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Differentiated Marketing for Professional Services

What is the best way to grow your professional services firm? Should you specialize and zero in on a specific market niche? Or would that narrow focus be too risky? Perhaps you should broaden your target audiences. Or would you risk becoming nothing special to anyone?

For many professional services firms the answer is neither. They choose a strategy that combines elements of both approaches. This strategy is called differentiated marketing.

Differentiated Marketing Defined

In Differentiated Marketing a firm pursues multiple target markets using different marketing strategies for each. This approach can be contrasted against two alternative strategies: 1) undifferentiated marketing (or mass marketing), in which a single marketing strategy is used to address multiple target markets; and 2) niche marketing (also called focused or concentrated marketing), in which all marketing resources are focused on a single segment of a larger market.

To illustrate these different marketing approaches imagine that an accounting firm has three service lines, and they market each service using a different marketing approach. The first service is tax filings, which they market with an undifferentiated approach. They pursue all market segments using the same set of techniques, including face-to-face networking and encouraging referrals from existing clients. They bill hourly for this service.

Their second service line, outsourced bookkeeping, targets a single market niche — small family-owned restaurants. To reach this segment, the firm attends restaurant trade shows, partners with trade associations, and invests in online advertising. The firm sells this service as packages carefully priced for this niche market.

Their third service line is operational business consulting. Here they use a differentiated marketing strategy. For one target segment, family-owned restaurants, they use the same strategy as the bookkeeping service, and they sell their consulting services as part of a fixed-price monthly package. For a second segment, small manufacturers, they use a different strategy: they focus on cultivating referrals from bankers, and they price their services on an hourly basis. Different target markets, different marketing approaches — each tailored to the needs and preferences of that target market. That is the essence of a differentiated marketing strategy.

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Differentiated Marketing in Professional Services

The professional services industries are particularly well suited to a differentiated marketing approach. Many services can be applied to multiple target markets. This means there are a lot of opportunities to focus on an attractive segment.

Most services can also be tailored to fit the unique needs of a particular segment. So you can adjust your offerings without having to retool a factory or write off inventory of manufactured goods.

Perhaps most importantly, buyers of professional services usually prefer firms that are familiar with their industry and the specific challenges they face. This behavior gives niche focused strategies a distinct advantage. And a differentiated marketing strategy allows you to address multiple segments with carefully tailored services and marketing plans.

It is true that implementing multiple marketing strategies can be more complex and costly. And it requires discipline to plan and execute a differentiated strategy. But the upside can be tremendous.

When choosing between providers, professional services buyers are most likely to choose the firm that has the strongest track record of solving problems like theirs.  Naturally, the advantage goes to the niche-focused specialist.

Figure 1. The top 5 buyer selection criteria that tip the scale in favor of one firm over another.

 

Differentiated Marketing Examples

 

A Consulting Differentiated Marketing Strategy: The AIM Institute

The AIM Institute (AIM) specializes in advising Fortune 2000 companies on product development and launch strategies, and they use differentiated marketing to engage two different audiences.

To address its decision-maker audience (strategic leaders/influencers), AIM has produced targeted educational content, including an ebook entitled, “Leader’s Guide to B2B Organic Growth” and an associated video series. AIM also publishes a special executive-level blog that shares “stories from the trenches.” It reads like a CEO sharing battle stories and insights to another CEO running a large company. All the marketing tools and techniques used with this audience focused on how executives like to learn. Messaging covers product launch strategies—and how these strategies contribute to growth.

For its practitioner audience (tactical implementers), AIM has developed a series of specialized workshops that are more practical in nature. These workshops focus more on product blueprinting and de-risking rather than on B2B organic growth. 

 

An AEC Differentiated Marketing Strategy: Woodward and Curran

Woodward and Curran is an ENR Top 100 engineering firm offering a diverse range of services and industries ranging from nuclear energy to manufacturing automation to city-wide urban renewal projects. It realized that it could not keep using a single marketing strategy to engage itsdisparate clietele. But the firm did not want to move forward without some hard facts to guide their marketing.

So it took a step back and conducted brand perception research across several industries to better understand buying behavior and audience issues. It also conducted demand research around specific services such as outsourced environmental health and safety services for private Fortune 100 firms to gauge prospect interest.

This strategy enabled Woodward and Curran to build a messaging architecture that addressed specific objections, anticipated responses, and offered proof points–all organized by target audience, roles, and services. The engineering firm then rolled out vertical-specific marketing plans, channels, and content.

