Got a Niche? Here's Why You Should
Many accountants started their own firms ready to help local business owners and individual tax payers, but perhaps haven't thought about how to narrow their approach so that they can develop an area of concentration and position themselves as an expert at something which generates higher fees and higher profit margins.
That is why the first time I sit down to meet with an accounting client, I ask them about their background and what types of clients they enjoy working with: Beyond accounting and tax preparation, what unique services do you provide? What industries do you have experience with? Is there a pattern to the types of clients that work well with your staff (and vice versa)?
For San Diego CPA Mark Orlando, this conversation came easily. Mark has been in the medical business since he was a kid. His parents owned an ambulance company where he did everything from driving the ambulance, serving as an EMT and billing the insurance companies to handling the company balance sheet as the controller. When he began his CPA firm, finding a niche to offer his services was a no brainer. You guessed it - the medical profession.
If you weren't born into a niche business like Mark was, you might have a hard time determining where to focus your efforts and what niche to create. Making the decision could occur through fate; a client in a specific industry may just provide you with the learning opportunity you need to begin a niche. Still, it doesn't happen this way for everyone. Another way to is to look at the type of businesses in your local market to see if there is a concentration. Most likely, you'll know this instinctively, such as technology in the Silicon Valley, defense contractors in Washington, D.C., entertainment in Los Angeles, or even hospitality in certain vacation areas.
Some examples of niches are listed below:
|Service Specific Niches||Industry Specific Niches|
The key is to differentiate your accounting practice from your competitors, so once you have a niche, your practice becomes the "go to" place for that type of service and word of mouth spreads. The starting point for developing a niche is developing a website that is dedicated to your niche set of services, which is totally separate from your regular accounting firm website.
Specialization Improves the Quality of Lead Generation
Mark began his business in November 2007. His initial tactic was to market to the general public to build his clientele. He started MW Orlando CPA, Inc., a firm-based website (now one of three) and used Google pay-per-click advertising to draw in general clientele. While pay-per-click advertising worked, this method was pricey and each client was totally random by industry, size and type of services needed.
In 2011, Mark started marketing to the medical industry directly by opening up a website focused on doctors, dentists and medical related businesses called cpa4doctors.com. "The doctors' website has started to bring in quality leads I wanted," said Mark. "When I get a lead from the website, I am more likely to close the deal than if the prospect had found me through any other means."
Now, 80 percent of Mark's new clients are from the medical industry. It is also becoming easier to process the medical clients and anticipate their questions. Eventually, most of his referrals will be concentrated in the medical industry as he acquires more doctors, dentists, chiropractors, physical therapists and nursing care businesses.
Mark's results are typical in my experience - Why? Because they can narrow their marketing efforts, differentiate themselves from their competition, become better at processing the same type of clients with repetition and they generate more referrals from their niche.
Using More than One Website to Market Expertise
One of the biggest objections I get regarding developing a niche is, "Isn't it a mistake to put all of my eggs in one basket?" or "I work with all types of small businesses and worry that developing a niche will alienate my current clients."
Both of these points have some validity which should go into your niche decision process. For example, we tend to avoid cyclical industries for niche development. Examples of this would be construction and real estate accounting. On the second point, we advocate that accountants do both, continue to be a local generalist while at the same time, develop an area of expertise which can evolve into a niche.
"In 2012, Mark Orlando started a third website to attract more business owners using QuickBooks called sandiegoqbadvisors.com, as he noticed less demand for traditional write-up services. While most of his medical clients maintain their accounting using QuickBooks, this website has no industry concentration and attracts all kinds of small business owners who are willing to use QuickBooks as a checkbook register. According to Mark, "many people search for 'QuickBooks training help,' which increases our flow of general leads that we can then convert to sales and cross sell our additional accounting services. From April until October where I used no other marketing tactics than our websites, I was getting an average of 12 new leads a month. Out of those 12, I closed between three to five each month."
Recently, Mark increased his marketing efforts and added a monthly eNewsletter to stay top of mind with prospects and communicate with existing clients. He is also doing some direct mail marketing, but most of it is focused towards his medical niche because he has become more selective about the types of clients he wants in his practice.
"Essentially, I am always tracking where my leads are coming from," said Mark. "When I do that, I will tailor my websites and other marketing efforts to improve the ROI on our marketing investment."
About the Author
Hugh Duffy is co-founder and chief marketing officer of Build Your Firm, an accounting marketing and niche website development firm for accountants.Hugh teaches a series of Accounting Marketing Workshops; has a LinkedIn Discussion Group called Modern Marketing Methods for Accountants; and provides outsourced marketing for CPA Firms. He can be reached at 888-999-9800 x151, or at [email protected].