Not so long ago, the business of an accounting firm was as predictable as men’s business attire. Tax preparation and audits were about as far as it went. Unfortunately, as firms have attempted to branch out into an array of related services, their experiences have been hit or miss. More often than not, the reason is that they are unfamiliar with some of the fundamentals in bringing a new service to market, and often incorrectly pattern their efforts after bringing products to market.
There is a significant difference between introducing a service and introducing a product. A product can be made in the back room, in the dark of night, then, with the help of marketing and advertising, introduced with a flourish. This is the “build it and they will come” approach. Most firms use this approach with new services. But in fact, a service requires a different strategy. It must be developed in the light of day, with the help of those it will benefit, namely clients. This fundamental difference influences the entire approach.
Seek Answers First
It is not appropriate to merely hang out a shingle and print a brochure or direct mail piece. Yet too many firms do this, believing that irrational exuberance and announcement is reason enough to power ahead.
The first step is research. I prefer to call it exploration, a more active term that involves interviews with four specific types of information sources in the niche – movers and shakers, association leaders, competitors/collaborators, and prospects. This applies to launching service as well as industry niches. These interviews will enable you to make several critical assessments, among them:
- Is the market ready yet?
- Does the potential buyer perceive that CPAs perform this service?
- Do potential buyers understand what you are offering?
Without understanding these factors, your opportunity cycle – the period between identification and closure – will be unnecessarily long, due to an education requirement in the early stages of the cycle. Consider the example of eldercare services. Upon learning that you are entering this field, your market may incorrectly perceive that you’re getting into the nursing home business! What’s more, they have no image of what eldercare is, so you’ll have to educate first. This affects your selection of communication vehicles and venues.
Additionally, exploration enables you to assess:
- What segments and sub-segments of the market have needs that can be solved? In other words, where are the most receptive prospects with the most obvious problems?
- How do we shape the offering to solve the problems?
- Will the target pay enough for the service to make it worthwhile? This will determine whether the service is designed in an a la carte fashion or a comprehensive package, as well as how we’ll price it.
- What competitors are already occupying the space you plan to enter? What segments have they penetrated? What does their offering look like? These answers will determine whether you contemplate partnering with them, or differentiating yourself to avoid confusion among prospects.
These key strategy components are necessary to accurately assess how the service is brought to market. In addition, your interviews should be designed to identify early adopters. They represent your “starter kit” of clients who will serve as a test-bed for delivery of your new service.
As you execute your initial engagements, ask your early adopters to provide valuable input to help refine the service. I encourage articulating in writing your early adopter program, including the role you and the clients will play, and I suggest offering a reduced price for those who agree to participate in the program.
At this point, you need something more than optimal realization – a test-bed, honest feedback and a properly designed offering. Using early adopters can help you procure these valuable assets. If the program is properly designed, early adopters will become emotionally committed to the success of the project, serving as the critical first references.
Can You Replicate It?
New services are frequently championed by an individual with a strong interest in the project. This enthusiasm makes it easy to attract a client. If the results are good, the internal champion may conclude that the firm is ready to offer the new service on a large scale.
But without the approach described above, the likelihood of replicating that success is reduced. The tools, processes and templates necessary for a repeatable methodology are missing. And critical early references, beyond the first, are never developed.
Picture a golfer perched on the tee box and ready to swing. The goal is to hit the ball onto a fairly wide zone, the fairway. As the golfer gets closer to the hole, the shots must become more refined, in order to ultimately land the ball in a three-inch cup. Beginners (and experienced duffers alike!) may land in the sand trap, or in the water. But with planning and practice, the golfer refines his or her ability to sink the ball, replicating the successful shots and developing a strategy that’s repeatable – next hole or next week.
I also liken the process of entering new territory to an underwater ecosystem. As a fish swimming through unknown waters, you must explore the ecosystem to know what bigger fish are out there, and what schools of fish they belong to in turn. Without such advance knowledge, you could be gobbled up and never heard from again.
Don’t Reinvent the Wheel
Investing the time and resources in new services can yield a handsome return. Using the fundamentals of service management, based on proven techniques from corporate America, gives you the highest odds for success.
Good luck breaking valuable new ground for your firm!
Suggested further reading: Marketplace Strategies of Service Companies by Terrill and Middlebrooks.