2012 is now officially upon us. When we look across the landscape of professional services firms, it’s rare that we see truly innovative business models or truly innovative products. All too often, firms are relying much too heavily on selling that next project or program within their given area of expertise. I think it’s time to look at things from a fresh perspective.
Stop Being “Product-Centered”
At most firms we see, marketing is viewed only as a means to sell the services the firm has the experience and expertise to deliver. We consider this a “product-centered” mentality: using marketing solely as a means to sell what we have and what we know how to do. While marketing as a source of lead generation is certainly fundamental to the success of the professional services firm, relegating it solely to this task puts the very future viability of the firm at risk.
Implications on Positioning
“Product-centered firms” tend to fail in the task of positioning. The prevailing belief in firms like these is that “service” is what differentiates the firm — we’re more flexible than other firms, we’re more accomodating, we’re more proactive. In short, their claim is one of better client service. Essentially, they’re selling what they know how to do and what they want to do and trying to tweak it just enough to win the work. But, notice that it’s all from the perspective of the firm and it’s, at best, incrementally better than the competition.
The Market-Driven Firm
By contrast, the market-driven professional services firm is one that is innovating itself to meet the needs of a clearly defined set of clients they know extremely well. It might be innovating services to meet unmet client needs or better yet reinventing its own business model to better align itself with this narrow set of clients.
Need Some Examples?
Just last week I met with a law firm that created an entirely separate company to custom develop a variety of niche software products to more effectively manage the work they do for select clients within a narrow industry vertical.
Or, consider Columbus-based QStart Labs. It’s innovated away from the fee for service relationship typical of most IT consulting firms by offering a cost + revenue share model to help take start-up web products to market in a very short period of time. This kind of market innovation not only enhances the firm’s expertise within the target market, but it creates ancillary sources of recurring revenue.
2012 is the Time to Start
But, here lies the rub. If you’re firm’s not positioned deeply on expertise, or if it hasn’t established itself as an expert provider of services to a select industry vertical or client type, you won’t likely have the skills necessary to innovate new products. So, in 2012, start with positioning. What clients does your firm understand better than anybody else in the world? What are their needs? What services could you provide that you’re not providing now? What services could you provide that no one is providing at all?