Positioning…differentiation…branding…when marketers start throwing around these terms it’s easy for a principal or partner to just roll their eyes and walk away. What are they talking about anyway? Do we really need to differentiate? How do we do it? Does it really matter? My goal with this article is to address the most critical aspects of differentiation in the context of accounting and technology firms.
What Do We Mean by Differentiation?
So, let’s start at the beginning — what does it mean to be a differentiated firm? Maybe more pointedly, what is the actual objective of “differentiating a firm.” A lot of marketing consultants will tell you it’s about “winning more work.” Fundamentally, I disagree. Others will tell you it’s about “getting the firm short listed.” Once again, I disagree. While there’s nothing inherently wrong with either of those objectives, as firm owners I think you should demand more of your firms and yourselves.
Ultimately, a differentiated firm should win more of the right work. On its preferred terms. While making more doing it. As David Maister infamously said, “the most important metric in the firm is profit per partner.” Isn’t that really what it’s all about? So, if our efforts to differentiate don’t make us more money something’s painfully wrong. (An important caveat: that doesn’t necesarily always mean charging more. There are firms that make more but actually charge less).
The Four Elements of a Differentiated Firm
Let’s be clear. Differentiation isn’t solely a marketing task. To be differentiated we have to consider what business the firm is in, what services it provides, and how it delivers and communicates those services in such a way to demonstrate that it’s compellingly unique. The key point there is demonstrate. When we get it right, it’s not difficult for the ideal client to see, feel and hear that we’re compellingly different and perfectly right for them. This is not done with some fancy tagline or “elevator pitch.” It’s not done through some bulleted list on a “Why Us?” page.
It’s done by systemically aligning all elements of the firm towards a very clear, desired outcome — that of attracting, engaging and servicing a well defined group of ideal clients. Working from the inside out, those elements are:
- Positioning – What markets are you in and why? More specifically, who are your ideal clients and what are their unmet needs? (For more on this, check out the article, 3 Ways to Position Your Firm).
- Products – The core disciplines of the firm presented as a collection of services (and possibly, tangible products) that are aligned against those unmet needs.
- Proof – Your expertise, demonstrated as thought leadership, which shows definitively that you understand how to solve those unmet needs better than anyone else.
- Personality – A combination of culture and branding — What is the firm like? A well differentiated firm has a unique culture that is communicated in a unique way (both visually and verbally).
How Clients Respond to a Firm Like This
When a firm intelligently presents itself to the market in this way it does something truly unique. It changes the way the potential client reacts. The right client, upon finding this firm ideally suited for her specific needs responds in an interesting way, “Aha! Exactly the firm I’ve been seeking for years. I wish I’d known about you guys when __[insert some meaningful, difficult challenge the client recently faced that you could have solved for them]__.”
All that said, the right clients don’t just jump up out of the woodwork to a place of complete understanding of your firm’s positioning and expertise. Actually, they essentially absorb this whole thing from the opposite direction. To demonstrate what I mean, I’m going to share some examples.
Example #1: From the Accounting Sector
Shown below are the websites of three fairly similar accounting firms. All have roughly 3-400 employees and provide a similar set of tax, compliance and consulting advice. All are extremely successful, reputable firms. However, one of these firms is communicating itself in a very unique and different way. This firm, Macias, Gini and O’Connell, has chosen to brand as the “Proud to Be Really Boring Accountants” accounting firm. This approach is really fresh, really different, and is likely to turn the head of just about any client looking for an accounting firm. (I truly love it, by the way).
But, let’s dig a little deeper. Is there a meaningful firm positioning underlying this? Has the firm differentiated at a more strategic level than just through its communications? Has it developed a collection of clearly defined products aligned against the unmet needs of a select set of ideal clients? In my opinion, the answer is no. I say this because I see no proof of such expertise, which would be delivered through useful, intelligent thought leadership aligned against the very specific needs of an ideal type of client.
I don’t see any “Aha!” moments for a potential client within the site’s content. Why do I say that? First and foremost, the firm’s language hasn’t changed. It’s still selling the same old “tax, compliance and ancillary services” I’d expect to see from any reputable accounting firm. But, in my experience, when a firm is really dialed in to a clear set of ideal clients, suddenly new products and services emerge that use language more like that of their clients and less like that of their competitive peers.
