Specialization is a key tactic for today’s accounting firm, according to the marketing experts, managing partners and American Institute of CPAs leaders who spoke at the 2016 Association for Accounting Marketing Summit.
While developing a niche has long been an advantage in the current business climate, pure competition need not be the driving strategic force.
Accountants, in fact, “should give up that whole idea of being different,” urged Michael Carter, founder of Australia-based accounting marketing firm Practice Paradox, who critiqued the “templative” nature of most accounting firm websites. “Focus your strategy. Forget ‘we’re better because,’ ‘we’re different because,’ and instead focus on specific target markets.”
“Uber specialization is here and now,” Mark Koziel, vice president of firm services and global alliances at the AICPA, told conference attendees, and Jim Powers, chief executive officer of Crowe Horwath drove home the point in explaining the firm’s exponential growth, which earned it a No. 8 ranking on Accounting Today’s 2016 list of the Top 100 Firms, with $721.5 million in annual revenue.
“Innovation is the lifeblood of any company and certainly CPA firms,” Powers said. “Innovation is a huge part of our growth. With a CPA firm [you think], what are you going to innovate? The specialization we’ve had around the industries we’ve chosen to focus on have been a huge part of that growth. A big part of what has driven our success has been innovation.”
Of course, most firms do not have the budget of Crowe Horwath, or the ability to appoint someone in a role to support that—which the firm did when creating the position of chief innovation officer.
William Balhoff, managing director and CEO of accounting firm Postlethwaite & Netterville and Powers’ co-panelist, acknowledged that fact in their joint AAM Summit session.
“For us, it’s more tone at the top,” he explained. “We don’t have a specific officer or budget… Innovation for us is not just about what other firms are doing [but about] doing what you can do. You can do a lot in whatever role you’re in.”
This is especially crucial as accounting firms are transitioning from being purely CPA firms to “CPA-led firms,” according to Koziel. “They are not just hiring CPAs anymore. What are we interacting with the client on? We’ve been technical workers for years and years—clients came to us because of the knowledge we could keep, horde, and give out. Knowledge now is pretty cheap and easy… now we have to become relationship workers. [You have to ask]: ‘Is our team ready to be relationship workers?’”
The CPAs in the firm have to be aware of the “death of the generalist accountant,” according to Carter. “No one ever built a hall of fame to a generalist.”
Crowe might not have a hall of fame, but it does have particular rewards for innovative employees—a promotion.
“At Apple, no one gets a bonus for being innovative—it’s expected,” Powers said. “I’d like to get to that point. We are a long way away. [But] over the last few years we’ve promoted 16 people to partner or director that had a significant role in innovation. We didn’t give them anything separate for doing that, but it matters. They are going to get promoted.”
Postlethwaite & Netterville sets goals for firm partners that go beyond financials to emphasize core values, according to Balhoff. And innovation is a “culturally critical” part of that.
“Marketing is involved in every step of the process,” he shared. “Is there a market for it? How can we make it work best for the market? Every phase of development is investing in innovation and marketing is a partner at the table.”
Balhoff acknowledged that 12 years ago the firm had a marketing director they didn’t fully utilize, resulting in “probably a frustrating process for her.” But now, with his tone at the top, the firm’s marketing professional is a “strategic partner, thought leader and coach.”
The marketing function has become more significant because “boring branding is hurting accountants,” according to Carter, who explained that “powerful forms of communication are being underutilized.”
He listed, among them: ebooks, downloadable information, webinars, videos and screencasts.
Regardless of delivery method, perception is important—not just for prospective clients whose eyes will glaze over at boring branding, but the firm’s employees.
How are firms branding internally? According to Nat Measley, chief operating officer at consulting firm The Fun Department, if a firm is essentially naming their event ‘the mandatory team building outing,’ they are not offering a fun, sensory experience for employees.
“If you are creating and producing a great event, it looks good, feels good, sounds good.”
This criteria also applies to Carter’s “three ingredients for being a remarkable firm”: look great, sound great, be great.
Luckily, for firms that could be deemed remarkable, “success breeds success,” according to Balhoff. And not just internally, but in how other firms are succeeding.
“We have to constantly say, ‘we’re doing this as well or better than anyone else in the marketplace.’”
Firms can attain that edge organically or through acquisitions, which Koziel explained have become more frequent because of this need to specialize. “The mergers of equals has slowed down. Now, with mergers, firms are picking up niche activity, whether regional or a service line. And there are a lot of consulting acquisitions.”
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