Last week, we released our new study on High Growth professional services firms. The study identified a group of firms that grow 9 times faster and are 50% more profitable than their peers. Although the research showed that you can spend your way to growth, that's not how these firms do it. They actually spend slightly less than average on marketing and sales. So how do they pull off this marketing magic trick?
It starts with a counterintuitive strategy: when most professional services firms zig, high growth firms zag.
Generalist or Specialist?
Most professional services firms find themselves expanding their expertise and offering an ever wider range of services to clients. In some ways, they are simply following demand — clients have a wide range of needs, so firms are merely trying to accomodate them. After all, isn't diversification a good thing?
High Growth firms, on the other hand, are more likely to describe themselves as very specialized. When these firms describe their growth strategies, they talk about focusing on narrow target client groups, offering specialized services, or making carefully targeted acquisitions.
Viva la Differentiation
Most firms believe they are different than their competitors. When you listen to how they describe those differences, however, you hear a lot of vague assertions about great people and dedication to client service. In the absence of specifics and concrete proof, these “differences” all start to sound the same.
High Growth firms also assert their differences. They are, however, three times as likely to have a clear, easy to understand — and therefore believable — differentiator. It's one thing to assert that you have great people. It's quite another to say “85% of our staff have MBAs from a top 10 business school with an average of 15 years of business experience.” While that may or may not be impressive to your target client group, it is certainly a clear and easy-to-understand differentiator. Another specific differentiator might go like this: “We specialize exclusively in the IT needs of small and mid-size credit unions.” The difference, really, is in the details.
Specialization accomplishes two things. First, it allows you to follow and easily communicate a clear strategy. Second, it makes marketing easier. When you know who you are trying to reach and what benefit you bring to the table, it's easier to command people's attention. No wonder High Growth firms favor these strategies.
Stay tuned … next week, I'll explain where clients fit into the High Growth puzzle.