How to succeed in a competitive accountancy market
"When industry information is so readily available, accountants must be able to provide convincing evidence of their sector expertise." Adrian Smith discusses the competitive nature of accountancy.
With so much uncertainty over the impact of Brexit and the possibility of a further Scottish independence vote, what is certain is the increasingly competitive nature of the accountancy services market. To remain competitive, many accountancy firms, in addition to practice areas and technical expertise, actively promote their knowledge of industry sectors.
Key areas of industry expertise
A review of the websites of the 20 largest accountancy firms in Scotland indicates that in addition to listing expertise in practice areas, such as audit and assurance, and corporate finance, 80% of these firms also promote a sector or industry focus in areas such as food and drink, and technology and life sciences.
Why has this approach become so commonplace among professional services firms? What are the benefits and risks of adopting a sector focus? Is there still room for differentiation in the market? And does it truly offer added value to clients?
At a time when clients are increasingly sophisticated in their approach to buying accountancy services and industry information is so readily available, accountants must be able to provide convincing evidence of their sector expertise.
There are a number of potential benefits that can be derived from this type of marketing strategy:
- Building st ronger client relationships and achieving higher client retention.
- Increased sector knowledge and therefore an opportunity to offer greater value to clients.
- It enables higher fees as your sector expertise and contribution is more valued.
- More time is spent identifying and building relationships with important contacts and influencers.
- Prospective clients are clearly identified and marketing efforts are focused on these opportunities.
What makes a successful marketing strategy?
There are, of course, risks in implementing this approach; there is a need for strong leadership and a clear vision that must be communicated across the firm. From my experience there are five areas that should be fully considered to reduce any risk and ensure successful implementation of a firm-wide sector marketing strategy.
1. Selecting an industry sector or niche
It is essential to select the correct industry or sectors and this is achieved by a thorough examination of the external market and competitors and the firms’ sector knowledge and marketing capabilities.
2. Leadership and team selection
Strong leaders and effective team members must be carefully selected. In particular, the team leader must have authority and influence within the firm and an ability to lead and coach a team of accountants and support staff.
3. Business planning
The team must develop a clear growth strategy set out in a simple business plan. The plan should include a description of top clients organised according to sub-sector and fee value and should contain key contacts, influencers and intermediaries as well as a realistic list of prospective clients.
Clear areas of responsibilities should be allocated to each team member with well-defined “smart” objectives. The level of current revenues from clients in the sector should be noted, and an achievable growth target established.
4. Marketing and business development implementation
There is little value in creating a plan if it is not implemented effectively and this is best achieved through regular team meetings with a keen eye on commitment to and delivery of agreed actions.
5. Accountability and reporting
Without clear and individual accountability the initiative may fail, if accountants end up focusing on client work and not on business development activity. The team leader must ensure that each team member is responsible and accountable for tasks that will support the sector team, and drive value for clients.
Implemented effectively, there are numerous benefits from pursuing a sector-focused marketing strategy. However these benefits are not easily achieved and the challenge is to bring a team together and successfully execute a well-considered and effective plan.
The accountancy market is more and more competitive and with ever-increasing innovation and competition from non-traditional providers, sector marketing may provide you with an opportunity to grow your business.
The full version of this article can be found in the April 2017 edition of CA magazine.