So, let’s start at the beginning.
One of the first questions you have to answer is what niches or industry segments do you serve?
This is not a black and white question. It is one that requires a lot of thought, and usually involves a leap of faith, commonly referred to as a “best guess.”
Most local accountants serve a broad spectrum of clients. Maybe a small restaurant, a dry cleaner, a day care center, a trucking company, a roofing company, or some such other type of enterprise. Accountants in general consider the work they do generic and transferable from one business to another.
Your clients don’t think so.
Each client you have is in an industry with unique characteristics, and they know it. They want you to understand the uniqueness of their industry, and they want to think that you are an expert in the unique tax problems, financial and operating problems, and even the marketing problems they face. They want you to know more about their industry than they do. That’s why they hired you.
There is an old proverb that “A man cannot serve two masters at the same time.” I modify that a bit and say “You cannot serve two masters, until you have learned to serve one well.”
You must make a conscious decision about which target market segment you want to serve, first. Once you have mastered the knowledge required to serve that target market segment well, then you can move on to your next target.
Once you have decided which market segment you are going to serve first, you can begin to design your business model with a strong understanding of that segments specific needs.
Customers can be segmented if:
- Their needs require and justify a distinctly different services offer
- They must be approached through different marketing channels
- They require different working relationships than other groups
- They have substantially different contributions to your margin, and
- They are willing to pay for different aspects of the services you offer.
Different types of target segments CAN include the broad based market that the typical accounting practitioner serves. This is the B2B equivalent of the consumer “mass market.”
While this is a good way of targeting a segment, it is merely a tactic to be used in the strategy you develop after designing or identifying your business model. In other words, as much as I’d like to sell you a subscription to that excellent series, I suggest you wait until you are sure you want to include it as a tactic in your marketing strategy.
Another method of identifying your target segment is to identify their specific needs and problems. In this case you may want to identify prospects by their specific tax needs (need for a Cost Segregation Study), or their financing needs (Commercial Loan Packaging), or possibly their need for customer lead generation (Client Mini-Site Web Hosting). This type of segmentation could conceivably wind up having you serve several different industry segments, each with a unique need.
Your business model could wind up with you serving multiple segments. For example, you could be a generic broad based practice, but you begin to identify clients with accounts receivable problems, so you develop services to aid in receivables and cash flow management. Or, you could be offering a payroll service and develop a staffing service as a means of reducing client payroll costs.
Your business model could even serve two interdependent market segments, such as a practice that needs a large base of referrers to send clients to their office, while at the same time needs a large base of clients to act as referrers. Or, a tax preparation service that needs a large base of individual tax clients, and a large base of payroll clients to aid in creating name recognition among prospects.
For each customer segment you identify, and choose to serve, you must develop a specific value proposition. You must specifically decide what you are going to offer.
And, once you have identified your target market segment, and spelled out the specific value proposition you are going to offer, then you can define how your relationship will be structured and what channels you are going to use to deliver your offer and your services.
So, for now, I want you to download the Rainmaker Target Market Selection Worksheet and use it to identify your target market by following these steps:
First, list the niches you wish to serve or the specializations you wish to offer.
Secondly, identify the trade journals or print advertising media that will reach the majority of the prospects in that niche or for that specialization. (You will not be buying advertising, you are gathering information about the markets.) Get as large a portion of the total marketplace as you could reach through the media you identify, if you were buying ads, that is.
Next, determine how many unique subscribers exist in the universe of all subscribers to the trade journals and/or print media you have identified. (Review the Masthead of the publications, or contact a list broker and request a count of uniques from a merge/purge of all subscriber lists. Be sure to define any zip code requirements, if you are limiting your market to a specific geographical area.) This will give you an idea of the size of your market.
Then, subscribe to as many of the trade journals or magazines as you can read or analyze, with an eye to identifying and understanding the needs and wants of the members of that market.
From the list of target markets you have analyzed, select the one, and only the one, you wish to serve at this time. (As a sole practitioner, your target market is going to wonder about your ability to serve them if they see your targeting as too broad.) You can add a new market later.
Your next step is to review the trade journals or other available media for the target market you have selected, and determine the characteristics of individuals and firms in that niche or specialization. Modify these characteristics to reflect your unique target market segment. One good source you can use to identify trade magazines by category is the online reference of Rutgers University.
Another is BPA Worldwide. BPA is a firm that audits circulation figures for publications and websites. You’ll have to register, it’s free, and then you can search the circulation statements of their customers to get an idea of the market size.
Then, finally, from your review of the media for your target market, list the needs or wants of your target market. Once again, modify these needs or wants to reflect your unique target market segment.
Now, moving on, I want you to understand what assumptions are behind your market selection, so your next step is to refine the demographics you use to describe this target market, until you have a well defined description of the single individual in that market who represents the individual people who will buy your service.
In other words there’s no point wandering around aimlessly. Start with a few assumptions about yourself, and what you can do. Then find the part of the market you can serve, or think about modifying your abilities, if you identify a need you can fill.
Now give that person a name.
Name your customer. Name who you are going to be selling to.
When you think of your target customer, I want you to be able to describe that customer to the point you know how old they are, where they eat lunch, and where they buy their business supplies. I want you to get inside their head and talk to them like the folks they hang out with.
Next, I want you to list their top problems or needs in “Box 2” of the Rainmakers Canvas. You’ll refine this with the method I give you in our next session.
Don’t try to list every problem you can think of. If your target customer is Milton, and Milton owns a small restaurant, I want you to list Milton’s top three problems.
Milton could be concerned that employees are stealing, that the IRS is going to audit him, or he could be worried that his wife is going to divorce him because he works 80 to 90 hours a week.
I want you to know Milton so well, you can empathize with him to the point where you can feel his pain.
Once you know your Milton intimately, match Milton’s problems with the features you used to describe Milton in Cell #1 of your Rainmaker’s Canvas.
Congratulations! You have just taken the first step in building a Business Model for your own practice.
Final note: If you think your services are applicable to more market segments than Milton, create a separate Target Market Worksheet, and then a Rainmaker Canvas for each one, remembering each time to distinguish between customers and users who are not buyers.
In our next session, I’m going to start you on your road to building identifying the needs of your clients that you want to fill.
Join us here at Practice Builder Publishing and become a part of the community, whether you become a contributing author, a peer recruiter, or merely a raving devotee of the Practice Builder Publishing resources, I'll work with you personally so you can reach the goals you set.
Best to you and yours,
P.S. Think I'm full of B.S.? Maybe you ought to let me know what you think. Plop your comments in the section down below the related articles and let me know what you think.!
P.P.S. Got questions about products and services I talk about, the terms of service, privacy nd all that stuff related to Practice Builder Publishing? Click Here to read the fine print.
Share your experiences, and pick our brains.
Get Into Tax Representation NOW!
I would love to see you build a great Tax Practice, building a strong client base by helping troubled taxpayers solve their problems with the IRS.
I want you to become a part of the Practice Builder Publishing network, and I want to work with you personally to reach maximum profit potential this year! Nothing I teach or help you with damage your credibility. It will simply get you more clients and help you make more money.
If you stop searching for the next magic trick, the perfect software, the "shiny object" that's going to do all the work for you (note: it doesn't exist)- and just focus on building & serving your market - you'll actually start seeing GREAT results. FAST.
Get started building your practice by learning how actual practitioners build their business marketing tax representation services, and start building it FAST, by clicking on the link below. Click the button below and find out more!