How to Differentiate the Not-So-Different Firm

At Hinge, we’ve written a lot about how to differentiate a professional services firm (for instance, see here, here and here). We even produced a course on the topic. 

One important idea we talk about is the value of specialization. Firms that specialize in an industry, or a group of similar industries, have a competitive advantage and can charge higher fees than their unspecialized competitors. Sometimes they take a different tack, going all-in on a particular service or target audience. There are many variations on this theme.

On the other hand, firms that don’t specialize—and that means most firms—find themselves in a bind. They look a lot like everyone else in their industry, so people have trouble telling them apart. That means nobody stands out, which makes their marketing less effective. And because so many firms sell the same services, buyers have all the leverage in the relationship. That means prices tend to go down, and so does profitability.

There are few ways to win in this situation. You can lower overhead and increase your efficiency. But there’s only so much juice in those lemons. 

Why Buyers Prefer Specialists

Specialists are less affected by commoditization, and buyers just trust them more. That’s because buyers believe—for good reason—that specialists understand their area of expertise better than a generalist. After all, specialized firms are likely to have seen every problem before and are better equipped to fix them. Which means their solution is more likely to be done well and more quickly. 

For these benefits, many buyers are willing to pay a premium. They’ve been burned before by the lowest bidder and they are happy to open their wallets a bit wider to avoid the pain of poor client service and incompetent work. 

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The Innovator’s Advantage

Another excellent way to differentiate your firm is through innovation. You hear that word a lot in the professional services. But true innovation is a lot rarer than all that chatter would have you believe. I’m talking about the kind of innovation that will make buyers take notice. It might be a new business model people haven’t seen before, a proprietary new technology that produces never-seen-before results, or something that dramatically—and measurably—improves the client experience. That kind of innovation is hard to achieve. And to be a true differentiator, it must be easy to understand and provable. Most innovations don’t meet these standards.

What if You Can’t Specialize or Innovate?

What if your firm is too big or too set in its ways to specialize or innovate? What if true differentiation like that is simply out of your reach?

There is another path forward. It is not as powerful as having a true differentiator. But this alternative approach can set you apart, nevertheless.

Before I tell you about that approach, it helps to understand why most firms are so similar in the first place.

Why Professional Services Firms Are Alike

Most professional services firms are, by and large, undifferentiated. Some industries, such as accounting, IT and law, are chock full of look-alikes that offer the same set of services to the same audience.

How does this happen? I can think of three ways. 

First, most firms are formed when one or more professionals leave a larger firm to start their own business. These individuals are excellent at delivering the work, but they don’t necessarily know much about business strategy. Rather than focus on a narrow market or change up their business model, they set up a scaled down version of the firm they left. 

Second, as organizations grow they add more and more services and target an ever-expanding range of audiences. That’s because they need a broader range of expertise and experience to compete with their larger competitors for complex projects.

Third, firms love to follow the leaders. From “best practices” to messaging to branding, they like to model themselves after the biggest and most successful organizations in their industry. This instinct produces a clutch of firms that look, sound and operate like clones.

Chances are, one or more of these forces channeled your firm like a river into the broad, bland Undifferentiated Sea. Gulp. Fortunately, there is a way out. 

How to Differentiate the Undifferentiated Firm

If narrowing your focus or innovating in a meaningful way are out of the question, there is still a technique you can use to help prospective buyers see you as different. It involves finding a way to talk about yourself that is both unique and relevant to your target audience.

Here’s how it works:

Step 1: Know Your Foes

To be different, you need to understand how your competitors talk about themselves. You probably aren’t going to be invited to their sales pitches, but you can still get a good idea of their main themes. The easiest way to do that is to get online and visit each of their websites. 

Visit just two pages: the homepage and About page. On the homepage, look first at the major headlines. What are they prioritizing? How do they talk about their firm? Write it down. Then look for any blocks of text that describe their firm. If you find any, try to pick out any key themes they use to define themselves. Follow a similar approach on the About page. Typically, these pages have a lot more text, but you’ll find the relevant messages in the first paragraph or two.

Follow this process for at least five or six of your top competitors. When you are done, read over your notes and highlight the themes they are using. These are the things you want to avoid in your own messaging. 

Step 2: Look for the Opportunities

This step may be easy or it may be tricky, depending on the hand you have been dealt. Think about your own firm and services and ask yourself a series of questions:

• What are you best at? 
• What do your best clients appreciate most about you? 
• Why do they hire you? 
• What is your value proposition? 
• Is there anything that’s different or special about your firm?
• Do you do something that most firms in your industry don’t

Start a list.

If you have done any client research this is a great place to apply it. In fact, we find that this kind of research can uncover perspectives that you just can’t see from inside your organization. If you haven’t conducted research and you can afford it, I strongly recommend that you do that first, before going through this process. Your final product will be validated and considerably stronger.

Once your list is complete, rule out any of the following:

• The quality of your people
• Your proprietary process (unless it is really, truly different)
• Your client service (unless you can prove that it is truly outstanding)

While you may do the same things as your competitors, they aren’t talking about all of them. They have chosen certain themes to emphasize. As I explained earlier, their points of emphasis are usually well-tread territory that buyers have heard before—messages they’ve adapted from other firms. Your mission is to find messages that neither fall into the commonly used language used in your industry nor overlap with any more-distinctive language used by your top competitors.

Step 3: Draft Your Positioning Statement

Now it’s time to distill your ideas into a coherent statement. Keep it to just a single sentence. That way you’ll be more likely to produce an idea that’s simple enough to be memorable. Below are a few strategies you can try to give your statement some momentum. I’ve also included real-world examples you can use as models:

Strategy 1: Combine Attributes

Look for two or more things you can combine that make you unique, or unique sounding? When you combine the elements can you reasonably call yourself the leader?

Example: We help mid market manufacturing and distribution companies improve their operational efficiency and bottom-line results by making the most of their ERP technology” [combines mid market manufacturers/distributors and ERP technology]

Example: “We are the nation’s leading accounting and research firm for nonprofits and associations” [combines accounting, research, nonprofits and associations]

Strategy 2: Make it Inspirational 

Find a way to appeal to your audience’s emotions and position your firm as inspiring and forward-looking.

Example: “We’ve built our business to address the key milestones at yours—and every critical moment in between” 

Example: “Our goal is to make our communities richer, safer and more resilient—one well-conceived project at a time”

Strategy 3: Connect Your Firm to Something Clients Want 

Think about your client’s biggest business challenges or goals, then tie your services to them.

Example: “We specialize in transforming business data into a formidable competitive advantage”

Example: “We help growth-oriented companies like yours become digital leaders”

Strategy 4: Find a Unique Angle

Look for a way of talking about your business that is surprising, catchy or unusual but still relevant to your clients.

Example: “We believe that all projects, from single-family residences to capital-intensive roads and bridges, are local—requiring local connections, know-how and perspectives to run at peak efficiency”

Example: “A national leadership training and strategy consultancy, we believe in the power of practical”

Once you have your statement, apply it—or some variation on it—to your website, elevator pitch, prospect pitches and marketing materials. If you have done a good job, you’ll start hearing your clients use your language when talking about you. And that can lead to more referrals and greater awareness of your firm in the marketplace.

In some organizations this exercise can be a challenge. Strong personalities, unrecognized biases and resistance to change are common obstacles. In this case, consider using an outside firm to facilitate the process and deliver the differentiated messaging you need.