For instance, those Fortune 100 firms received a personalized, multi-channel outreach strategy — including traditional mailings and small in-person events. Municipal audiences, on the other hand, were targeted with LinkedIn content distribution promotions that allowed Woodward and Curran to stay in front of their audience even during RFP blackout periods.

When to Use a Differentiated Marketing Strategy

When does it make sense to seriously consider using a differentiated marketing strategy? While there are no hard and fast rules, here are some situations when it might be an attractive option:

  1. You have outgrown the niche you are targeting. The niche is too small to sustain the growth you desire. A differentiated strategy allows you to add additional niches without losing the advantages a niche play enjoys.
  2. You are losing your competitive advantage in an undifferentiated market. The services you are offering to your largely non targeted market are becoming more commoditized. It’s harder to win new clients.
  3. Your margins are shrinking. Differentiated services tend to have higher margins and are easier to defend against undifferentiated competitors.
  4. You want to simplify your service offerings. Differentiated services are more targeted so they tend to have less client-to-client variation. This makes them less costly to deliver.
  5. You want to maximize the overall value of your firm. Well targeted niche players typically offer the greatest strategic value to a potential buyer. A differentiated strategy allows you to accumulate these valuable niches and maximize the value of each by tailoring your marketing strategy to wants and needs of individual segments.

 

How to Develop a Differentiated Marketing Strategy

A differentiated marketing strategy requires that you develop a separate marketing plan for each segment you are targeting. We recommend using a strategic marketing planning process similar to the one outlined in this post.

Here are the key steps in the process.

1. Understand the business situation your firm is facing.

The purpose of marketing is to enable a firm to achieve its business goals. If you do not start with a clear understanding of those goals and any constraints that limit your ability to achieve them, you will be unlikely to succeed. What is the business reason behind your selection of a differentiated marketing strategy? What will success look like? How ill you decide which segments to target?

Different types of research apply to different stages of the planning process. For example, opportunity research compares the viability of different markets or target audiences. This type of research helps you decide which segments to target. Client or persona research helps you better understand your target clients and how they select a firm. That is our next step.

 

2. Research your target client segments so you understand their buying behavior, motivations and priorities.

It’s rare to meet practicing professionals who do not believe that they fully understand their clients, their needs and their priorities. Sadly, they are almost always wrong about some key element of their clients’ thinking and decision-making. They misconstrue clients’ real priorities and they rarely understand how clients choose new providers. Research can set the record straight on all these counts. And it can help you evaluate and price  your service offerings..

When you are doing research, focus on your best, most desirable clients within each segment. Which ones do you want more of? Research will equip you to find more clients like them. It will also help you learn how your clients search for new providers and where they get their information. These insights will help you in subsequent steps.

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3. Position your firm in the marketplace.

Successful positioning rejects conformity. At its best, positioning elevates a brand above the fray so that people can’t help but take notice. The human brain instinctively looks for things that are different and unexpected. So a brand that stands in stark contrast to its competition will attract people’s attention and have a distinct advantage in the marketplace. Keep in mind that this positioning must work for all of the segments you are targeting.

Positioning starts with identifying the factors that set you apart. These factors are called your differentiators, and they must pass three tests. Each must be:

  • True—You can’t just make it up. You must be able to deliver upon your promise every day.
  • Provable—Even if it is true, you must be able to prove it to a skeptical prospect.
  • Relevant—If it is not important to a prospect during the firm selection process it will not help you win the new client.

Some differentiators may only be relevant to a single target market. That is okay. But you must have at least one differentiator that is relevant to each segment you are targeting. You can’t have a differentiation strategy unless you are different in some meaningful way. 

Next, you must use your differentiator(s) to write a focused, easy-to-understand positioning statement. This is a short paragraph that summarizes what your firm does, who it does it for, and why clients choose you over competitors. It positions you in the competitive market space and becomes the DNA of your firm’s brand. 

Each of your target markets is likely interested in different aspects of your service offerings or firm. So you will need to develop different messaging for different audiences. All of your messages should be consistent with your positioning, but they may focus on different benefits or overcoming different objections. 

 

4. Define and refine your service offerings.

Often overlooked in the planning process, your service offerings can get stale. Evolving your services over time is how you develop and sharpen a competitive advantage in each of the target markets you have selected.

As clients’ needs change, you may want to create entirely new services to address those needs. Your research may uncover issues clients are not even aware of yet, such as an impending regulatory change, suggesting a range of possible service offerings. Or you might change or automate part of your process to deliver more value at a lower cost with higher margins.

Whatever these service changes turn out to be, they should be driven by your business analysis and your research into clients and competitors.

