So let’s talk about targeting niches.
Which means we’ll have to talk about Michael Porter, the highly respected Hard Perfesser.
What I’m going to say might offend you, hurt your feelings, make you think I’m a niche SNOB — or it might just enlighten you and make a few light bulbs go off in your mind. Or all of the above! LOL…
“I Have A Niche”
I had an interesting discussion on the brainstorming call with one of my “Inner Circle” members who said that. He said, “I Have A Niche. I Specialize In Quickbooks.” It’s not the first time I’ve heard that, or heard it about Quicbooks or Xero or Cash Flow Statements even – or just accounting services in general.
Everyone has their opinion, right?
That’s totally fine.
But first, lets get in a word from the experts. Let’s ask the oft quoted Harvard professor, Michael Porter, the author of 18 major books on competiveness.
For those of you who aren’t familiar with him, Professor Porter is the Bishop William Lawrence University Professor at The Institute for Strategy and Competitiveness, based at the Harvard Business School. He is a leading authority on competitive strategy and the competitiveness and economic development of nations, states, and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally. He chairs Harvard Business School’s program dedicated for newly appointed CEOs of very large corporations.
Whew. That was a mouthful. And straight from Wikipedia.
One of his major contributions was something which major firms have come to call his marketing strategy matrix.
In his work, Professor Porter posited ( Just LOVE that word “posited.” Don’t you?) that there only two ways that an enterprise could compete, as a “Low Cost Leader,” or through “Differentiation.” And those two modes could only be modified through “Focus,” resulting in “Focused Low Cost Leadership” and “Focused Differentiation.”
Play with those awhile and about all you will get is a 2×2 matrix defining every marketing startegy you can ever choose from.
In the accounting field, accountants crawl all over each other adopting the latest and greatest new technology in order to maintain competitiveness, only to wind up just treading water in order to stay in place.
You are in a knowledge business, and technology does not give you a competitive edge. Only your knowledge does.
And that is where choosing a strategy of differentiaion shines. Differentiaion through the acquisition of specialized knowledge is not something a competitor can merely order from Amazon and have installed on their desktop.
For my own ease of remembering, I have divided Practice Differentiation into Industry Niches and Practice Specializations. Industry Niches is sort of self explanatory, but Practice Specializations is not quite, so I’ve added the following qualifier: Practice Specializations are skillsets that are not applicable to all accounting clients, and which require additional training or limited resources in order to be delivered.
Whether you choose to target an Industry Niche, or offer a Practice Specialization, is immaterial. That choice is a tactic. The decision to differentiate your practice is a strategic decisiona and one that offers a competitive advantage you most likely cannot achieve without the heavy investment in technology, systems and procedures required of folks who attempt to be Low Cost Leaders.
Now, look around you at how your competitors are presenting themselves.
Look carefully, and try to identify what they are offering that cannot be easily copied. First of all, you’ll probably find it hard to identify their unique advantages. Usually, that type of offereing is not broadcast. Broadcasting your unique specializations gives your competitors information you may not want them to have. Plus, it’s a waste to have information going out of your target market.
The upshot of all this is that what you offer to your target market is going to determine your strategy and ultimately, your competitveness. And, unless you have the money and time to keep investing in the latest “Shiny New Tool,” you may find your time and resources better inested in some form of targeted knowledge.
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Best to you and yours,
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