Thursday thoughts: Positioning
I closed last week’s post with the following:
So the key to capturing more value—i.e., raising prices—is to work with clients who perceive greater value in what we create. And this is the result of good positioning.
What do I mean by positioning? In Obviously Awesome, marketing expert April Dunford writes “Positioning is the act of deliberately defining how you are the best at something that a defined market cares a lot about… If we fail at positioning, we fail at marketing and sales. If we fail at marketing and sales, the entire business fails."
For tax professionals, we have two problems here:
We tend to define both ourselves (“tax professional”) and our market (“taxpayers”) far too broadly, making it impossible for any of us to call ourselves “the best” at what we do, and
Even with those too-broad definitions, the imbalance between the supply of tax preparers and taxpayers wanting to work with one means we have no shortage of work. (Though I’d argue a lot of tax professionals and their firms are on the verge of failure due to weak pricing, unsustainable overwork, and poor business management, yet they manage just to stay afloat.)
Of course, we call the second problem “capacity” or lack thereof, but really it’s just an extension of the first (real) problem: A poorly positioned firm is swamped with requests from a market that sees it as a commodity service, and it struggles to find qualified staff who want to work for such a firm at the wages it can afford.
In Secret Tradecraft of Elite Advisors, expert on expertise David C. Baker writes that “your positioning [should] not [be] interchangeable with more than 200 other advisors, but make sure you can find at least 10 other advisors who do the same thing as you. Not who do it the same way as you, but who do the same thing as you. As a secondary check on your positioning, make sure that there are at least 2,000 addressable prospective clients, but no more than 10,000.”
So instead of defining yourself as a tax professional (tens of thousands) who helps taxpayers (millions), how can you define yourself as one of one hundred who works with a handful picked from a few thousand prospective clients?
If your firm isn’t already built like this (and for most of us, it isn’t), don’t try to change it to fit this model overnight. Think of these as targets to aim at over the next few years.
But you can start defining that target today: What is a subgroup of “taxpayers” numbering in the few thousands that you could work with as the go-to expert for that subgroup? When you start thinking in that direction, you’ll wind up with a target market that is cares a lot about something (more specific than “taxes”) at which you will be the best at helping them.
Now for your thoughts…
What subgroup of “taxpayers” that would number in the few thousands could you build a firm for? What’s stopping you for that?
By the way, positioning and pricing are topics covered in my Accepting and Pricing Tax Work course. I’m teaching it at the NH-ME NATP Fall Seminar & Annual Meeting on October 24, 2024 in Concord, NH. If your tax or accounting professional association is looking for speakers, check out my Education page for available courses.