Five reasons to take your firm niche
Deliberately limiting the type of clients you work with can lead to greater efficiencies in almost every aspect of your practice, believes Jack Thiel CA, co-founder of the Early Adopters Hub, which connects digital accountants with early stage startups.
- Jack Thiel CA is the co-founder of the 'Early Adopters Hub', an accelerator for accounting tech software.
- He believes niching can provide efficiency gains and greater client value.
- Thiel believes niching allows businesses to hone their focus and build deeper client knowledge.
I believe segmentation – a strategic marketing activity which enables businesses to focus their efforts on the clients most likely to be interested in what they offer – ensures the best return on investment of time, effort and money. When you segment your market, niching is a natural outcome, whether it’s niche of industry, region, personality or otherwise. Two accountants I know have niches based around personality types (one is focused on driven, ambitious business owners; the other on helping creative personalities).
Niching isn’t new; most accounting firms have niches they work with, but what is widely undervalued are the efficiency gains and potential benefits that can come from deliberately limiting a market – even if turning away prospective clients may seem illogical.
Pictured: Jack Thiel CA
“Most accounting firms have niches they work with, but what is widely undervalued are the efficiency gains and potential benefits that can come from deliberately limiting a market.”
Here are my reasons why.
Five reasons to contract your market
1. It’s easier to create systems that suit your client base
When focusing on a market niche, you are narrowing the area you need to know well, freeing up your team to concentrate on the chosen areas. By reducing the number of possible scenarios, it becomes easier to create systems and playbooks that the team can follow.
From a sales perspective, this is particularly useful as you can get to know the standard journey of a business in your niche market, and in turn get to know the challenges they face throughout it. This allows you to build a sales playbook that ensures customers are offered the right products and services at the right time.
If a firm was servicing a broad client base, there would be too many different industry nuances to document in a playbook. Consequently, it may not happen, nothing would end up systemised for others to follow and the knowledge would be trapped inside the minds of a few.
2. You can improve staff training and minimise ‘key man risk’
Historically, firms would niche around the expertise of a director, with every director having their own area of focus. By building an entire firm around a niche, it's possible to build more robust onboarding and training for team members, making upskilling staff far more efficient, while minimising ‘key man risk’ (when most of the knowledge is held by a few individuals).
Because the focus is on a niche market, the training needed to get a team member up to speed is less – as they are servicing one industry compared to 50. The knowledge and expertise related to the niche market is spread throughout the firm as a whole. This ensures that when a partner leaves the firm, the knowledge and expertise does not leave with them, so the team is still able to service the client base to the level they have become accustomed.
Traditionally it would take years to build the base of experience required to service a broad client base to a high level, which meant that only a few specific individuals (i.e. the partners) had all of that information.
3. You can simplify prospecting and scale content
Realising you are no longer trying to attract clients from a broad audience, businesses can stop wasting time with generic, value-less content and begin investing in high-quality, relevant content that will add value and attract new clients. And because your existing and prospective clients are in the same niche, and facing similar challenges, the content you create can be scaled across both. When I say content, I’m referring to blogs, articles, social posts, podcasts, webinars, pretty much any content that is being produced and shared with the client base or broader market.
Broad-based firms might write articles such as: ‘Budget 2022, everything you need to know’ – which probably doesn't interest many people at all because it doesn't target them. Niched firms can write more targeted articles such as: ‘Budget 2022, the impact on construction businesses’ – which would resonate with owners of construction businesses.
4. You can create relevant partnerships
Once your niche is defined, you can then seek to partner with other professionals – lawyers, financial planners, insolvency experts, website designers, graphic designers – who also serve the same market. Rather than referring your clients to partners with no relevant experience, you can now connect them with other niche specialists, adding even more value to your client.
5. You can build deeper value and charge a premium
Finally, niching allows you to hone your focus on building deeper knowledge of your clients. You no longer need to stay on top of all the latest tech, regulations and opportunities, you can focus your attention on only those updates that are relevant to your clients. This narrower field of expertise means faster outcomes and greater value for your client. As a result, you are in a position to charge a premium for the services.
With respect to technology specifically, accountants cannot be experts with every piece of software for every type of business, but if you are focused on a niche, you will get to know the best tools for trade and be able to advise existing and new clients on the best practices you see.
Alastair Barlow FCCA, co-founder, Flinder and Shaun Stubley CA, Air Accounting also contributed to this article.
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