To avoid being lost in a sea of sameness, accounting firms should think about their offerings as if they were products on a supermarket shelf
This article was first published in the September 2017 China edition of Accounting and Business magazine.
Accounting firms exist to help other businesses. But in minding others’ bottom lines, do they sometimes neglect their own?
After nearly two decades of marketing for accounting firms of all sizes, Katie Tolin believes so. But she has ideas on how to reverse that, disseminated though her own small business, CPA Growth Guides, established in 2015.
What Tolin discovered through her work is that most accounting firms aren’t run like traditional businesses. ‘Rather, partners in a firm oversee its operations, and their hands-on business experience is often limited to doing good work serving clients and waiting for referrals,’ she explains. ‘Too many don’t grasp the role that business operations like marketing, business development, IT, HR and recruiting play in driving a firm forward. Sometimes these functions are afterthoughts and not instrumental parts of business strategy. This has created a sea of sameness.’
Nearly all CPA firms ‘sell’ the same things, deliver them in the same way and even talk about them in the same language, Tolin continued. ‘It’s become almost impossible to differentiate one firm from another. This is further complicated by the fact that most are general practice firms and can do everything for everyone. When you think of yourself in that way, how are you any different than a discount department store like Walmart that sells everything from groceries to tyres to baby cribs?’
Walmart sells so much stuff that its market position is to compete on price, Tolin argues. And she’s seeing some accounting firms leaning that way, too – leading her to ask: ‘Is that really the market space we want to be in?’
When firms have reached a mature stage of practice – they have a good client base, they’re making money, competitors have noticed – they may also have reached the tipping point in terms of their own growth. This is the time to innovate, Tolin says, or risk going backwards.
Her favourite analogy is the Oreo cookie. It’s basically a chocolate sandwich with cream in between, but at the height of the product’s popularity, manufacturer Nabisco innovated. ‘That’s when you began to see Golden Oreos and Oreos with fillings like peanut butter, mint, lemon and many more.’ Those new flavours of an established favourite sparked a new growth phase for the business. By reinventing the Oreo, the company was able to update what it was doing in a way that boosted revenue from its product line.
Accounting’s equivalent is to rethink service offerings as if they were products on a supermarket shelf. In other words, take an intangible, and make it appear tangible.
‘You put your offering into a figurative box, label it and tie it up with a bow,’ Tolin explains. ‘Give it a name that you register as intellectual property. You then describe what you do as if it were a product, so people can easily understand what they are buying from you and what they get for the dollars invested. This helps your box stand out from your competitors.’ Imagine the cereal aisle in a supermarket, she continues, you know what you’re going to get just by looking at the box.
So in the ‘tax aisle’ of a CPA business, there might be different ‘boxes’ for contractors, manufacturers and retail customers, for whom the same tax return is delivered, ‘but it’s done in unique ways that resonate with each individual buyer group,’ says Tolin. ‘You’ll want to have similar aisles for accounting, audit and all the services you sell.’
Tolin is based in Ohio, US, but believes these ideas are universal.
‘No matter where you are located in the world, it’s about understanding where your services are in their lifecycle, and innovating as a way to drive new revenue. However, how you market this – including the words and tactics used – will vary based on region, country and even culture.’
She notes that more firms are beginning to adopt product management and innovation, and thereby creating ‘waves of change’.
‘Some larger firms here in the US have appointed chief innovation officers or ensured innovation is someone’s job responsibility,’ Tolin said. ‘They are beginning to push out changes in mature offerings. Most notably, we’re seeing how big data and the use of technology is changing the way audits are conducted. This change will eventually make its way down to smaller firms.’
Smaller firms are ‘excelling at packaging their offerings’, she adds. ‘They are taking multiple services and bundling them together and selling them as a single service.’
Some are only selling these bundled services to specific markets. ‘They identified who they are targeting and only work for them,’ Tolin said. ‘This leads to a deeper understanding, increased efficiency and a stronger business. Slightly larger firms are now trying to figure out how to include packaging in what they do as this strategy is making its way up market.’
Finally, Tolin argues that ‘you can have the best innovation in the world, but you still have to know how to market it’. Firms owe it to themselves to have on board ‘someone who understands the science of marketing and can help you capitalise on that to gain more profitable clients,’ she says.
Peta Tomlinson, journalist
"By reinventing the Oreo with new fillings like peanut butter and mint, Nabisco was able to boost revenue from its product line"