If I were seeking an accountant would I short list these guys? Absolutely. Would I pay more for them? Probably not. Once I peel back the wrapping on this really compelling packaging, and I look at the firm’s products and proof, I don’t see anything demonstrably different from the other options in front of me. Have they meaningfully differentiated themselves such that they can turn away the bad clients, select the right ones, on their terms, and make more doing it? I don’t think so. That said, they’re certainly on the right track and are a stepping away from a ton of firms in the market.
Pause For Clarity
My goal with this first example was to show how potential clients become acquained with a firm. Clients actually experience a firm from the other end of the pipe, so to speak. While a firm’s “packaging” is the end result of a lot of difficult decisions and hard work, it’s the first point of entry for the potential client. It’s what turns their head. REally unique packaging can get the firm short listed and draw potential clients. But, the path to the right clients, on your terms, with better margins lies in the differentiation that sits behind the packaging — the positioning, the products and the proof.
Example #2: From the Consulting Sector
Once again, below are the websites of three technology firms — Teq, Jabian and Trexin. These are all fairly similarly sized middle market firms from different parts of the country. From my perspective, all three firms have built pretty compelling packaging (brands) for their firms. Simply put, I like being on any of these sites. They’re all aesthetically pleasing and user-friendly.
But, I’d like to dig a little deeper. When I move through the content and thought leadership on the websites of Jabian and Trexin, I see all the expertise I’ve come to expect from a high caliber middle market technology firm. This is expressed through the language and the thought leadership on the site. I see things like, “management and IT consulting, deep data, innovation, human capital management, the integration of business and technology, mobile apps, social networking, and technology optimization.” All great stuff. Concepts that any middle market executive from any market might be struggling with and looking for guidance on right now.
Now, let’s jump over to the Teq site (for more on this site, check out the blog post by John Randle outlining what’s really great about their creative). When I hit this site, I quickly experience that “Aha!” moment. The language is completely and totally different from just about every technology firm I’ve come across. I see things like, “interactive whiteboard usability, digital teacher certification, Edmodo: Facebook for schools, technology for student-centered instruction, web tools for the interactive classroom.” And, my favorite of all sits right at the top of the page, “It’s all about learning.”
If I were a principal or an administrator, this is the technology company I’ve been looking for. They speak my language. They’ve actually structured their entire firm around organizations like mine. Their content and their product offerings quickly provide proof of the positioning (which, I can very quickly and very easily infer) — this is “the technology company for K12 schools.” Teq has aligned all of the 4 critical elements of what differentiates a firm:
- Positioning – It is very clear that their ideal clients are schools.
- Products – It has designed its services against the unique, unmet needs of schools and teachers. It offers professional development, technology consulting and support.
- Proof – It has a rockstar lineup of in-person and online events to demonstrate its deep expertise for this clear market segment.
- Personality – It has a compelling, vibrant brand that feels appropriate and “spot on” to introduce itself to its ideal clients.
Teq clearly has the ability to turn away bad clients. To attract the right ones. On its terms. All, while making more doing it (though it may choose not to given its unique market space). Teq is a really well differentiated firm.
Don’t You Really Want the “Aha!” Moment?
Wouldn’t it feel really great to be at the helm of a firm that gets to hear comments like this from new prospective clients, “I’ve been looking for a firm like yours for years…I didn’t know there was a firm out there that specializes in X…You don’t know how excited I am to find you…I wish I’d known about you guys when I was struggling with Y”
After all, isn’t that really what you got into this business for in the first place? To work with great clients on issues that matter to them. To do it on your terms. And, to make a good living along the way?
- I hope my comments in this article aren’t misconstrued. The firms I’ve highlighted are doing some really interesting things. The peer firms I’ve shared are all really successful, well respected and admired firms.
- Much of the clarity for this article came from a wonderful discussion within the Professional Services Executive Forum on LinkedIn. I’d particularly like to thank Lee Fredericksen, Alan Vittberg and Malcolm Wikes for their contributions in that discussion. Also, I’d like to thank Alan for bringing Macias, Gini & O’Connell to my attention.