Are your accounting firm’s clients cheating on you?
Roughly 1 in 3 clients uses multiple accounting firms to meet all of their needs, according to a recent survey by consulting firm L. Harris Partners. If you believe that percentage is smaller for your firm, you might be right, or you might be naïve. Another survey by the firm found that CPA firm partners believed the percentage was much lower –only 1 in 12 clients — so there seems to be a disparity between what partners believe and what clients are doing.
Of course, there’s nothing wrong with clients using multiple firms in order to access services that your practice doesn’t provide. But most firms told L. Harris Partners they expect selling more services to existing clients will be a key growth strategy in 2014, so it’s important to make sure clients are aware of your ability to meet their needs so that you retain your best clients and can provide those services.
One way to meet clients’ needs effectively is to focus on a fairly narrow list of industries in which you’d like to specialize, said Lauren Prosser, director of Sageworks’ ProfitCents Professional Services. It may seem counterintuitive, but by homing in on the industries that provide you the most or the best clients, you will be more focused on offering these clients all of the services they need.
“By refining who it is that you’re serving, your accounting firm can grow revenue and capture a larger market share within the area where your firm is a good fit,” Prosser said.
Some firms are intimidated by the idea of developing industry niches because they believe it will be a massive undertaking to shift their focus. “But it doesn’t have to be all or nothing,” Prosser said. “You can become more of an expert in certain industries and refine your practice to grow in targeted service areas.”
The biggest step you can take toward developing a tighter focus is to facilitate more purposeful communication — both with clients about their needs and also with staff about which service areas and industries the firm is best suited to emphasize. “You want to identify industries that are the best fit and where your firm might fit well with the best opportunities,” Prosser said. For example, if your firm already has multiple manufacturing clients, and one of your newer staff members has a particular interest in research and development tax credit studies, this might be a niche worth exploring.
Once your firm has identified some industries of interest and some service areas that are great fits, the firm can make subtle shifts in the practice to emphasize providing these services to as many companies in that industry as possible.
For more information on identifying industries that are ripe for your firm’s focus, download a whitepaper on how to find your industry niche or listen to a free, on-demand webinar, “Growth through refinement: Expanding your reach by narrowing your accounting firm’s focus.”
In the process of developing some specialization, your firm can find new ways to sell more services to your existing clients. After all, the last thing you want is for a client who is using multiple firms to decide they can get more value-added services by narrowing their own focus – on another accounting firm.