It’s long been recognized that success in our profession is often a matter of nurturing a niche. So let’s move beyond the intro course and leapfrog to graduate-level niche building. My goal is to help you get focused and strategic about your niche program through best practices used by successful firms.
Motivating the Champion
Traditionally, firms have considered niche, or segment development an extra-curricular pursuit, potentially valuable yet still relegated to “after-school” status. The niche leader does the best he/she can do given the limited time available. That premise needs to change.
The first step is fairly obvious – to find a committed champion of your niche program. This is someone who will move it into your firm’s core curriculum. They will need help to do this. Task them to establish revenue goals, assign them homework and “give grades.” Once they understand this is core curriculum, tie their goals to the incentive portion of their compensation plan. This individual will likely need product-management training, too. Start with the book Tuned In by Stull, Myers & Scott. There’s a proven methodology to growing business segments to which most accountants are seldom exposed.
When I ask clients about the details of their niche program, specifics regarding anticipated revenue, realization or current-year growth are hard to uncover. How, I ask, can a niche grow if basics about its profitability and anticipated trajectory are not known?
Fire on All Cylinders
It’s commonly believed that pursuing a particular niche means relegating other offerings to the back burner. In fact, you need to be banging on all buttons at once. Think about a company that introduces a new product or service. The launch does not preclude the active growth of existing goods or services. Similarly, CPA firms need to be concerned about and attentive to all aspects of their business.
Niche success is less a function of which niche we choose, but of the presence of optimal market conditions and a committed leader. It’s inefficient and risky to put extensive resources behind a single segment at the expense of other offerings. Despite careful assessment and planning, it just may prove to be the wrong one.
Whether your target is SAS70, litigation support or medical practice management, each niche leader needs to research market conditions to determine if this is where you should be. And don’t put all your eggs in a single basket.
Strategy Trumps Tactics
Finally, I emphasize the importance of focusing on strategy over tactics like brochures, events, or mailings. Thoughtful niche building requires stepping back and crafting a strategy for each segment. Although some problems are systemic, others are specific to segments and can only be uncovered by a careful review of each niche’s data and metrics.
For example, you may learn that while your firm is growing 12 percent annually, a particular segment is moving forward at 30 percent, while another is not advancing at all. Such findings, broken down by segment, can be used to craft a focused strategy, from which individual tactics are derived.
Strategy development consists of three dynamics – services, channels of distribution, and targets. This involves the selection, innovation, packaging, and communications of services to a specific target audience through distribution channels unique to that environment. So for a firm that has identified business valuation and litigation support, the specific target may be divorcing, high net-worth individuals. And the specific channel to reach them may be an association of divorce attorneys. The service offering is a carefully crafted and communicated set of services for the divorcing individual, as well as the divorce attorney.
Get a committed champion behind each niche. Assign revenue growth metrics and give each unique niche strategy the attention and resources it deserves. You won’t regret it and you’ll likely find yourself at the head of the class.