In July 2011, CPA Trendlines summarized recent research (http://cpatrendlines.com/2011/07/10/marketing-efforts-surge-as-firms-battle-for-new-clients/) demonstrating that 66% of accountants “say their firms have been increasing their marketing and business development activities in the last 12 months.” Even more impressive, “85% say they will be continuing to step up marketing in the coming 12 months.” According to this report, the priorities are:
- Adding new clients
- Client retention
- Lead generation
- Niche or specialty services
These firms plan to achieve the needed growth by stepping up five marketing efforts:
- Networking with prospects and referral sources
- Upgrading the firm’s website
- Producing e-newsletters
- Using social media
- Establishing thought leadership
These are commendable goals and widely used marketing venues. The weakness in these goals and marketing efforts is that they appear to have two critical inherent flaws: failure first clearly to understand client needs, desires and pains and lack of strategic planning and implementation of marketing efforts.
A number of studies in recent years have demonstrated some key insights about the client knowledge of most CPA firms. They found that most firms do not actually know why clients hired or fired them because they do not ask. What is more, the reason most firms believe things about their clients that are false is that they have never analyzed or tested their beliefs.
These findings match my own experience in working with CPA firms. Many firms are convinced they know their clients and their needs. Many of their clients, however, are convinced of the opposite. This happens when CPA firms begin to believe that providing specific (or general) accounting services to a clients automatically means they know the client and his/her needs.
Another study, summarized August 10, 2011 at cpatrendlines.com confirms the chasm between what clients want and need from their CPAs and what accounting firms think they know about the client. Particularly today, after/amid the recession, the chasm has grown wider. This report (http://cpatrendlines.com/2011/08/10/new-survey-results-tough-times-reshape-client-expectations/) indicates significant changes in the criteria upon which clients select a CPA firm. The considerations that have increased in importance (most important to least) are:
- “specific understanding of my business”
- “level of service and attentiveness”
- “work with the best people in the firm”
- “specific understanding of my industry”
- “reputation of the firm”
- “problem-solving ability”
- “price, fees, costs, “affordability”
Perhaps most interesting, the three considerations that declined in importance are
- Quality and accuracy of work
- Proactive advice and consultation
- Personal chemistry
The report said specifically, “The number of client companies citing a “specific understanding of my business” as “important” criteria in “choosing a new CPA firm” vaulted 26% from 2009 to 55% of respondents in 2011. More than ever, clients expect their CPAs to be experts and specialists. The need for “understanding” is growing faster than any other measure.” Yet most firms focus their marketing on the three criteria of declining importance to the client!
So, how do you market to clients who make choices based on these criteria? How do you tell prospective clients and referral sources/centers of influence you are the thought leader/expert to select because you have the specialized knowledge and skills to meet their needs, as well as the knowledge of their industry to understand their business and solve their problems? The answer is simple: You market your suitability to these clients by building and then marketing a micro-niche.
Defining and building a micro-niche is a process requiring a CPA firm to take the time to get to know their clients and the clients’ needs, desires and pain points. It also requires the experience and knowledge required to claim a unique level of expertise in a specific area of your usual work. The process also requires that the firm spend the time developing an integrated marketing strategy that will directly address precisely those considerations that showed an increase in importance:
- Intimate knowledge of the client’s business
- Providing a higher level of service and attentiveness
- The opportunity to work with the best people in the firm
- Specific understanding of the client’s industry
- Reputation of the firm
- Problem-solving ability
- Price, fees, costs, “affordability”
In fact, building a micro-niche business within your firm justifies the kind of premium pricing that improves your profitability. It is axiomatic that people are happy to pay more when they know they are receiving everything they want and expect. Building a micro-niche demands some adjustment in thinking about clients’ needs, time, research, listening to clients, and sharpening of knowledge and skills. The accounting firms willing to expend the effort and build one or more micro-niche businesses will be the real winners in today’s competitive environment.