Greathead, Damien, Vice President, Receipt Bank
As clients become increasingly sophisticated, and as the world becomes increasingly flat, specialization is more important than ever. Firms that develop specialties will be able to compete more effectively for quality clients, they’ll enjoy higher profitability and be able to generate greater brand recognition in their business community.
Client sophistication is a key driver for specialization. No longer do we live in a world where clients use only one accounting firm to service their needs. Thanks in large part to SOX, clients hire different accounting firms to handle different needs and devote bigger budgets to their accounting needs. As a consequence, clients understand the value of paying a premium for services provided by firms that specialize in their businesses and the services they require. In addition to commanding premium rates, specialized niches and practice lines allow accounting firms to differentiate themselves from competitors, help them identify and target prospective clients more easily and effectively, and provide relief from the pressures of seasonal workload compression. At the same time, generalized one-size-fits-all practices are becoming more of a commodity and are more likely to win work that is awarded on price rather than value.
Your firm doesn’t have to be re-engineered into a boutique to take advantage of the opportunities that specialization presents, but it does need to invest appropriately in building niches and specialty service lines (for example, along industry lines such as construction or publishing, or along service lines and become known as the pre-eminent wealth management or business coaching firm.) that will produce the best results for your firm.
Question: What are you already known for in your community?
“Our clients know that we are experts in …..
“our firm in the next 5 years will become the pre-eminent ……… firm in our greater business community.
Here are some important keys to keep in mind:
· Dedicate a champion to each specialty niche and practice area – a key person who is responsible for the specialty and is held accountable for its results.
· Analyze your existing client base, skills of current partners, and service offerings to help identify niches and practice areas that your firm can offer and build with the maximum success. Pay special attention to the types of clients and services that partners and staff enjoy working with.
· Have formalized, written goals and benchmarks for the specialty and measure the progress toward them.
· Create solid marketing plans, growth plans and succession plans for each specialty. Review the plans annually and update them as needed.
· Investigate whether a separate corporate structure is warranted. If so, set one up.
Developing your niche won’t happen overnight but is a long term strategy that will reap significant rewards for your firm.