 

5. Identify the marketing techniques you will be using.

This starts with understanding your target audiences and how they consume information. You gathered this information in the target client research that you conducted in Step 2. Once you understand how and where your prospects are looking for information about issues they are facing or service providers like you, you can reach them in their preferred channels. It’s all about making your expertise more tangible and visible to your target audience. We call this Visible Expertise®.

Achieving high-level visibility requires a balance of marketing efforts — our research has shown that a blend of traditional and digital techniques works best.

Donut-online-offline

Figure 2. A balanced approach to marketing includes both digital and traditional techniques.

 

In addition to balancing your marketing techniques, be sure to create content for all levels of the sales funnel — to attract prospects, engage them and turn them into clients. To keep things as efficient as possible, plan to use content in multiple ways. For example, a webinar could be repurposed as blog posts, guest articles and a conference presentation.

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6. Identify the new tools, skills and infrastructure you will need.

New techniques demand new tools and infrastructure. It’s time to add any new ones you may need or replace those that aren’t up to date. Here are some of the most common tools:

Website – Modern marketing begins with your website. Your strategy should tell you if you need a new website or if adjusting your current messaging or functionality will be sufficient.

Marketing Collateral – You may need to revise your marketing collateral to reflect your new positioning and competitive advantage. Common examples of collateral include brochures, firm overview decks, one-sheet service descriptions and trade show materials.

Marketing Automation – Software is making it easier and easier to automate your marketing infrastructure. In fact, marketing automation tools can be a game changer and essential to building a competitive edge.

Search Engine Optimization (SEO) – Online search has transformed marketing. Today, every firm that conducts content marketing needs a solid grasp of SEO fundamentals — from keyword research to on-site and off-site optimization.

Social Media – Adding or upgrading your firm’s social media profiles is often required. And don’t forget to update the profiles of your subject matter experts.

Video – Common ways to use video include firm overviews, practice overviews, case stories, blog posts and educational presentations. If your subject matter experts have limited time to devote to developing content, video may be an efficient way to use the time they have.

Email – You’ll need a robust email service that allows you to track reader interactions and manage your list — it may even be built into your CRM or marketing automation software. Also take a look at your email templates and decide if they need a refresh.

Speaker Kits – If your strategy involves public speaking or partner marketing, you may also need to develop a speaker kit. A speaker kit provides everything an event planner might need to promote one of your team members for a speaking event: a bio, professional photos, sample speaking topics, a list of past speaking engagements and video clips.

Proposal Templates – Proposals are often the last thing a prospect sees before selecting a firm, so make sure yours sends the right message. At the very least, make sure you’ve included language that conveys your new differentiators and positioning.

Don’t forget the skills you will need. Even the best strategy will accomplish little if you don’t fully implement it. Many leaders find it challenging to deliver a full marketing strategy with just the right balance — and it can be even more challenging to keep teams up to date on today’s ever-changing digital tools. Your choices are learn, retain or hire. The fastest growing firms use more outside talent.

7. Document your operational schedule and budget.

This is where your strategy gets translated into specific actions that you will take over time for each of your target markets. Your written plan should include specific timelines and deadlines so that you can measure your progress against it. Did a task happen as scheduled? Did it produce the expected results? These results will become the input for the next round of marketing planning.

You will need two key documents, a marketing calendar and a marketing budget. The marketing calendar should include every tactic you will use to implement your plan. It can cover the upcoming quarter or even the entire year. Begin by entering any events you know about, such as annual conferences and speaking events. Include every regularly scheduled blog post, emails, trade shows, webinars — everything in your plan.

 

Recognize that you may need to adjust your calendar regularly, possibly as often as weekly. The purpose is to build in consistency and predictability. Leave room for last-minute changes — but don’t get too far away from your plan and budget.

To build a budget, start with the tools and infrastructure we just mentioned. For recurring elements such as advertising, estimate the cost for a single instance then multiply by the frequency. Use benchmarks when available, and don’t forget to allow for contingencies, typically 5-10% of the overall budget.

Figure 3. Summary of the 7 steps to a differentiated marketing strategy.

A Final Thought

A differentiated marketing strategy is not right for every firm. Smaller firms will likely be better served by a niche strategy, for example. Yet many firms can enjoy the competitive advantages of a niche strategy while diversifying across multiple target audience with well-tailored marketing campaigns. Yes, differentiated marketing is more complex marketing. But it is a challenge that is well worth the effort.

Additional Resources

 

How Hinge Can Help

Need help planning and delivering a differentiated marketing strategy? Hinge offers a full suite of research, strategy and marketing planning services.  Contact us for a free consultation today.

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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