If there is one thing that most professional services firms struggle with, it is differentiation. That’s because—if we’re being honest—most firms that are either in the same industry or are niche players within an industry aren’t appreciably different.
When asked to explain what makes them different, most firms seem to work from the same playbook. Maybe some of these so-called differentiators sound familiar to you, too:
- Our people are smarter, more senior, more seasoned, more motivated, etc.
- We are more collaborative; we involve the client at every stage
- We provide results faster
- We are trusted advisors
- We have a proprietary process (that isn’t very different from everyone else’s)
- We have the expertise of a big firm but the agility or personal service of a small one
- We are different (no proof)
If everyone is saying the same things, these statements don’t really qualify as differentiators, do they? That’s why I wrote a piece about how to differentiate the not-so-different firm. Most large, established firms, in particular, look and sound alike because as they grow they accumulate new services like apps on a cluttered phone. “Full service” is pretty much the same thing as “undifferentiated.”
Sheer inertia makes big firms almost impossible to differentiate in the classic sense. (Later, I’ll point out some notable exceptions.) Instead, they use their size to their advantage, relying on their breadth of services, vast portfolio of past client work and name recognition to win new business. Many prospective clients find the scope of these firms reassuring. Others, burned before by the bureaucracy, inattention or inefficiencies that sometimes come with size, are looking for something new.
How Smaller Firms Can Outmaneuver the Big Guys
Small and mid-size firms are usually poorly differentiated, too. After all, most were founded by people who left larger firms and are trying to emulate the market leaders they left.
But smaller firms have a tremendous opportunity that the industry titans don’t: They aren’t too big to change. I’m not saying change is easy. In fact, it can be very, very hard. But there is no better way to truly separate your firm from competitors than to pivot and bake your differentiation into your business model.
I call this “true differentiation”—when you can point to one or more features of your business that your competitors can’t claim. W. Chan Kim and Renée Mauborgne have another name for this approach: Blue Ocean Strategy. Whatever you decide to call it, those characteristics must be valuable to your clients. Being different for different’s sake doesn’t cut it.
If lack of differentiation maximizes the number of competitors you face, the goal of true differentiation is to reduce your pool of competitors. At the same time, it greatly simplifies your marketing because you don’t have to chase down so many unproductive leads and opportunities. It snaps your business into sharp focus.
In his book The Brand Flip, strategist and best-selling author Marty Neumeier urges businesses to complete this sentence:
“Our brand is the only _______ that _______.”
He goes on to explain: “In the first blank, put the name of your category (robotics company, online university, fast-food chain). In the second blank put your key differentiator (sells voice-mimicking parrots, makes you the teacher, caters to vegans).”
Most professional services firms would have a devilish time writing this simple sentence. For one thing, it forces you to focus on just one differentiator. And “the only” means nobody else can claim it.
This task may be easier for retail startups or certain technology product firms—companies that offer something unique. But what if you are a traditional consulting firm, construction company, accounting firm or Salesforce integrator? What do you do?
You go back to the drawing board and rethink the way you deliver your business.
That might mean narrowing your focus to serve a very specific audience (“We are the only general contractor that exclusively serves indigenous tribes across North America.”). Or it might mean developing a new way of delivering your services (“We are the only national accounting firm that works on a cloud-based, no-surprises subscription model.”). Or it could mean fundamentally changing your business. (“We are the only Salesforce consulting firm that charges according to the results delivered.”).
If these scenarios sound like fantasy, think again. There are many, many examples of firms—many of them legendary—that have changed their business model to avoid the commoditization trap. IBM, once a hardware business, reinvented itself as a major software and services company. Adobe was one of the earliest major companies to transition from selling boxed software to a cloud-based subscription model. JPMorgan Chase evolved from a traditional bank to a global financial services firm. Apple was once synonymous with personal computers. Today, it is the world’s leading personal device and services company.
Do you have the courage to swerve and take your business into brave new waters? If so, tremendous opportunities await you.
