Most small business owners position their business to meet everyone’s needs in an effort to capture more business. Their rationale is that the broader I position my services, the bigger the business I will develop.
The reality is just the opposite. The truth is when you try to market to everyone you end up marketing to no one. By positioning your services to everyone, you end up competing against every firm in the area that claims to do what you do. When this happens, price becomes a larger factor because you have not effectively differentiated your services.
Over the past 10 years, niche marketing has become bigger and bigger across all industries. With a niche service or industry in your accounting practice, it allows you to leverage your expertise in that one area to stand out from your competition. This differentiation not only allows you to stand out, but it also minimizes competition and allows you to realize higher fees.
When you become known for a particular niche, the following things happen:
Your marketing efforts become more focused: When you establish a niche, the pool of people you’re targeting becoming smaller. This means it’s going to be a lot easier to identify who your potential clients are and allows you to be more targeted with your marketing.
You become superior at meeting the needs of this niche: The more you work in a certain niche, the easier it’ll be for you. You’ll become very well-versed in helping this particular kind of client which will simplify your job.
Your conversion ratio increases: When a potential client sees you excel at providing services for their industry or needs, it’ll become increasingly easy to close potential clients.
Your referrals increase: Since a niche is going to allow you to be super clear about what you do and who you work with, it’ll make it even easier for current clients to refer clients to you. As you continue to build up trust in your niche and got more visibility and credibility, referrals will be more frequent.
You can command higher pricing: Less competition means you don’t have to compete on price. But, a niche also means you’re providing a more specialized service that’s more custom and sought after, allowing you command higher pricing.
To give you some analogies, look at physicians. The specialists have a much narrower target audience than general practitioners (GPs). The GPs have long-term relationships with patients and refer business to specialists. However, the specialists make much more money than GPs.
The same concept applies to accounting firms. If you continue to be all things to all people and take whatever new business comes in over the transom, then it will be more challenging to process each client, your costs to service each client will be higher and you will be competing on price more often. Rather than being just a generalist, take a page out of Henry Ford’s book and become better at servicing a segment of the market. And as Henry used to say, “any customer can have a car painted any color that he wants so long as it is black.”
In working with accounting firms around the country and encouraging them to develop niches, we had the opportunity to encourage several accounting firms to develop a niche which attracts clients from a broader geographic area by leveraging the power of the internet in conjunction with other forms of marketing. Below are a few examples of niche accounting services that are helping to attract a specific audience:
Accounting firm for Dentists
Construction and Real Estate Accounting
Accounting firm for Churches
Outsourced CFO Services
If your accounting practice is spread too thin and you’re tired of competing on price, then start developing a niche for your practice. Research your market to determine which industry might be underserved and develop a plan to capture them. If you’re not comfortable doing this yourself, get assistance from a coach or peer that has made this transition.
Granted, you’ll still have generalist type clients to pay the bills. But going forward, your direction will be much more focused, and you will become superior in your niche.
Hugh Duffy is the Co-Founder and Chief Marketing Officer of Build Your Firm, a website development and marketing company for accounting firms. With more than 30 years of marketing experience, he has been coaching accountants on how to improve their marketing and make more money from their accounting practice since 2003. Hugh takes great pride in the impact his coaching has on the practices and lives of his clients.