Magazine article The National Public Accountant

Is Your Accounting Firm Truly Marketing Oriented? A Checklist

Magazine article The National Public Accountant

Is Your Accounting Firm Truly Marketing Oriented? A Checklist

Article excerpt

The marketing concept is among the most important philosophies that have influenced business today. It has enabled many consumer goods marketers to thrive in today's very competitive and difficult economic environment. According to the marketing concept, an organization should do all in its power to satisfy its customers' needs and thereby achieve its own goals, that of profit. (Of course, nonprofit organizations such as hospitals and political parties have other goals.) Thus, accounting firms should utilize the marketing concept and focus on client satisfaction as a primary goal of the organization.

Many accounting firms and accountants claim to be marketing oriented. The checklist in Figure 1 is a useful device to enable accounting firms to test whether or not they are indeed following the marketing concept.

(1) Have you defined your business in terms of a product or in terms of a need?

In an important business articles, Theodore Levitt (1960) described a phenomenon he labeled as "marketing myopia." Firms suffering from marketing myopia define their businesses in terms of a product rather than a need or a benefit that customers seek. They are guilty of narrow and short-term thinking that can result in the early obsolescence of the organization. Focusing attention on the needs of customers will keep a firm viable and will help management spot opportunities for new products much more readily than if the focus is on their current products.

For instance, the railroads, at the turn of the century, felt that they were in the business of transporting people and goods by rail. This was a serious blunder since their business was really transportation. There will always be a need for transportation, but not necessarily for rail transportation. By defining their business in terms of a product (rail transportation) rather than in terms of their customers' needs for swift, comfortable, and reasonably priced transportation, the railroads lost most of their business to alternative forms of transportation that did a better job of satisfying customers' needs. After all, an individual who wishes to travel to another state or country does not necessarily care whether it is by rail, car, bus, ship, or plane. Her concern is which mode of travel will best satisfy her needs, in terms of price, comfort, and time.

The same can be said for television or movies. A movie company should not define itself in terms of making movies, but as an entertainment company. There will always be a need for entertainment, but not necessarily for movies. Similarly, there will always be a need for energy, not necessarily oil; communication, but not necessarily telephones; taxes, but not necessarily an income tax.

Similarly, accounting firms should focus on satisfying clients' needs rather than defining themselves in terms of a particular product or set of products. For instance, accounting firms that define themselves in terms of financial record-keeping are suffering from myopia. Much of the traditional business of accountants has been automated and is now done by computer systems. Manually writing up original books of entry (i.e., cash disbursements, receipts, and payroll journals); posting to general ledgers; and taking off trial balances are tasks generally performed by computer software, not accountants. Continue to do business the old way and you become obsolete.

According to Mark Berger of Berger, Torquato & Davis: "Accountants today have to be financial, management, and tax consultants. Even smaller accounting firms are required to have the expertise to answer questions dealing with capital budgeting, optimal capital structure, accounts receivable analysis, cash flow forecasts, and optimal inventory levels. These are decisions that many accountants in the past had little time to deal with. Accountants today have to have the expertise to select the best accounting software for their clients and instruct them in its use. …

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