Differentiators That Don’t: Accounting Firms Should Avoid These Four Mistakes
The cornerstone of any good marketing strategy is differentiation – highlighting how your accounting firm is different from your competitors. Differentiation creates a competitive advantage by positioning your firm as distinct from similar firms and worthy of closer consideration.
Unfortunately, many professional services firms go about the task of identifying and qualifying differentiators in a brainstorming session or two that typically yield low-value, me-too results that are mind-numbingly similar to their competitors: “we’re a valued partner,” “our firm is an industry leader,” “we offer world-class service.” You get the idea.
Three things separate true differentiators from ineffective, ho-hum marketing statements. They must pass these tests:
- True: Is what you’re claiming a fact and not just wishful thinking?
- Relevant: Is it valuable or interesting to your target audience?
- Provable: Can you support your claim with evidence?
As part of our recent Hinge Research Institute study of high-growth professional services firms, we surveyed more than 500 firms of various sizes and compared high-growth firms to their no-growth peers. One area we focused on was marketing strategy. We looked closely at differentiators used by high-growth and no-growth firms to see how they differed.
We found that no-growth professional services firms favored the following four differentiators the most:
1. “Our commitment to results.” This fails as a differentiator because it’s widely used and virtually impossible to prove. Besides, no one in his or her right mind would say, “We’re not committed to getting results for you.” It does not pass Test No. 3.
2. “Where we’re located.” In the Age of the Internet, location is rapidly becoming less and less important. For professional services firms, it simply doesn’t matter much anymore. It fails Test No. 2 – it’s not relevant. (Note: Interestingly, location could be used as a differentiator if you wanted to position your practice against the big, impersonal national and international players. But you’d have to make a very big deal of your local roots and own the concept.)
3. “Awards we’ve received.” This one also fails Test No. 2. Most clients don’t care about awards – in most cases, the awards have little bearing on the client’s “pain” and how you’re going to “cure” it.
4. “Our general reputation.” If you talk about your reputation as a “good firm,” you’re on shaky ground across all three tests. Whether this claim is true is subjective and largely in the eye of the beholder. Having a reputation as “good guys” is not relevant in many – if not most – cases. There are lots of clients who might prefer to work with an accounting firm that’s known for asking hard questions and being ruthless when it comes to issues such as Sarbanes-Oxley Act compliance and audits.
So, now that you know which differentiators don’t, let’s take a look at some differentiators that do.
The following are the top four differentiators most favored by high-growth firms:
1. “Our marketing/business development approach.” If you’re approaching the market in a way that sets you apart from the competition, especially if you’re able to bring a specialized expertise or market familiarity to bear, that’s a strong differentiator. It passes all three tests.
2. “Our business model.” If you’re offering your services in a unique way – for example, if you focus on a particular industry or highly specialized service – and can offer additional value, such as bundling proprietary software with your services, that can be a strong differentiator. It’s relevant (Test No. 2) and easy to prove (Test No. 3).
3. “Our use of technology.” If you have a technological advantage that benefits the client, such as a hard-to-replicate cloud-based service model that provides flexibility and saves the client time and money, that’s a good differentiator. If the technology only serves your firm with no discernible advantage for your client, then the differentiator is much weaker (it fails Test No. 2).
4. “The quality of our people.” What we’re really talking about is the quality of the expertise of your people. This is a very strong differentiator because it passes all three tests: it’s true, it’s relevant if the expertise is in an area of interest to the client, and it’s provable through papers, industry presentations, and other producible evidence.
Differentiators are a valuable tool for accounting firms in creating awareness and closing sales. You just have to evaluate them carefully and choose differentiators that pass the three tests.
Of course, you also need to measure each one against your key competitors. If someone else already claims one of your differentiators, it may not do you much good. But once you’ve got two or three strong ones, it can be liberating – at last, you have a framework to talk about your firm!
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Lee W. Frederiksen, PhD, is managing partner at Hinge, a marketing firm that specializes in branding and marketing for professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to...