By Jack LaRue
When I ask tax or accounting firms to name their most important competition, they almost always name another tax or accounting firm operating in the same vicinity, providing the same or similar services. It's the obvious answer, and it's often at least partially correct. But limiting your frame of reference to other accounting firms can cause you to overlook what might be your strongest competitors - the ones that aren't accounting firms at all. It all depends on your definition of what a competitor is.
To really define what constitutes a competitor, think about the services you offer. Now think about all the options your potential customers have for getting those things done, whether they're accounting firms or not. It may help if you ask yourself the following:
- What is their current method for handling the service you're attempting to win?
- What alternatives are they considering besides you and the status quo?
A good way to approach these questions is to think of your last several new clients. How were they handling their tax and/or accounting prior to coming on board with your firm? Were they being served by another similar tax and accounting firm in town? Were they doing things manually? In their decision-making process, were they actively considering the services of multiple firms, or was it just your firm against the status quo?
When you consider who your firm was truly competing with in your clients' decision-making process, you might be surprised. You may never have considered a software system, such as QuickBooks or TurboTax, a storefront chain, or anything at all as being a competitor. But whatever prospective clients are weighing your services against, that's your competition.
Once you've broadened your concept of who or what your real competition is, you can look at your firm's marketing messages and make sure that they're addressing the competitive advantages that your firm has over them - from the customer's viewpoint. This can help you craft more effective messages for attracting new business - focusing on the specific benefits the customer will receive by changing from the status quo.
Certainly, the more you know about your competitors, the stronger your position is. But you may find it interesting to see who your customers and prospects consider to be your competitors, if not by asking them, by looking at their actions. After all, who is it you and your competitors are competing for?
About the author:
Jack LaRue is the senior vice president, myPay Solutions , at Thomson Reuters Tax & Accounting.