The 3 Marketing Strategies for Accountants
There are only three marketing strategies that any business, including accountants, can use. These are:
- Low cost- this is where you become the lowest priced supplier in the marketplace. Ryanair, Weatherspoons, SpecSavers etc. have all built very profitable companies using this strategy.
- High end- this is the opposite end of the spectrum where you are a top brand and supply something outstanding. In accountancy, this is PWC, Deloitte, KPMG and EY.
- Niche– this is where you supply a service or product that is tailored to meet the needs of a specific market. Your offering has important points of differentiation which appeal to your target market, so they are willing to pay a premium for it.
A key differentiation point is you understand your niche inside out, while “general” accountants do not have the same insight. If you are looking for other ways to differentiate then please read this article.
Let’s quickly go through these three options and look at their pros and cons.
You never want to be the low-cost supplier- there will always be someone who can undercut you and your clients will happily move to another supplier to save £2.50. These also the clients you don’t want. For some reason, people who pay the least, expect the most and they are very difficult to deal with.
The biggest issue is that once you take on a client who is demanding and wants to pay you below your usual rate, they tend to refer other people just like them. The outcome is you end up half-killing yourself to deliver while earning no money.
Growth is key but you want to grow with the right clients.
The low-cost strategy can work if you streamline your processes, maximise your use of technology and get the lowest qualified person (and hence paid) person to do the job. This strategy requires investment and you need to invest heavily in marketing as you may need to service double or more the number of clients to make the same profit as if you adopted a niche strategy.
The second strategy- high end differentiation– is phenomenally expensive and it is virtually impossible for smaller accountancy practices to achieve this status. They can be highly specialised and a become a boutique practice which makes considerable profit. This comes under startegy number 3- niche.
A niche strategy allows you to charge high rates and deal with the individuals and companies that you want to work with. Any accountancy practice can successfully adopt this strategy.
You need to find a target market or markets that you can profitably serve. By offering something different to the low-cost suppliers that appeals strongly to your chosen target market, then you can avoid the low-cost trap and charge a premium.
A well-defined niche also reduces the costs of your marketing and you can build your business around serving this group. Your niche is the group that you invest your time and marketing spend in attracting. Few accountants are using this strategy so the way is wide open for you to own your profitable niche(s).
This is usually because the concept is misunderstood. By having a niche, or niches, you choose to invest your money and time in attracting them. This does not mean that you won’t work with clients outside of your niche. It just means that you spend all your marketing investment and time in attracting them. This makes your marketing much more effective.
Let me give you a two simple examples.
- You have a marketing spend of £10,000. On a per prospect basis, you can choose to spend £1 on attracting 10,000 random prospects, £10 on attracting 1,000 defined prospects or £100 on attracting 100 carefully defined, highly profitable prospective clients. The more you spend per prospect, the more successful you will be.
- You are writing a brochure. Do you think this would work better if you wrote it for a broad audience using randomly selected examples and testimonials and listed all the potential benefits or would it work better if you focused on explaining the specific benefits that apply to your target market and used testimonials from clients like them.
There is another important reason to define your ideal client/ niche.
Trust is vital, especially in the professional services, and it is much easier to build trust quickly by focusing on your ideal client as you:
- Understand your them and their challenges- every industry has its own challenges and different size businesses within the same industry typically have different issues
- Speak their language– every industry has its own vocabulary and you can learn and use this
- Frequently being seen– the more your ideal clients see you, the more they trust you. So, you can focus on attending their events, exhibitions, appearing in their publications, LinkedIn groups etc.
There is a lot more to this but as you can see it is much easier if you have a niche.
You can find out how to define your ideal client or niche here. (link to define your ideal client article).
It is worth investing some time in working out who you want to attract. If you would like some support with this, then please contact Nikolai today who will be happy to help.