Using a Niche to Gradually Increase Profit Margins…
Here are a couple myths that we commonly hear:
- If I market our practice towards a particular niche, won’t that alienate my existing clients which are in many industries?
- How will narrowing my target audience help me grow my practice? It seems counter-intuitive….
- I don’t have enough clients in that area to create a niche.
First, pursuing a niche does not mean that you will walk away from your bread and butter generalist clients. It means that in addition to your generalist clientele, you will slowly start to acquire a tighter pattern of clients so you can demand higher pricing, reduce the number of viable competitors, provide a higher level of expertise, and after you acquire enough, it will be easier for your staff to process a particular client.
The reality is that serving all types of clients (generalist) is the hardest type of practice to operate. A generalist marketing approach yields a lower fee because you are in competition with nearly all firms in the local marketplace. And, the complexity of tax and compliance issues make it very challenging to provide a high quality of service because there are virtually no economies of scale. A generalist practice approach is analogous to using a shotgun and the pricing is a function of local market conditions.
Conversely, narrowing your marketing to a niche is analogous to using a laser, rather than a shotgun, and enables you to make your marketing message more compelling, thus making it easier to close prospects. Here are the benefits of developing a niche:
- You attract prospects from a wider geographic area. The more unique the niche, the wider the radius.
- Your marketing message becomes more compelling and higher quality prospects call your office. The dialogue is now consultative and you are viewed as a subject matter expert.
- Your pricing goes up because there are fewer competitors and the prospect is willing to pay extra because they think their situation is complicated.
- Your close ratio goes up.
- And after you acquire enough of these clients, it becomes easier to process that type of client. The economies of servicing the same type of client are huge for you, and your staff.
- Your retention rate becomes longer (years longer) because the prospect thinks their situation is complicated and could never be addressed by a generalist.
Gradually, you start to add new twists to your niche expertise which make your offering more attractive, and possibly more expensive. And after this niche becomes mature and easy to master for your practice, another niche is created to create another feeder system of high paying clients.
Embarking on a Niche
If you are tired of competing in a commodity type fashion on price, Build Your Firm can help. Watch a short video to illustrate examples of niche marketing opportunities. Today, Build Your Firm has over 35 niches to make this transition easy for you. The risk is nothing and you’ll wonder why you did not do this earlier.
In fact, Build Your Firm provides a 1 year money back guarantee so it’s a no risk offer.
– Accounting niches by industry (AgriBusiness to Non-Profit to Transportation)
– Accounting niches by service (Cross Border Tax to International Tax to QuickBooks Accounting)
Here’s one last short video and then call 888-999-9800 x1 with your questions.