BLOG: How market segmentation can work for your firm

Michael Porter, in his influential book 'Competitive Advantage,' refers to a concentrated targeted marketing approach as a 'focus strategy.'

BLOG: How market segmentation can work for your firm

Xero advisors are increasingly marketing their businesses and services and delivering results. However, some results are better than others.

Jack of all trades; master of none..?

It's difficult, or perhaps impossible, to be all things to all people. The accountants we speak with are increasingly focusing on  a niche, or specialty, and defining their own USP (unique selling point). Market segmentation involves dividing a market into smaller markets or submarkets with common characteristics. From there, target marketing means you can evaluate the market segments to work out the best way to add value to your prospective customers. This enables you to implement your positioning strategy, to make sure you're sending the right market-ready messaging.

Your website is the first port of call for many prospects to validate a word-of-mouth referral. If they've heard about you, the next step will usually be to check you out online.  Make sure your website is up-to-date, showcases your brand, and resonates with your target market. We recommend a website Homepage that encourages engagement, with an eBook download and contact form to enable you to start building your database.  A mobile friendly website set up to SEO best practice guidelines will also help you be 'found' in search results pages. 

Value

Creating, communicating and delivering value is the key to success. Use a starting point with the '4 Ps' of:

  • Price
  • Product
  • Place (channel to market)
  • Promotion 

Your best source of information is through talking with potential clients, setting up a focus or discussion group, and  use of surveys to help determine your market position. It's also important to take a look at the competitive landscape, particularly if your 'product' consists of a range of service offerings.

In the words of Michael Porter, "When employing a differentiation strategy, the organization competes on the basis of providing unique goods or services with features that customers value, perceive as different, and for which they are willing to pay a premium." Differentiation also includes leadership in innovation, service, personnel, convenience, and image. 

CRM

Customer Relationship Management (CRM) is not just the technology you use to keep track of your clients, but a comprehensive business model based around customer focus. Alignment of internal and external business processes and systems make it easy for clients to do business with you. The goal is:

  • customer acquisition - the right customers for driving growth
  • customer retention - satisfied and loyal customers 
  • customer profitability - increased customer margins

We've recently written this post about 'The Age of the Customer.' Being customer-centric is essential. 

Communication

Write a regular blog post, use social media, turn up to events, and generally establish yourself in the thought leadership space in your niche. We highly recommend integrating your website with Xero Practice Manager, and check out how you can create targeted email lists using custom reports here.

Communication has never been more important, but you need to be strategic in this time of information overload. If you'd like more information on how a focus strategy could work for your business,  please get in touch

Michelle Polglase PracticePlus

As General Manager for PracticePlus, Michelle is inspired by innovation and on a mission to provide the best website solutions for accountants and bookkeepers globally.