Positioning, in a lot of professional services firms, is a rather blunt way to segment the universe. This post looks at how to bring more nuance to your positioning approach to drive better strategic choices.
One of the first articles I ever wrote on this website, almost 10 years ago, was on positioning the professional services firm. Looking back, it was an apropos place to start a blog—if you’re looking to grow a consulting firm the starting point is deciding where you will and where you won’t compete. Of course, the world is littered with the carcasses of firms who never asked themselves this simple question. Worse than that, many firm owners go out of their way to avoid answering the question; telling prospective clients, “It’s easier for us to tell you what we DON’T DO than what we DO.” I’m sure you’ve heard that one. It’s a recipe for disaster.
Looking back, my thinking on the topic was a bit too dogmatic and a lot too simplistic. In that original article, I put forth a very simple model. Your positioning decision was really a horizontal one or a vertical one (or maybe both). You could specialize in A market OR you could specialize in A solution. Of course, few firms on the planet ever get that narrow in either direction, and it’s probably not entirely wise to do so.
Your Firm’s Positioning Should be More Nuanced
In hindsight, I do think that horizontal/vertical description is largely the right place to start. After all, positioning is about making strategic choices. It’s about choosing where you will compete. And you have to segment the world somehow. So, a good place to start is vertically (the markets in which we work) and/or horizontally (the services we provide or the expertise we bring to bear). You’ve essentially picked a segment of the world in which you choose to do business and your positioning model looks something like this:
However, a smart firm will peel back the onion further to get more nuanced in this approach. To start, they’ll answer the somewhat loaded and difficult question—Who is our ideal client? With that second question as a lens, they’ll take that blunt segmentation choice and apply ever more detailed thinking. They’ll go deep in three areas:
- Firmographics—Rather than saying they work in the retail sector, they’ll drill down to a piece of the industry (i.e. middle market retailers with over 500 locations or Fortune 500 soft goods retailers).
- Demographics—Rather than saying they work with the “C-Suite,” they’ll think more deeply about the buying process. (i.e., They’ll determine that their expertise is generally championed by a Sales Manager, sponsored by a CSO, and bought by a committee).
- Psychographics—Most importantly, they’ll drill down into the most pressing issues those clients face right now. And they’ll identify some of the bigger issues those clients may face in the near future even if they’re not quite on their radar yet (i.e. they’ll determine that those same CSOs are struggling to help their sales teams deal with a much more digital, much less relational buying process).
A nuanced positioning model, ends up looking more like this:
Your Positioning Model is a Tool to Make Strategic Choices
In some firms, the strategy discussion just sort of stops there. We had a discussion about positioning. Check the box. We agreed on who our ideal clients are. Check the second box. We know what their issues are. Check the third box. Now, let’s go write and speak about those issues, and run off into the ether to close some deals. But this is just the point where things start to get interesting.
My podcast co-host, Jeff McKay, likes to say that the goal of marketing in a firm is to build brand preference. In essence, you want prospective clients to prefer to work with you to solve a given issue because your firm and your solution is a far superior choice to any other option they might have. Essentially, you’re the best, or maybe only, choice. Ultimately, when you look at your positioning model you want to use it as a leadership team to facilitate some strategic dialogue:
- Awareness—Where, in this new matrix, do prospective clients know us? If we asked an ideal client to name 5 firms “like ours” would we show up? (i.e., If I asked a Retail CIO to name as many IT services firms as they can think of, would your firm show up?)
- Relevance—Again, where on this matrix, do prospective clients see us as relevant? If we asked that same ideal client to name 5 firms that know how to solve a specific issue, would ours be on the list? (Extending our example, if I asked that same Retail CIO to name 5 consulting firms capable of helping them give consumers visibility into what products are available at each of their stores via a mobile app, would your firm be there?)
- Preference—Finally, where on this matrix, are we prospective clients preferred choice? Not only do they think we have expertise in that area, they believe strongly that we’re the best in the world at solving it. (If we pick up our example one last time, that same Retail CIO might say Accenture was their preferred partner for a project of the complexity described.
Your positioning model also gives you a tool to have an informed, strategic discussion about where and how to allocate resources.
- Which issues do you own now? Which issues would you like to own in the next 6 months? 12 months? 18 months?
- Which issues do you have a compelling POV on solving? Where, if anywhere, do you have superior solutions to those problems?
- Which types of clients think of you as relevant for those issues? Is there anywhere, on this matrix, where you’re the preferred choice?
In the end, the positioning model gives you a tool to have more helpful conversations within your firm’s leadership team about where you might invest marketing dollars in the future.
- For instance, maybe your firm has no awareness in the retail sector at all, a targeted play might be to invest in thought leadership that shines a spotlight on how to build an omni-channel commerce platform. That investment puts you on the radar of buyers in that sector and hopefully makes you a relevant choice if that is an issue a client faces.
- Or, maybe your firm lacks a compelling POV on how to help legacy insurance companies (a high target sector for you) react to the introduction of a whole range of innovative new products in the market from unexpected competitors. This may lead to an investment in new research to identify how legacy insurers are responding.
- Or, maybe your firm is seen by manufacturing COOs as the firm of choice to drive operational excellence initiatives within their organizations, but you’d like to be known in additional areas related to dealing with supply chain constraints. This may lead to targeted thought leadership investments in emerging practices within your firm.
Positioning is a Living, Breathing Thing
At the end of the day, like so many things in business your positioning is not a static concept. It’s not a framework designed to pigeon-hole you. It’s a model for having a strategic conversation about where you compete, how you compete, and how you win that is in some state of regular flux. Your job, as a senior leader, is to make sure your firm is always competing in the right places, solving the most pressing issues clients face, and turning those solutions into revenue and growth on behalf of the firm. Having a deeper understanding of your positioning helps you do just that.