Accounting Marketing: Essential Guide for Small Firms
Marketing is a process that all businesses embark upon to stimulate demand of goods and services. In fact, it typically targets a segment of the market (say small businesses or individual tax payers) with an expectation on pricing (premium priced or value oriented) along with some expectations of service quality. When marketing an accounting firm, most accountants target prospective clients geographically (say 10-20 miles from their office location) and accept both small businesses and individual tax payers. As the accounting firm becomes more established and closer to capacity, the accounting owner typically becomes more selective about the types of engagements they are willing to accept into their practice.
Branding an Accounting Firm
Within the United States, many accounting firms are branded by the designation (type) of accounting firm within their state. Typically, there are CPA Firms, Enrolled Agents, and Bookkeeping firms and they vary slightly by state.
While all CPA’s are accountants, not all accountants are CPA’s. And to confuse this even further, not all CPA’s are skilled at tax compliance.
An accounting firm can do nearly everything a CPA firm can do with one exception – audits and assurance services. However, if you are looking to focus on the most common services accounting firms provide, like bookkeeping and tax preparation, then you may consider entering this industry without being a licensed CPA by your state. And while there are certain state-by-state exceptions about what can and cannot be undertaken by a CPA, there are fewer requirements for starting an accounting firm.
CPA’s are licensed on a state by state basis and certification standards are rigorous. State laws vary widely on whether a non-CPA can use the title “accountant.” In most states, a non-CPA can refer to themselves as an accountant.
Enrolled Agents are tax advisors and are authorized to practice before the IRS on tax issues.
Avoid Commoditized Pricing
Pricing within the accounting industry has been shifting away from hourly billing towards fixed fee billing (often referred to value billing). Regardless of how a firm ultimately approaches pricing, the longer term concern is avoiding “commoditized” pricing as technology starts to provide more of the less technical aspects within the industry (e.g., payroll, bookkeeping). With the evolution of artificial intelligence (AI), even auditing and tax preparation are becoming automated. Simply said, if you can teach a robot how to drive a car and make instant decisions, you can automate audit and tax preparation.
To combat “commoditized” pricing, many accounting firms have evolved towards focusing on industry verticals and specialty type service levels to provide a higher level of expertise and consulting. This segmented approach has worked effectively in other professional service industries (medical, dental, legal, etc.).
While being generalized (we service all types of clients) may seem like a good way to “cast a wide net” and reach more prospects, it is not a wise approach if you want to be seen as an authority in your market and avoid competing on price. Most newer accounting practices struggle with this concept because it is counter intuitive.
Expanding Your Accounting Firm's Market
Most accounting firms market and service clients within a certain geographic radius from their office location(s). This phenomenon is analogous to other professional service businesses like medical, dental, architecture, and legal. It stems from the prospects’ mind-set that if they have a problem, they think an in-person meeting will be necessary to address the issue. With technology today, this is rapidly changing.
To expand the geographic radius, many accounting firms are developing a specialty (boutique service) to attract prospects from a broader geography. This is another reason to segment your marketing approach and focus on a smaller segment of the market.
Segments of Marketing for Accountants
Within the accounting industry, the two different segments of marketing are business-to-business (B2B) and business-to-consumer (B2C). Most accounting firms deploy business-to-business marketing because the annual fee paid by small businesses is dramatically higher and the demand is less seasonal. However, it really depends upon the type of accounting firm and what services are being marketed.
Business-to-Business (B2B) Marketing
Business-to-Business marketing is a marketing effort geared towards business owners and organizations, not the general public. The tactics for B2B marketing are laser focused towards your target audience and avoiding the general public. As a result, you will seldom see accounting firms using television, radio, newspaper and yellow page advertising.
For example, payroll and small business accounting services will target small business owners and avoid 90-95% of the general public.
Business-to-Consumer (B2C) Marketing
Business-to-Consumer is a marketing effort geared towards all consumers in your local marketing area. The tactics for B2C marketing are geography based and/or timing based. Examples of this would be tax controversy and tax preparation services.
Regardless of the caveats previously mentioned in this article, here are the types of marketing that most small accounting firms deploy.
A well-constructed website is the most cost effective accounting marketing tool for lead generation, branding and will become the hub of your marketing efforts. By well-constructed, the accounting website content needs to be informative and persuasive, search engine optimized, and attractive content is served alongside relevant offers designed to convert website visitors into qualified leads.
Search engine optimization (SEO) is an ongoing process designed to elevate your website within the major search engines and maximize website traffic. SEO is not a one-time effort, but an ongoing strategy to create quality content that is easy to locate, informative and persuasive. When done right, you will generate high-quality leads from your website with motivated prospects.
Reputation Management and Online Reviews
Reputation management is an ongoing process designed to favorably position your firm within your local marketing area and transition your firm name into a trusted brand that is highly respected. As our world has transitioned towards the internet, online reviews with Google, Yelp and other business directories (Expertise, Top 3, Clutch) have started to play a larger role.
Below are several aspects that contribute to your firm’s reputation:
- Website presence within Google, Bing and Yahoo – Top placement within the main search engines favorably impacts your firm’s reputation because your firm is being recommended by Google, Bing or Yahoo.
- Quantity of reviews and average star rating – Obtaining plenty of reviews on Google and Yelp clearly influences your firm reputation locally.
- Awards from business directories (Expertise, Clutch, Top 3) – Securing recognition as one of the best accounting firms in town validates your reputation and motivates prospects to consider your firm services over competitors.
