Why is Differentiation Such a Big Deal?

Marc Rosenberg, CPA / Aug 1, 2016

differentiationVirtually everyone agrees that being able to differentiate your firm is cool. Yet, very few local CPA firms are in fact, different. To be fair, the nature of what CPAs do naturally makes them look more alike than different.

But when I think about the 1,000+ firms I have consulted with over 20 years, many of the more successful firms truly differentiated themselves from others, even though they were not really that much different from other firms in the eyes of the outside world.

Pretty much all CPA firms claim that they:

  • Perform audits, accounting and tax, representing themselves as a full service firm.
  • Maintain technology that is state of the art.
  • Have high professional standards, ethics and integrity.
  • Produce high quality work.
  • Employ highly experienced professionals.

These are proudly labeled as differentiators in CPA firms’ websites, but they really are not.

So, is differentiation really worth the effort?

Absolutely, primarily for underperforming firms and for all firms that want to get better, every year.

Gale Crosley, CPA, a preeminent CPA firm consultant specializing in revenue growth, says:

“Differentiating your firm is a powerful way to impress clients with your knowledge of their business and industry compared to other firms.  Without truly differentiating your firm, you will end up competing on price every time.  Differentiation is the path to growth.”

Lee Frederiksen, PhD, is the Managing Partner of Hinge, a consulting firm that focuses on the branding and marketing of professional service firms.  Says Frederiksen:

“Too many firms misidentify what makes them unique and miss opportunities to stand out or reject the necessity of differentiation.”

My review of CPA firm web sites revealed these true differentiators:

  • A specialty service or industry focus such as technology consulting or construction
  • Value pricing.
  • A specific geographic focus.
  • University-style training of staff.
  • Audit quality held to a higher standard because of PCAOB experience.
  • Part of an international alliance used to access national and global resources.

CPA Firm Succession Planning: A Perfect Storm is a must-read for firms that want to stay independent rather than merge out of existence due to a lack of successors.  Many firms believe that succession planning starts and stops with developing future leaders, but there are many other important parts to a succession plan.   This book addresses ►how to assess your existing staff, ►leadership development, ►MP transition, ►governance structure needed to remain independent, ►client transition, ►partner buyout plan, ►partner buy-in plan and other issues.

You have to live and breathe the differentiator every single day

Frederiksen’s research found that high-growth firms are almost three times more likely to have a strong differentiator. He writes:

“Your differentiator must be part of your firm’s DNA and the way you tell your own story.  Your differentiator should be visible in testimonials on your website, in your brochures and in any content you produce online.  When you make business development presentations to prospects, you should explain how the differentiators at the heart of your business will help that client succeed.  You have to live and breathe the differentiator every single day.”

If you’ve struggled with differentiation, keep reading

An outstanding article by Gale Crosley published in the November, 2015 edition of Accounting Today, expounded on differentiation.  The following are quotes from that article.

“Too many firms find themselves with commoditized offerings that are hard to distinguish and lack apparent value.  The path to value requires that you establish a profound understanding of the target specialty.  You do this by committing to, and immersing yourself in the ecosystem of the specialty.


“Being able to uncover, build and communicate this type of value is where revenue is won.   More often than not, the buyer is not going to perceive infinitesimal differences between your firm and others.  But they will remember that you understand them and this is where value is built.


“With so much at stake, there’s no excuse for an unremarkable firm whose pricing, offerings and website are indistinguishable from the competition.”


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