Do you know how to cater your accounting services to a specific market?
Specializing in a particular industry can be highly lucrative for your firm. You can increase your firm’s profits and grow your network by focusing on serving a specific type of business, such as food service, education, or agriculture. If your firm’s profits have plateaued or you’re losing clients, consider specializing in a vertical industry, meaning a particular business type.
Gusto, along with our partners at CPA Academy, delivered an informative webinar all about how your firm can focus on serving a vertical industry to increase profits called, “How to Add Revenue to Your Firm Through Specialization.” You can watch the full webinar here, which featured the technology and marketing expertise of Dan Moshe, founder and CEO of Tech Guru.
In this article, we’ll share critical insights into specializing and marketing your services for a specific industry. You’ll learn about how specializing can grow your firm, how to choose your specialization, and how to market and brand your firm to appeal to a vertical industry.
Committing to a vertical industry for business growth
Tapping into a specialization can distinguish your business from other accounting firms. You can specialize in a lucrative industry with an expansive client base to grow your firm. Dan expressed that his tech company struggled before they accessed a specific business vertical:
“We had a wake-up call just a couple of years ago. We found that we were kind of stagnating in growth. … We were getting very little and very unpredictable returns on our marketing dollars and marketing efforts. … Slowly but surely, there was a leak in the boat. We were losing clients here and there to specialization.”
– Dan Moshe
Dan lost many of his clients to businesses that served niche markets. He realized that his company needed to begin serving specific business verticals to enhance its marketing and expand its reach.
In addition to helping your firm expand, specializing enables you to avoid offering competitively low prices. Businesses typically need to reduce their prices to compete with other local companies, but you have more control over your pricing when you offer niche services for a specific profession. For example, if you cater your accounting services specifically to coffee shops, you’ll reduce your likelihood of needing to lower the cost of your services to compete with other local firms. Coffee shop owners will be more likely to use your services because you cater to their field, and they will be willing to pay a higher price because you specialize in their industry.
It may seem like a daunting task to commit to serving a particular industry, but it can help your firm if your profits dwindle:
“[Our] commitment to specialization … didn’t mean … it was going to happen overnight. It didn’t mean it was going to happen in the next month or year. And in fact, it took a couple of years … to really go live with it. And it’s kind of like jumping off a sinking ship. … You don’t want to go down with the boat.”
– Dan Moshe
Committing to specialize in a particular industry will consume much of your firm’s time and resources, but ultimately, you have the potential to create long-lasting relationships with loyal clients because your services cater to their specific needs. Not every firm should necessarily specialize in a particular vertical industry, but if your business struggles to pull in new clients or retain existing ones, you may want to consider adopting specialization.
How to pick your specialization to unlock full growth potential
After you decide to offer specialized services, you need to choose a particular vertical industry. There are several considerations you need to examine, but first, you should think about your current client base:
“[My business] considered those existing clients that we had, and we looked across our entire client base. … We [had] dozens of different types of businesses that we were working with and who … loved working with us. … We started to make a shortlist of about a half a dozen potential verticals we might want to specialize in.”
– Dan Moshe
You can make a list of your current clients and their different industries. You might already have many clients in a particular field, and you can shift towards specializing in that industry. If you don’t have many clients in a vertical industry, you can establish other criteria to determine your specialization:
“What we did is we narrowed it down to the top three that we were most excited about, and what was kind of important for me and my business partner, Micah, was that [the industry] was something that we were interested in really learning more and diving … into.”
– Dan Moshe
Dan and his business partner set their criteria for determining what industry to specialize in, and you need to establish your own criteria. Although your criteria are specific to your firm, you may want to consider specializing in an area in which you can become a top supplier:
“The other criteria is: We needed to be able to have the potential to become the number one or number two technology services provider in that specific vertical.”
– Dan Moshe
When choosing your industry, you also need to consider how the field uses and values your services. Dan’s technology company initially made the mistake of selecting dentistry as its specialization. After attending conferences and networking with dentists, Dan realized that they had picked the wrong industry because workers in dentistry were not proactive in upgrading their technology.
Dan’s company decided to transition from serving dentists to CPAs. A significant factor that led to their decision was that they had many connections with accountants:
“We already were connected to lots of CPAs. We assembled a board of advisors, … which comprised five CPAs, [and] two or three of them were clients. One of them was our CPA. … We knew we were onto something, but we [also] knew it wouldn’t be easy and that [there] was going to be a lot of things that we needed to learn because we were very much outsiders. … In the CPA space, it’s all about relationships and connections.”
– Dan Moshe
When choosing your specialization, consider your current network. You need to build and strengthen relationships with your target industry’s members so you can expand your network and cater to that specific type of business.
Picking an industry vertical can be challenging, and you might have to shift your area of focus to find the most lucrative specialization. Consider your different criteria, and choose an industry that will expand your client base and firm.
Sales and marketing for specialization
After your firm chooses to focus on a vertical, you need to work on your marketing and branding strategy. You need to communicate to businesses that you’re qualified to serve their niche needs:
“This is critical. We needed to communicate to the world that we are focused on a particular vertical. We are here to help. We understand where you’re coming from, and we’re uniquely positioned to help make a meaningful impact in your business as a result of our specialization. … It’s so easy … to get into the habit of communicating and marketing to others the way that you would like to be marketed to. [It] turns out that that just doesn’t work very well.”
– Dan Moshe
Your marketing should focus on addressing the needs of your target industry, and you should adopt a marketing strategy that appeals to your target customer rather than your own industry. Dan’s business focused on a marketing strategy that appealed to CPAs rather than the tech industry. They portrayed CPAs as heroes and their tech company as a helpful resource to achieve their goals.
Another strategy you can use to tap into a particular industry is partnering with organizations in your target vertical:
“We’ve got a great society—Minnesota CPA Society—and we debuted at their tax conference. … They turned out to be a phenomenal partner for us, and they got us a sweet location at the conference. … We found that making face-to-face connections with people is really working well.”
– Dan Moshe
When you form connections with local organizations within your specialization, you can attain a great position for marketing your services to local businesses. For example, if you’re specializing in coffee shops, you can find organizations and events that cater specifically to coffee shop owners so that you can network and find more clients.
In addition to working on your brand and network to draw in new clients, you need to discuss your specialization with your existing client base to avoid turnover. Dan communicated with his clients personally in order to retain their business:
“[We] one-on-one shared with them that, ‘We are going to be specializing, and all of our new clients are going to be accounting firms. That said, … we want to continue to serve you.'”
– Dan Moshe
Dan successfully retained all of his clients because he addressed the changes occurring within his company while also communicating his commitment to their businesses. When transitioning into serving specific vertical industries, you need to reassure your clients that you are dedicated to serving them.
After you extend your brand and network to reach your target industry while also retaining your current clients, you’ll be able to grow your client base and expand your firm.
Learn more about using specialization for business growth
Your firm can specialize in serving the accounting needs of a particular industry to increase profits and expand your reach. You can choose your target industry by evaluating your existing clients and network while also determining which industry values your services. After choosing a specialization, you can grow your brand by positioning your marketing to appeal to your target industry, partnering with industry organizations, and networking at industry conferences and events.
If you want to learn more about marketing your services to a specific industry, read Part Two of this webinar article series. You can also watch the full webinar here.
Do you want to make your firm more efficient so that you have more time to serve your clients? Consider partnering with Gusto! Gusto offers invaluable tools to automate back-office services. Both you and your clients can run more efficiently by integrating different softwares for accounting, expense management, time-tracking, and many other business operations. Visit our Gusto for accountants page to discover how we can help you serve your clients better while also expanding your firm.