- Social media following, likes and online commentary also contribute to your firm reputation.
- News article placements and independent third-party comments also favorably support your reputation.
Content marketing is a marketing technique of creating and distributing valuable and relevant content to attract a clearly defined audience. While this marketing tactic favors larger CPA Firms, it is still an effective tactic used by smaller accounting firms who have a well-defined strategy of who they want as clients. The type of content varies considerably from trade journals to podcasts to video to books published to white papers.
Social Media Marketing
Social media marketing for accountants has surged in popularity for small accounting firms because it is relatively inexpensive. Social marketing leverages various forms of media (Facebook, LinkedIn, Twitter, blogs, etc.) to inexpensively push out your message. Social marketing is more effective if it supports a targeted message towards a small segment of the market and supports a content marketing strategy or upcoming speaking engagement.
Niche Markets for Accountants
Firms that develop an accounting niche are able to grow at faster rates and effectively avoid price competition. Specialization makes your marketing more effective and provides scalability that most accounting firms strive for. Eventually, specialization can become a competitive advantage because it differentiates your firm from generalist accounting firms.
Outbound marketing has been declining in popularity and effectiveness for many years now, but still used by small accounting firms.
Outbound marketing is when a company initiates a conversation and uses more of a traditional sales process to close the lead. Outbound marketing is often referred as interruptive and pushes the message onto the prospect, whether the prospect is interested or not. Examples of outbound marketing range include cold call telemarketing, email marketing, door knocking, billboards, newspaper and radio advertising.
Outbound marketing promotes brand awareness and when done effectively, can yield immediate results. However, outbound marketing is less targeted and typically reaches a prospect who is not actively ready to buy, which results in more of a sales transaction which many accountants dislike.
Overall, outbound marketing is all about sending a message out broadly (e.g., shouting your firm from the rooftops) and hoping to close a small number of leads generated using traditional selling techniques.
Trade Show Marketing
Trade show marketing for accounting firms is not commonly used by accountants. Despite this, it can be effective if the trade show is highly targeted and compliments a specialty that the firm is known for or wants to develop.
Trade shows are a great way to get a high concentration of potential clients all in one place at a time. One major advantage of a trade show is they allow businesses to come together around a common theme (industry, cause, emerging trend).
One tactic that is effective at a trade show is having a speaking role. Other secondary benefits are networking with peer vendors, hospitality events, and meeting with existing clients of yours.
The challenge with trade shows is that they are time consuming, expensive and generate leads that require follow up to convert.
Note: When in-person trade shows are not available, virtual events are a viable option.
Speaking engagements are one of the most powerful lead generating tactics for subject matter experts. The attendees are a captive audience and speaking positions you as an expert on the topic. The attendees may be your direct target audience or referral source.
Note: When in-person speaking engagements are not available, virtual events are a viable option.
Common Reasons Why Accounting Marketing Fails
Unfortunately, most accounting firms struggle with marketing for a wide variety of reasons. To avoid the errors that most accountants make, here are the top reasons why accountants struggle with marketing.
1. Target Audience Is Too Broad – Trying to be a successful “jack of all trades” and accepting every type of client that knocks on your door is a terrible recipe. In other words, trying to meet the needs of every industry and processing every client differently is the worst way to operate an accounting practice. Or said another way, most accounting firms struggle to say no to prospective clients.
To avoid this mistake, your accounting firm should have a clear list of firm services and types of businesses (e.g., non-profits, banks, manufacturing, etc.) that don’t meet your firm goals. And when these type of prospects knock on your door, just say no…
2. Wrong Marketing Tactics Are Deployed – While many accountants understand that cold call telemarketing doesn’t work like it used to and hate when this type of marketing is used on them, they are persuaded to try it again for lead generation and then hire a sales professional to close the leads.
One of the misconceptions that many accountants have about marketing is that it should generate new business without any personal effort on their part. Unfortunately, it takes an accountant to properly price and effectively close a new prospect. At the end of the day, the prospective business owner wants the assurance that your accounting firm can handle the task at hand and quickly answer a few questions that instill confidence. These Q&A’s can’t be adequately answered by a sales professional.
3. Poor Execution of Marketing – While accountants can be taught how marketing should be done, they are often sucked into the back office aspects of getting work out the door and answering existing client’s questions.
Another reason for poor execution is they expect immediate results. In other words, they follow the plan for 2-3 weeks and expect quick results. Especially after spending some money on marketing.
In reality, marketing works on consistent messaging that is delivered over and over again to the exact same audience like chinese water torture.
4. Lack of Follow Up – Most accountants expect a prospect will make a decision after one correspondence or meeting. Unfortunately, this is aspirational. Many prospects need 3-4 follow up touches to convert them into a firm client.
5. No Subject Matter Expertise – Many successful business owners are looking for an accountant that is not just competent, but one that will give them a leg up on their competition. In other words, they are looking for someone that will immediately add value to their business by providing some extra level of expertise and provide a competitive advantage.
Simply said, the business owner is looking to surround their business with vendors that understand their industry and provide value added services so they can make better informed decisions and improve their level of success.
6. Limited Differentiation – True differentiation within the professional service industry is very hard to create. In other words, most buyers of accounting services have very limited ability to determine who is best for their business. And if you fail to differentiate your accounting practice from the local competitors, prospects will default to price and image as the criterion to select their accountant.