Break Out

In previous issues we’ve discussedwhy you should differentiate your firm, and methods that our research respondents have found successful.How you choose to differentiate your firm can mean the difference between breaking out of the pack and being mired in the middle.

While there is no exact recipe that is going to work for all firms, the most effective differentiation strategies are based upon the following:

By service offerings	“We specialize in forensic accounting services,” or “We are the premier firm to offer revenue-cycle-outsourcing services.”
By client needs addressed	“We only work with clients that are experiencing strategic alignment challenges,” or “We only help clients when they need governance guidance.”
By the point of entry to solving client problems	“We address our clients’ construction challenges like other firms, but we begin our projects by first addressing facilities management issues,” or “We begin with tax preparation, then move into investment management.”
By staff	“We have more female partners than any other major law firm,” or “We only recruit professionals from line management positions from the industries that we serve,” or ‘We have the most highly-trained staff,” or “We retain our staff members longer than any other firm.”
By service delivery	“We work at YOUR site,” or “We are the only U.S. based advertising firm to offer econometrics consulting that helps our clients forecast their advertising results.”
By level of client served	“We only work with CEOs.”
By size of client	“We only serve companies with at least $1 billion in revenue,” or “We only focus on mid-tier companies.”
By vertical segment	“We only serve municipalities,” or “We only work with clients in the life sciences sector.”
By geographic location	“We only do work in North America,” or “Europe is our sole focus.”
By value delivered	“We are the only firm whose clients outperform their peers by an average of 100%.”

Ask yourself these questions to help determine if you really are differentiating your firm. Be honest!

Are you providing competitively favorable value for your clients? If clients don’t distinctly benefit from your differentiation strategy, why should they care about it?

Is your differentiation platform protectible against copy-cats? It’s not a very competitively-advantaged strategy if the other guys can replicate it too easily.

Is your differentiation strategy credible in the marketplace and internally, to your own people? If clients don't believe you can pull it off, or if your own staff displays cynicism about your plans, your differentiation strategy will falter.

In addition to being valuable to clients, is your differentiation strategy alsocompellingly attractive to them? Does it evince a “wow” from them when described? If not, it could be a dud in the marketplace, or at least so hard to promote that you’ll lose enthusiasm for it before it takes hold.

Is the strategy sustainable? It won’t do you any good if you can’t keep it going, or if it can’t hold up in the marketplace for the long-haul.

Is your differentiation strategy narrowly focused? If you try to be all things to all clients, you’re not being selective enough. Dare to say NO to something; it will benefit your firm in the long run. It’s all about being different, after all.

For many professional service firms, creating and implementing a differentiation strategy is a relatively new idea. Results are still largely unknown. We talked with Logan Chandler, partner of The Strategic Offsites Group, LLC about how the firm developed its strategy to be different.

"During our firm’s earliest stages, we were convinced that differentiation was critical to success, even to the point of naming the firm. As we considered our firm’s name, we reviewed the way other firms portrayed themselves and named themselves. It was impossible to tell what they did at any level of precision. Too many consultants operate at 50,000 feet. They grow client by client. They say, ‘Workshops? Oh, we do that too!’ We decided to be specific about what we wanted to do: design and manage offsites to drive strategy alignments. For us, it’s about being ‘an inch-wide and a mile-deep.’ Ultimately, we picked a name that telegraphed how we are different. We wanted to be memorable in our clients’ minds. We did not want to blend into everyone else. "

Chandler remarked about The Strategic Offsites Group’s plan to deepen its differentiation in order to stay ahead of inevitable competition.

"By focusing on a narrow strategy you create a level of knowledge that is hard to copy. Every one of our offsites last year was a function of unique processes and proprietary methodologies that we created and that we alone practice. Our process is different; it’s based on a model that no one else has created. But we know, as we enter the next phase of our firm’s growth, that we have to go even deeper to maintain a favorably unique edge. So we’ve set up a program to gather research-appropriate data at every engagement and harvest it in order to deepen our proprietary knowledge, and to make us more effective in helping our clients with their alignment issues. We also plan focused qualitative and quantitative research on the structures that allow executives to align most optimally."

The Strategic Offsites Group’s differentiation platform meets many of the criteria for competitive effectiveness. Value for clients, protectability, credibility, compelling attractiveness, sustainability and narrow-focus.

http://www.marketplacemasters.com/newsletter/issue5-september2004.html