Accountants: How to Escape the Commodity Trap
June 24, 2015
There are over 2 million accountants and bookkeepers in North America.
That’s a lot of accountants!
Why would a potential client choose you over the accountant down the street from you? What do you do that’s special or different? If you’re unable to answer that question, then chances are neither can your potential client.
Bringing something different to the mix is essential in terms of developing your firm, charging fair prices and ultimately having more fun in what you do.
Standing out from the crowd
Standing out as an accountant isn’t always easy. The services we provide have become heavily commoditized over the years thanks, in part, to some of the excellent tools and technology that we use. Although still requiring a good amount of skill and knowledge, bookkeeping, producing financial statements and corporate tax returns have become easier than ever, meaning that more people are doing it. And with very little differentiation occurring from firm-to-firm and accountant-to-accountant, it’s only natural that what we do is viewed as a commodity to our clients, thus beating our prices down.
The obvious solution is to offer something different from your fellow peers so that you can differentiate your services and not fall into the commodity trap. Standing out from the crowd will not only allow you to not get beaten down on price but to also allow you to gain business by attracting clients that you might not have otherwise received had you not differentiated.
A larger national firm recently used the following slogan:
“Accounting. Consulting. Tax.”
With a message like that, you squarely put yourself in the commodity category and as such you have no choice but to compete on price.
An accounting firm is a business like any other. Marketing, branding and strategy is just as important as providing quality accounting services, and is required to stand out from the crowd.
Discover your “Why”
Offering something different and standing out from the crowd is not always easy. Trying to determine how you can differentiate is a hard and often frustrating process. True differentiation does take time and is not something that will happen overnight so it will likely be a gradual process.
The process begins with discovering why you do what you do. Do you know why you do what you do? You might think you do, but ask yourself that question and then think about the answer. It’s not always easy to come up with. In fact, often it’s very hard.
Why did you become an accountant in the first place? Why did you perhaps decide to specialize in tax? Why do you like to meet your clients in person? Why did you follow the path that you did in your career? Ask yourself these questions to really dig down and determine what your “why” is. Once you do discover why you do what you do you can start getting some clarity about which direction you should be taking in order to differentiate yourself from the pack.
When I first started Xen Accounting on my own, I wasn’t sure why I started the firm in the way I did. It started off in mid 2013 as a virtual firm that would only offer Skype meetings, cloud accounting software and certain accounting services bundled into a fixed monthly price. At the time, this was a brand new concept in Canada and I was criticized by other CPAs who weren’t convinced that it was a viable way to run a practice. Nevertheless, this was a path that felt natural to me. Why did I drop everything to start this? Why did I model the services in this way? I don’t really know why to be honest. I just knew that deep down I generally felt that the way certain businesses could be serviced in this space could be done much better and this was the road I chose to take. You might not overly know your “why”, but subconsciously you do. It just takes time to uncover it.
Fast forward two years and our partners are continuously redefining our “why” to help shape our direction, our message and our strategy. This has allowed us to shape our message, guide our actions in all of our decisions and helped us differentiate to stand out from the competition.
For instance, if you believe in offering VIP concierge service (the “Why”), then you could be the only accounting firm in the country that picks up your clients in a limo to escort them down to your office and back (the “What”). You could stand out from the rest on that alone. This is not necessarily the route you should take, but you get the idea.
Figure out why you do what you do and then build out your differentiation from there.
How will this benefit me or my firm?
Differentiation is key in business but very few accountants seem to do it. What sort of benefits can you expect through differentiation?
1. Demand a fair price
Since not everyone is doing what you’re doing, there is less competition and clients will select you for reasons other than just because you do tax returns at the lowest price in town.
When you’re a commodity, the only thing you compete on is price, and that’s the last thing that you generally want to do. All too often, accountants beat down their price only to win over a client. For starters, this is a sure-fire way to attract clients that are only interested in the lowest price possible and therefore for the most part these clients will jump to the next accountant that offers an even lower price.
2. Target your message to an audience that connects with your differentiation point
Don’t try to offer a good service to a broad audience. Instead, offer a spectacular service to a specific audience. Trying to please everyone will never happen and always lead you in a direction that sees your message being diluted which then groups you together with everyone else.
Your differentiator should be crafted and targeted only to those who would receive the greatest value from it. Some people will love it, other people will hate it. That’s fine. That means you’re doing a good job and you will naturally attract clients that connect with your service offering.
Being different is key
Standing out is not easy. There’s a lot of noise out there. Find out why you do what you do and then build out from there.
Break free from the norm. Forget about what accounting firms have looked like for the past few decades. Just because we’re accountants, it doesn’t mean that there’s a certain mould that we need to fall into. Be creative and pave your own road by keeping your “why” in mind. The clients will follow.
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about the author
Xen Accounting a completely cloud-based, 100% paperless Canadian Chartered Accountant firm which combines online accredited accountants with innovative software. His belief is that today’s technology can make accounting for small business more convenient, less time consuming and less irritating.Ryan Lazanis, CPA, CA is not your typical accountant. Destined to bring the traditional accounting firm into today’s modern era, Ryan founded