Forging a Point of Difference

Although our CPE offerings and articles traditionally center on succession and ownership transition issues, we recently veered a bit off our core topics and offered a 1-hour session on starting new client niches.

Actually it was the third webinar on launching new practice areas we’ve offered in as many years, so without going too far out on a limb, I’m guessing there has been a demand for it. And so nearly 400 attendees tuned in and hopefully listened attentively to what I had to say for an hour.

Because the reality of today’s marketplace, whether in accounting or any other segment, is forging a competitive point of difference between your business and the competition. Case in point, if Firm A offers tax and audit services and Firm B also offers both but also wealth management and consulting services as well, which firm do you think would be more enticing to potential clients looking to sign on with a CPA firm?

Ditto with regard to client retention. 

Studies over the years have shown that the more services a CPA firm offers a client, the higher the percentage of client retention. It’s far harder to replace a firm that currently services you in three or four niches than say, a lower-end 1040 client who is just as likely to desert you for a firm charging $10 less to prep a return.

But like anything else the devil is often found in the details. Too often I’ve seen cases where firms hastily launched new client niches without doing the requisite due diligence or even determining if said niche is under or over-served in their particular area.

I find that ironic because these same firms would never advise their clients not to conduct a comprehensive due diligence before buying a business or entering a merger.

Also, will the firm select someone internally to “champion” the new niche, or will a shallow “bench” force them to look outside, either by poaching an available expert at another firm or via a merger? Is there an obvious entrée or easy cross-sell to your existing client base – for example providing wealth management to your tax clients since you’re already privy to their financial information?

If you have a stable of construction clients, offering cost segregation would appear to be a logical strategy.

But whatever category to decide top pursue if at all, avoid the “ready, fire, aim” strategy of rushing in before you’re ready.

See, I just saved many of you an hour of your time with this column. But rest assured we’ll revisit the topic next year.