Rethinking your accounting firm's value proposition
Differentiating your accounting firm from others cannot be achieved simply by delivering an outstanding tax return. Nor will this help you make any significant gains in revenue or achieve practice excellence. The demands of clients have moved beyond compliance to a rapidly widening range of business advisory services, so your value proposition must keep up with these changing times.
Your value proposition tells your prospective clients why they should do business with you rather than another accounting firm, and makes the benefits of your services crystal clear from the outset.
Take HPC CPA’s value proposition for example: “We are the technology-driven quarterback for global small businesses.”
There are key elements that make this proposition strong:
From the outset, it tells you that technology plays an important part in the way they work, so you can expect progressive accountants working with SaaS technology.
“Global small businesses” clearly states who they will be targeting and the type of problems a firm like HPC could help solve: a company with cross-border transactions, teams spread across the globe and a need to grow in different geographies.
Finally, the “quarterback” hints at the type of services they provide, coordinating every player to win the global game—from back office simplification, to handling of the inherent tax complexity of operating in multiple countries, all the way to services that international businesses would not know how to execute in the US (think business registrations, insurance and payroll).
Does your current value proposition help you stand out from other accounting firms? Why would someone choose you over another practice? In order to define a compelling value proposition, you’ll need to understand who is your ideal client, and what are the key services that they will value most.
Define your ideal client
As an accountant, you enjoy an extremely low client attrition rate compared to other professional service industries. The question is, will your current client base result in your top line increasing by much at all, let alone 100%? If the answer is no, you need to be smarter about the clients you go after and the value that you deliver them. It’s all about quality over quantity.
Think about who your practice’s ideal client is, or would be in a perfect world. You want them to be highly profitable, likely to engage with your firm long term, and have the potential to bring you more business—either by referring you to other clients just like them, or through opportunities to upsell services to them.
Beyond these revenue-creating characteristics, if you value your sanity you want clients who are enjoyable to deal with, and who create interesting work. You might like solving certain types of problems for an SME, or perhaps you get a buzz from helping nonprofit businesses. Maybe the clients you enjoy working with the most all come from one specific vertical—like restaurants and cafes. Depending on your own passions, and the culture and strengths of your firm, work out who you’re best suited to.
You cannot build an efficient firm without focusing on a niche client. It helps us focus on things like marketing and trade shows, while also allowing us to create scalable systems. Before we narrowed our focus we were constantly having to reinvent the wheel and learning about new businesses.
Going back to the HPC CPA example, beyond talking to global small businesses, Bruce Phillips and his team identified three key verticals they wanted to specialize in:
professional services
e-commerce and retail
SaaS and technology
The biggest advantage of having targeted verticals is that it helps you focus, specialize, and be more efficient. Your clients have a big effect on the happiness of your staff, so to assist in this process ask your team to think about who they prefer working with. Showing you value your team’s input will do wonders for your company culture. Any bad clients you or your team identify should be dealt with right away (even if it means creating an exit plan for them). This is one of the hardest things you’ll have to do, but keep in mind that servicing a bad client can take the focus from the good ones.
For the first several years, we provided accounting services to any business that came to us. Over time we began to realize the power of focusing on a niche market. You can quickly go from constantly chasing new prospects to people knocking at your door as you become the expert in a particular area of focus.
Once you’ve defined your ideal client, take the time to understand their biggest pain points, and how your firm could address them. For bigger businesses, remote worker management or international expansion could be the key to success; for startups, system and business advisory could be very enticing; for retailers and hospitality, understanding specific tax implications of certain goods and services, and staff payroll could be a major deal-breaker. Identify what makes them tick, and then move onto designing the services that will tackle those problems.
Design the services that will suit your perfect client
Once you’ve defined your ideal clients and know them inside-out, you need to review the current services you offer, and compare them to the services you need to offer. There is no shortage of options for the public to choose from when deciding on an accountant, so their choice is going to be made based on the perceived quality of service, expertise in their area, or on price. And no, reducing your fees isn’t a viable strategy for a firm with ambitious growth goals!
By identifying a specific niche, you can tailor the services to meet their expectations and position yourself as an accountant expert in their field. Servicing variations of the same client will also enable you to standardize your internal processes and deliverables, which will drastically improve your efficiency. Selling ready-made products to the exact demographic that they’re intended for will save your firm time, energy and money, and make you much better at your job.
If you’re struggling to determine what services your niche wants, perform a client discovery process. The goal of running a discovery process is to assist the client in discovering what they really want from their accountant, and shape their perception and your services to reach their goals.
Ask them what they need, find out their pain points and problems, and think about what you can do to help them overcome these and grow. Your target clients will have their own unique needs, so you must involve yourself completely in the chosen vertical and be an expert in their field. Referring back to the example of HPC CPA—they identified that beyond their three key verticals, their core target of “global small businesses” have specific unique needs. Their needs dictate the type of services they provide today, and the services they will provide in the future.
Learn how your clients think, how they speak, and what they want, and use this knowledge to shape the services you offer. You’ll be able to train your team in relevant areas, and they will be able to apply their learnings across the entire client base rather than a select fraction.
If you can prove you have designed exactly what they need and have the skill set to provide these services, you will set yourself apart from all of your competitors. What’s more, you will find yourself in a position to communicate just to the segment your services are intended for.