Everyone has heard that you have to differentiate your firm. But is it actually important? And if so, how do you do it? What exactly is brand differentiation, anyway?
They’re all critical questions, and they deserve some close attention. Let’s settle in and unpack everything that professional services firms need to know.
Brand Differentiation Defined
Throughout the life of your firm, you will experience significant changes in what you do.
It’s simply the nature of professional services that the landscape is constantly changing under your feet. Your competitors will change. Your clients’ needs will change. And in the process, what may have been a competitive advantage at the start of your business may lose its relevance. Say goodbye to your competitive advantage.
This is important to remember as we think about the meaning of brand differentiation. In essence, it is your competitive advantage. It is literally what makes your firm different. But the marketplace isn’t going to sit still for you, and what made you distinct yesterday might not set you apart tomorrow.
Differentiation is a continuous process – a matter of evaluating the marketplace and evaluating your firm to ensure that you’re positioned for success.
Why is Differentiation So Important, Anyway?
Research has shown that high-growth firms are almost three times more likely to have a strong differentiator. In addition to setting firms apart from their competition, a robust brand differentiation strategy allows firms to be more targeted in their marketing efforts, speaking directly to the most relevant audiences.
If you don’t have a strong differentiator, the only option left is to compete on price – and that’s a race to the bottom. Put simply, your professional services brand’s differentiators are among your most important assets. They facilitate your relationship to buyers and influencers and they ultimately drive your reputation and pace of growth.
Identifying the differentiators that will define and drive your firm – the qualities that make up your organizational DNA – isn’t easy. That’s why so many businesses claim the same tired qualities as differentiators. Stop me if you’ve heard these before:
- “Our employees set us apart.”
- “We’re trusted advisors to our clients.”
- “We strive for excellence.”
- “We provide fantastic client service.”
- “We have a proprietary process.”
Perhaps your firm uses one (or more) of these would-be differentiators. You might protest that the claim is true – you really do have great people who provide extraordinary customer service to your clients. But this is the secret to a successful differentiator…being true isn’t enough.
The Differentiation Test
In fact, there are three qualities every prospective differentiator must have to meet what you might call the differentiation test. They must be:
- True – Your differentiators have to be grounded in reality.
- Relevant – If it doesn’t matter to your clients, it doesn’t matter.
- Provable – Anyone can claim a quality. You have to be able to prove it.
When everyone claims that they provide great customer service, the best people, and a proprietary process, those things become a lot less relevant to your buyers. And you should ask yourself if you can truly prove any of them. What does it mean, anyway, to “strive for excellence”?
Some qualities, like having good customer service, are simply the cost of doing business. Clients expect it, but it’s not what they’re looking for specifically when they choose a new firm. In fact, our research shows that customer service is rarely an important criterion.
The point is that a quality has to truly matter to clients during the selection process to differentiate you.
How to Identify a Successful Differentiator
We’ve seen that brand differentiation is a critical concern throughout the life of your firm, and it is often a major challenge. The reasons are many, but they often boil down to limited or incorrect data.
Either because they haven’t performed research or because they are making assumptions based on anecdotal information, many firms don’t truly understand what their clients are seeking from service providers.
We’ve seen what doesn’t work, and we know that differentiation is tough. So how can you identify a real, meaningful differentiator and set your firm apart?
There are two ways to leverage a new differentiator. You can identify or discover a characteristic of your firm that already exists and use it to its fullest – or you can decide on a new differentiator. This means you can make deliberate choices to differentiate your firm.
Many people feel that it’s difficult to find a truly meaningful differentiator, but we’ve identified 21 distinct types of differentiators. Here are a few examples.
- Specialization in an industry. This is usually the easiest and most powerful differentiator – it literally proves itself, and by definition it is relevant to your target audience.
- Specialization in serving a specific role within your client’s organization. Like industry specialization, this is a self-validating differentiator that can allow you to own a particular niche in the marketplace.
- Specialization in a particular service. You may be noticing a trend. It’s tough for generalists to set themselves apart, but specialized service providers can position themselves to deliver peerless expertise.
- A focus on understanding a particular audience. More specifically, a specialization in your clients’ particular audience. That might mean “marketing to baby boomers” or providing financial services to self-employed millennials.
- A different business model. If you truly do things differently than your competition – offering a subscription-based service in a market that usually doesn’t, say – you’re sure to stand out from the competition.
The most effective professional services brand differentiation strategies blend several of these approaches to create something truly unique.
You might specialize in a particular industry – and provide a totally unique business model. Or you might specialize in providing a particular service to clients with emphasis on a given audience of theirs.
No matter what approach you take, leveraging multiple differentiators will help you stand out more, and it will make your brand differentiation more robust. When you’ve blended differentiators, it’s less likely that marketplace shifts will render your standout qualities less relevant.
So what does effective differentiation look like in practice? Let’s look at a few well-differentiated industry leaders to find out.
RS&H: Research-Driven, Expert-Led Transportation Specialists
RS&H has been at the forefront of U.S. transportation infrastructure for the better part of a century, making critical contributions in areas ranging from aerospace to highways. Though their areas of work varied, their specialty is clear – large-scale transportation infrastructure.
With a clear area of focus and a storied history of success comes another differentiating advantage: Visible ExpertsSM. Though “great people” and “a knowledgeable team” aren’t very effective differentiators, the presence of high-visibility experts most certainly is one. Through their high profile in your target marketplace, these figures’ expertise is demonstrable and highly relevant to clients.
This is particularly true for RS&H, where the firm’s leading thinkers have shaped several modes of transportation across the U.S. and written key documentation for the country’s air traffic controllers. Further enriching the firm’s brand differentiation, RS&H conducts research with current and prospective clients as well as team members. A forward-looking, empirical approach is just another way they establish a competitive edge.
LBMC Security Services: Industry Specialists
LBMC Security Services are IT security specialists, but their specialty doesn’t stop there. They focus on one of the most dynamic and swiftly changing industries today: healthcare.
LBMC brings its clients specialized expertise in healthcare security at a time when the topic is more urgent than ever before. With a healthcare industry in flux, the rise of electronic health records, and new attention on the healthcare sector from data thieves, their clients need security partners who understand the space intimately.
Fortunately, LBMC specializes in serving healthcare organizations, and this emphasis sets them apart. Today, they’re strongly differentiated and positioned to serve a rapidly evolving marketplace.
Summit Executive Resources: A Disruptive Model
One of the most powerful differentiators possible is a truly distinctive business model – and that’s exactly how Summit Executive Resources set themselves apart.
Traditional retained executive search models have client companies paying the search firm to find the right executive talent. It can be a lengthy and costly process, and Summit saw an opportunity to flip the model on its head.
Instead, executive search candidates pay Summit for executive coaching and career development. Summit develops a rich network of top-tier talent, which they can match to companies’ needs swiftly and at no cost.
Summit’s competitive advantages don’t stop there. They’ve also chosen to focus specifically on senior executive and board of director positions, and they conducted research to verify that there was a demand for their services.
Summit Executive Resources is a perfect example that differentiators are more than a way of talking about yourself. When selected and implemented effectively, they can transform your business and disrupt your marketplace.
Like so many of the most important things in life and business, differentiation is tough. It determines not just how you describe your services, but who you are as a firm – so it’s crucial to get your brand differentiation strategy right.
We’ve taken a look at some common pitfalls and some strong differentiators. With this knowledge in hand, you should be ready to get started differentiating your firm – and taking the lead in your marketplace.
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