It’s an age-old question: Should you focus your consulting services on a specific niche or build a more general offering? Weighing the pros and cons of specialization is not a decision to make lightly. In the past, specialization was more risky for consulting firms. Consider the limits a pre-Internet firm would be placing on their prospective client pipeline. With visibility limited to word-of-mouth referrals and regional exposure, the limited number of prospective clients in the base would make it difficult to be successful.
But now, with global reach and visibility, finding clients has less to do with geography and more to do with being the right fit for a clients’ needs. And because specialization helps your consulting firm match specific needs, it also makes it easier to target your marketing efforts. By narrowing the audience you’re trying to reach, your messaging can be more specific, more differentiating and you can address relevant issues faced by the particular niche you are targeting.
When your target demographic searches for solutions, they will be much more likely to find you – with content that speaks to the specific issues they are trying to solve. General consulting firms will appear less equipped and relevant to being the best fit to address their problems.
Our research has shown there are definite benefits to specialization. But how do you decide where to focus your firm? First, determine the kind of specialization you’d be best suited for. Let’s look at the five types.
1. Industry specialization.
Consider the prior experience within your firm. In what industries do your consultants have the most knowledge and insights? Could their expertise translate to more effective, efficient, and profitable projects for your firm?
Choosing to specialize around an industry that your firm is well suited to serve can be a powerful boost to your business. It’s best to select a stable, growing industry—and it’s crucial to keep up with trends and technology in your chosen field, so that you avoid the pitfalls of obsolescence.
2. Service type specialization.
Many service offerings transcend industry, such as strategic planning or social media consulting. By leveraging expertise in a specific service, you can build deep credibility in your area. This is particularly true when focusing on a new or complex service that few businesses have mastered. The challenge with this type of specialization is to avoid the natural draw to expand into other service areas, thus diluting your positioning, messaging, and differentiation.
3. Geographical specialization.
While the Internet gives you access to clients worldwide, your familiarity with a particular geographic region may give you insight into the unique needs of businesses in that area.
Understanding the regulations, trade laws, language, and customs of a specific place can be leveraged into a close-knit community of clients. This specialization is admittedly fading as the world shrinks, but if the right opportunity presents itself there are rewards to be reaped.
4. Organizational role specialization.
Tailor your consulting firm to support specific roles or departments within organizations – for example, human resources directors, CEOs, or IT leadership. Working with a specific role or department within an organization can help you develop and offer insights into the challenges those particular areas face within the context of the overall business. This type of specialization can help you engage with clients across many industries and regions.
5. Specialization in particular types of problems.
Businesses across all sectors share many common problems. By specializing in solving a particular kind of problem, you can attract countless clients.
Some common challenges to specialize around include cost reduction, managing merger logistics, or increasing productivity. The downside to this type of specialization is that you’ll be dealing with temporary situations. Each client whose problem you solve will need to be replaced with a new client.
As you decide on a specialization, consider the experience, education, and access to information and resources within your firm. You might even want to invest in a consulting session of your own with a subject matter expert in the specialty you’re considering.
Stay consistent but flexible.
Specialization can give your business a boost, providing focus for your brand and audience. But specialization isn’t short-term or a one-time thing. Quite the opposite—the power of specialization is in the time your firm has invested in getting to know the industry, service, geography, role or issue you regularly address.
That said, like every business, consulting firms will sometimes have cause to re-evaluate their specialization or adjust their focus. Your clients’ needs, some of which will change over time, will inform your specialization. Changes in technology and market trends may also skew your original specialization. This is a good thing.
Remember, a specialization shouldn’t be a restraint; it’s a focus that helps you serve the clients you’re best suited to help. Follow the need as necessary, but be sure you’re not chasing whims of the marketplace.
It might feel counter-intuitive but it’s true: specializing can remove the limitations your consulting firm faces and open you to more business moving forward. Generalist consultants are not going to disappear, but there are definite long-term benefits to choosing a specialty. A well-chosen specialization goes a long way towards defining your brand and differentiating you from competitors. That brand differentiation will help you generate leads and secure the new clients that you’re uniquely positioned to serve.
To learn more about building your brand, download the Brand Building Guide for Professional Services Firms.