Pros and Cons of Niche Marketing for Accounting Firms and Bookkeepers
As I travel across the country helping organizations with accounting solutions, I am privileged to speak with accountants and bookkeepers in person and hear their stories.
Many of them have heard about niche marketing but are nervous about picking the wrong niche. Others are concerned about navigating the changes in their firm that would result from selecting a niche market.
Before they take the plunge, they want to hear from other accountants about the pros and cons of niche marketing.
Here is what I have heard from accounting firms and bookkeepers who have decided to set themselves up with a niche market:
Pros of Niche Marketing
- Niche marketing sets you apart from other firms. The uniqueness of your firm connects with your target niche market in a way that a general accounting firm cannot.
- Niche marketing allows you the opportunity to specialize in the part of accounting that you really love to do. It also gives you a chance to work with the kind of clients you prefer. Since you are the one who chooses your niche market, you do not have to be “stuck” with the work you dread the most. It’s your firm. It’s your choice.
- Niche marketing gives you the opportunity to receive a higher profit margin for your work because of the depth of your knowledge and experience that no other firm has. This is the perfect opportunity to unveil value pricing packages.
- Niche marketing allows you to work with excellence. If you are trying to be expert in too many areas of accounting, your team will be stretched thin, bouncing from one application of accounting to another, and leaving opportunities for mistakes and wasted time doing projects over again. But, with a niche market, everyone can be up to speed on the issues and needs of the clients since there isn’t the breadth of knowledge required to perform with excellence.
- When you have chosen a niche market, your team can be more efficient since the systems in place will be well established. When you are working with the same type of client over and over again, the systems will be well known by your team.
- Choosing a niche market makes it easier to apply your advertising dollars to the most profitable group of potential clients.
Of course, niche marketing isn’t perfect. The bookkeepers and accountants I have talked with expressed some of the downsides as well.
Cons of Niche Marketing
- You may need to say “no” to potential clients if they are outside your niche. You and your team do not have endless resources and energy. If you truly want to make an effort to grow your niche, you will have to say “no” in order to say “yes” further down the line. This takes some faith that the niche market clients will come. And, it takes some strength on the accounting firm’s part to stay focused on the niche.
- You may need to let some clients go who are outside your niche. As your niche grows, you need to free up your team’s time to focus on the niche. It may be hard to see some clients go. But, you can find other accounting firms and support each other by referring clients who fit each other’s niches.
- There is a large amount of time and energy spent understanding the client’s needs and wants. In order to be an expert in the niche, you will need a strong relationship with the client. You need to listen to them talk about their day-to-day business and pick up clues as to specialized services that can be created to meet the niche’s needs. This relationship approach is not for the faint of heart! But, the extra time getting to know the client’s world is necessary for creating a niche market.
- You will need to keep up with trends in a whole new field. For example, if your niche market is construction companies, keeping up with construction company trends is imperative for you to remain an expert in your niche market.
- You risk the chance that you will misunderstand your target group. Be sure you have a well-thought-out marketing plan so that you don’t miss your market entirely. Rely heavily on word of mouth and referrals from your current clients in the niche market.
Although the cons may sound scary, they are not as bad as you think. And, if your niche market doesn’t work out, it is not etched in stone. You are free to follow a different path, if one presents itself along the way.
Overall, accounting firms and bookkeepers have found great success when choosing a niche market. Do your homework. Then, be brave and step out confidently as an expert in your market. If you never try, you will never know whether you missed your chance to grow and expand your business in a unique way.