% have never seriously considered switching their primary firm
- 75% expect to increase spend over the next twelve months
- Higher-quality deliverables (72%) and responsiveness (65%) lead the retention levers
Risks the data surfaced
| 67% of the target's clients likely to follow a departing lead partner | High |
| Double-digit fee increases put roughly a quarter of the base at risk | High |
| 36% move to might or might not at a 10% increase | Med |
| Price ladder read at the phase-one base (n=53); second-phase satisfaction at n=18 | Low |