Save Costco for your house, not practice niches

Ok, I’ll admit I enjoy holding an executive membership at Costco.

There’s something about floor-to-ceiling pallets overstuffed with economy-sized items that somehow transforms me into Kim Kardashian at a Jimmy Choo sale. Then, when my American Express bill arrives at the end of each month, I always regret buying that extra laundry detergent that comes in a container the size of a Fiat or that package of 1,000 AA batteries.

But I have long admired the business model of Costco and its price-club competitors such as BJ’s and Sam’s Club, as they inevitably manage to get you to spend four times the amount you would normally on weekly shopping at your neighborhood supermarket.

I bring the subject of warehouse membership clubs as I prepare to host next week’s webinar on how to grow your firm through new practice niches. (For those interested it will be Tuesday September 24, from 2 pm to 3 pm EST. See our website for registration details.) Normally we don’t tout our own presentations, but just a few short years ago, many CPA firms began – unwisely in my humble opinion – to morph into their own versions of Costco – trying to be all things to all people, their websites often advertising up to 20 various client services.

If you were inclined to drill down somewhat deeper, I would be willing to bet that of 20 services there was a partner-in-charge for less than half of them.

But conversely, that’s not to say, you should be content with the plain vanilla combination of offering tax and audit and calling it a day. There’s a soaring demand for niche advisory services, but the problem is that many CPA firms don’t know how to get there – and unfortunately there’s no GPS that I’m aware of (even the one I bought this week at Costco) that will help you get there.

A number of years ago, the AICPA conducted a profession-wide survey that showed the more services a firm offers a client, the less likely they are to leave a firm. And, as many of you know, there’s no more fickle (or whiny) client than the low-end 1040ers.

Offering in-demand client niches like business valuations, litigation support, state and local taxes or non-profits can help distinguish your firm from the rest of the pack and hopefully usher in new client engagements or expanding the scope of services to current clients. But getting there involves significantly more than advertising it on your website and winging it.

It involves rigid training in-house and selecting a “champion” to oversee the new undertaking, or luring experts aboard from another firm. Not to mention garnering an “all-in” philosophy from the rest of the practice for the new strategy.

But above all, it should not translate into doing your best impression of Costco and having a client services menu that resembles an inventory sheet at a giant warehouse club.

Even yours truly wouldn’t buy into something like that.