4 Essential Questions for Positioning Your Firm
Why are you working with the clients you have right now?
If you’re not well positioned, it’s going to be difficult to answer that question.
Most likely, you’ve taken on clients because they were the clients with the money. As your firm has grown (congrats!) and acquired more customers, you’ve continued to expand your book of services to match whatever customers are asking for. You might even be acquiring new companies to offer new services that look profitable.
You’ve become a Yes firm. Yes, we do that. Yes, we have that. Yes, we can do it for you. Unfortunately, saying yes to everything means that your positioning has become bloated.
Through the diversification of your portfolio, your positioning has eroded to the point that no one actually knows what your firm does best, or what it stands for.
If you don’t know what you stand for, your clients don’t either. They may have found your firm by googling “[your city] accounting firms” when their business matured to the point of needing a full service firm. However, their needs will continue to grow and develop. Eventually they will be looking for increasingly capable providers for their specific set of needs. They will need someone who fits a niche and does what they do really well. Your firm needs to evolve with them to offer depth, not breadth.
It’s time to start changing your positioning from “every client” to “the right client.”
The perceived risks of narrowing your focus aren’t real
But wait! You say. We’re a full service firm! We really don’t want to turn down business or make big sweeping changes to what is already working fine.
Well, I’ve got good news for you. It might seem like saying no to business will be dangerous for your bottom line, but this is simply not true. Creating your own niche will help you attract the right clients, and more of them. Positioning helps expand your potential client base beyond your local market. Owning a niche means people outside of your city will hunt you down for your expertise, because you are the best.
Your current strategy of ambiguous positioning isn’t just hurting you. Clients also feel the pain when full service firms aren’t able to scale “doing everything for everyone.” When firms try to do everything, they don’t excel at anything.
Firms need to specialize and focus around their expertise. This helps clients choose the best firm for their exact needs. As your focus becomes narrower, your expertise becomes deeper. Your team will learn more and you’ll find yourself improving to a level you didn’t realize was possible.
Key questions to start positioning your firm
Defining what you will and won’t do can be difficult, especially when you’re already working with many different industries with a big diversified team.
But you don’t have to make dramatic changes right away. Instead, start building a focus and defining reasons for doing the things you do. If you reflect on your strengths and past experiences, you can create a niche that resonates with potential clients.
Here are the four questions that will help you position your firm strategically and start making better business decisions.
Does the majority of your revenue come from a single service area or industry?
In other words: are you already leaning toward a service or industry with the majority of your clients?
Industry-focused (vertical) positioning: Rallying around a specific industry (for example, working specifically with construction companies) is called vertical positioning. This approach allows you to become intimately familiar with your clients’ needs and pain points, and it’s likely the first type of positioning you’ll see emerge from your existing clientele book.
Service-focused (horizontal) positioning: If you have a specific service you’re uniquely good at, you’re looking at horizontal positioning. What do you most enjoy doing? What services that you’re currently offering have the highest margins? By examining what you currently do really well, you can double down on it, and cut out the services that aren’t as efficient.
McGuire Sponsel has positioned itself as the go-to firm for special tax services—including ones that most CPA don’t do. By specializing is such a narrow band of services, they’ve even attracted the business of full-service CPA firms (like your local one) that need to provide specialized tax services to their clients.
What’s the broadest positioning you can claim without actually being full service?
If there’s no clear winner when looking at your existing clientele, you may want to start with a more gradual shift in focus toward a narrower client type. Instead of being all things to everyone, start thinking in smaller and smaller niches until your positioning becomes just a little uncomfortable.
For example, a very well positioned firm might focus on business valuations for dental practices. But if you’re currently a full-service firm, the jump to that narrow of positioning might be too big of a chasm to cross. So maybe you take it a step back, for now, and focus on accounting services for healthcare. While this is definitely too broad, it’s a step in the right direction. Then, over the next few years, you can slowly ease into your new specialty, and you can continue to dive deeper until you eventually hit the positioning sweet spot.
What can you stop doing, starting now?
Positioning isn’t just about defining what you do well. It’s also about identifying what you don’t or won’t do, and then not doing those things going forward.
Reducing the scope of focus for new business means you’ll be able to get deeper into the services or industries you choose. While you might not be ready to 100% commit to a niche yet, you can start narrowing your marketing efforts away from “full service” and toward a smaller market, so that even if all of your new business doesn’t come from your new niche, hopefully much of it will.
Ask yourself what you can do less of, starting now. Who can you stop marketing to? What capabilities can you stop talking about?
This can also be seen as trimming the fat. Instead of taking on clients that will drain resources with low margins, choose to only take on clients in your newly defined wheelhouse. You don’t need to drop any of your current commitments, but start being more selective of future projects.
Does your firm have a bold and highly unique perspective that most wouldn’t claim?
This is one of the hardest, but most powerful, ways to effectively position your firm. The key words here are bold and highly unique. Don’t trick yourself into thinking “super friendly” or “10 years experience” are highly unique perspectives.
To be effective, this strategy needs to be genuine, authentic, and almost shocking. Do you, as a firm, have a unique story to tell? What makes you stand out from the crowd?
K-Coe Isom embraces their unique positioning through value pricing. Instead of having set pricing, K-Coe Isom works with its clients to determine the purpose, impact, and worth of a project, and that’s what the client pays for. The firm’s competitive advantage is clear, and it’s clearly displayed on their website: “Only hire us if we’ll make your company better.”
Your Powerful Position
Ultimately, positioning allows you to own one space in your client’s mind completely. If done well, your name will be synonymous with a specific niche, making you the undisputed expert.
Scarcity is valuable. If you’re one of the only firms offering expertise on a specific service, clients will recognize the value in that. You can speak directly to them. You can speak to their problems, because you know them better than anyone.