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Choose Inferiority

It's often said that the essence of strategy is what you choose not to do. You can't be all things to all people. This is intuitively true when it comes to manufactured products such as an automobile or a new pair of shoes. But does it apply to professional services in the same way? After all, you are providing the service requested by your client, so you can't arbitrarily omit a key element.

A recent article by Frances Frei in the April issue of Harvard Business Review presents an interesting take on this issue. “Service excellence can be defined as what a business chooses not to do well,” Frei argues.

Since professional service providers can't simply fail to deliver a key client requirement, they are faced with a dilemma. When you try to compete on every aspect of service you will end up being mediocre across the board, according to Frei. The obvious way out of this dilemma is to choose mediocrity on some aspect of your offering.

For example, if you wish to excel in technical excellence and customer service, you may need to concede on price, i.e. you will have to charge more for your offering. Conversely, if you want to compete on price you may have to concede on technical superiority.

While choosing “inferiority” on some aspect of your service offering may run counter to every instinct in your entrepreneurial body, it is an interesting perspective. It's hard to have a competitive advantage in one area without being disadvantaged in another. So, how do you decide where to excel and where to concede?

It seems that the answer to the question ultimately comes from the needs and wants of your core customers. Figure out what's most important to them and structure your offering from there. Don't assume that their priorities mirror yours. They seldom do.

 

Author: Lee Frederiksen, Ph.D. Who wears the boots in our office? That would be Lee, our managing partner, who suits up in a pair of cowboy boots every day and drives strategy and research for our clients. With a Ph.D. in behavioral psychology, Lee is a former researcher and tenured professor at Virginia Tech, where he became a national authority on organizational behavior management and marketing. He left academia to start up and run three high-growth companies, including an $80 million runaway success story.

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