Twice in the past three weeks in meetings with accounting firms discussion has turned to niche markets and specifically, what needs to be done to exploit a position where an firm has a particular interest or expertise in servicing an industry. I see this as a major opportunity to differentiate your firm and command premium prices so I thought I would dedicate this month’s newsletter article to giving you some tips on how to pull together your own niche strategy – one that will allow you to dominate your chosen industry.
In my view, there are six areas on which to focus:
1. Get clear on your offering
In our business, Proactive Accountants Network, we operate in a clearly defined niche market – we only work with accounting firms. We have learnt from past experience that one to one coaching is limited in its effectiveness, lacking the enhanced accountability of a group environment, but also the lack of leverage that one to one provides is an inhibitor to growth. Our offering is very clear; we provide a group coaching program that gets results. We run our sessions in our purpose built coaching centre, meaning we can control the environment and the outcomes. Whilst many aspects of the content, location of delivery and people delivering have changed over the five and a half years of our flagship product, coachingclub, the basic offering has remained constant from day 1: accountability, learning and sharing. What offering could you provide to your chosen industry? Could you replicate what we do? Or do you have something else that works beautifully well for you that you could expand?
2. Develop a revenue model for your niche industry
No matter what industry you are focused upon, the revenue model concept applies. What is the revenue model for your industry? Is it number of customers x transaction frequency x average transaction value? Or number of jobs quoted for x conversion rate x average job value? Block out half a day and brainstorm strategies in each revenue-driving area, along with ways in which your target industry could become more efficient and better manage cash flow. Once you have your revenue model documented, you have the basis for your content for years ahead.
3. Get yourself a big database
Why not go national straight away? If you are in Australia, go to www.mailinglists.com.au and select your industry. For example, in a coachingclub meeting on Friday we did a quick search on pharmacies. It appears there are 3,713 pharmacies around Australia. The complete list can be had for $186. If you had a penchant for pharmacies, why wouldn’t you grab that as a starting point? We have over 26,000 accountants on our database. It is a big job to keep it clean and updated but it is an absolute gold mine. Remember the three pre-requisites for growth; great brand, big database and loads of activity. If you don’t have a database, no-one is listening to your message. I find many accountants to be ultra conservative. A typical thought process would be, it would cost me around $5K to do a direct mail to that list of 3,700. What if we don’t get a return on that? Well, even at one half of one percent, which is the commonly expected return rate for a direct mail campaign, you would create 15 to 20 leads for your offering. If you convert just one you are ahead. If you’re serious about specialising, you need to invest in a database and then market to it. Which leads to point 4:
Lots of it. Build a social media presence around your chosen industry. This is free and provides you with a platform to push content to your prospective clients. My Twitter followers are approaching 1,000 in the six months since I opened my account. I tweet every day; some of it is my original content, via my blog; and then I retweet content that I feel would be of interest to accountants and their clients. This month, we picked up our first new client from Twitter. One of our Proactive Accountants Network members has won two new clients as a result of our LinkedIn adverts for directing business owners to www.proactiveaccountants.net. But don’t just stick to social media; traditional marketing is important as well. Ask for referrals in a systematised way. Deliver case studies via your website and in hard copy marketing materials. Run seminars, breakfast briefings, teleseminars, webinars, offer free reports or downloads. Write a book. See what works for you and then do more of that (and test changes to or cut out the activities that do not work so well.) Only by generating lots of activity can you make decisions on the best approach for you to get in front of prospects.
5. Create a body of work
You need lots of content. Start a blog and use it to record your musings and observations. It will become a veritable library of useful content. Write a newsletter article on your niche industry at least once a month. Create a seminar series and run it monthly (test what works best for your niche industry – breakfast briefings or late afternoon tend to be the most attractive but it will differ by industry.) If you’re not comfortable in front of a group, get some help in that area – see my blog post on this topic if this is an issue for you: http://bit.ly/nXzMKU. Revisit your revenue model from step 1 above and start to create content that you could deliver to clients around this model. Create an annual benchmark report and open it up to non-clients as a value add and a prospecting tool. One big red flag to be aware of, however: you do not need to create all of your content before you launch. I know people who have spent millions on product or content development but nobody knows about it because they have not invested enough time or money in taking it to market. Get your offering out there and then create your content as you go. And finally…
6. Become the go-to person for your chosen industry
If you are specialising, you need to be an expert. This is a very different position to take from being a generalist. As an expert, you need to know everything about what makes the industry tick. Just as we know everything about what makes a successful accounting firm, you need the answers for your niche industry. Put yourself out there as a leading expert and support that claim with position papers and thought leadership. Get close to press contacts who write on behalf of the industry that interests you (you will find them in industry magazines and on websites and blogs.) Offer to provide them with content at no charge (e.g. a monthly article on best practice in the industry.) Let them know that if they are looking for a comment on a development in the industry, you would welcome their call. And perhaps most importantly, get off the fence and be controversial. You need to move people to want to work with you. By being controversial and speaking your mind, you will polarise people. Some will dislike what you say – don’t worry about that. Just get ready to work with those whose interest you peak and put their hands up to participate in your valuable program.
A niche strategy can be immensely profitable. Follow these six steps and you will be well on your well to capitalising on what might be a latent opportunity in your firm.