Originally published in March 2012, this article was updated in 2023 to include new positioning models that have emerged more prominently in the last decade. Strategic positioning helps ensure you are winning the business you want to win today and puts you in control of your firms’ growth trajectory.
The decision of how to position a professional services firm is a collection of decisions made over time. These choices become more strategic and more expensive as the firm grows, but they’re made at thousands of points along the way nonetheless. The question is, are they made proactively or reactively?
Many firms, caught up in reacting to the challenges of the past several years, may find that their positioning has become a bit muddied. If that’s your firm, now is a good time to step back, consider how you really want to be known in the market, and ensure your positioning is clearly expressing the expertise and value that sets you apart.
How Positioning Evolves Within a Firm
It starts at the firm’s founding when the principal makes the decision to hang out a “shingle” and attract his or her first clients. The nature of these early relationships establishes a precedent for the type of work and clientele the firm continues to service for years to come. But rarely are those first client decisions strategic choices. In fact, usually the early clients of the firm aren’t really attracted and selected; they’re pursued and sold in a desire to survive.
Over time, the firm grows — adding new clients in new industries and new services, which require different people and different skills. Along the way, the firm tells itself that it’s highly differentiated and well positioned — after all, the firm is growing and winning new clients.
Then one day, firm leadership looks around and realizes that it’s not as easy as it once was to articulate what business it is actually in. This is especially true if partners find themselves saying, “It’s easier to say what we don’t do than to describe what we do.” This is a clear indicator that the firm needs to ask itself a few difficult, yet fundamental questions. They usually sound something like this:
- How did we get in THIS business?
- Why are we providing THAT service?
- Why are we pursuing THOSE clients?
This is the moment when positioning stops being reactive and starts being proactive.
Five Fundamental Positioning Models
At this point, the task of positioning moves from being a situational one (How can we win this piece of business with that client?) to being a strategic one (What business are we actually in?). The decision becomes a matter of directing the firm’s expertise in a given direction such that it can attract a selection of high value clients and take control of its future growth.
The firm realizes that to grow as quickly and profitably as it would like, it can only truly own one simple idea in the minds of its clients. Generally speaking, that simple idea is the collective expertise the firm offers to the market. Deciding what that expertise is and should be becomes the fundamental task at hand.
While getting to the simple idea is usually anything but a simple process, there are five ways to think about positioning your firm that can help you hone in on what’s right for you.
#1 – Horizontal Positioning
Generally, the simplest approach to position a firm is to build deep expertise in a relatively narrow service offering, capability, or process specialization that has high value for a wide range of clientele across various industries. I say this approach is the simplest positioning strategy because it doesn’t necessarily ask the firm to radically change itself. The professionals in the firm are asked to deepen their knowledge in a topic they presumably love — some narrow portion of the craft they’ve set out to do.
That said, if the fundamental goal of positioning is to attract high value clients, then it has become increasingly difficult to do this solely by positioning around a narrow service offering. As an example, perform a Google search on the emerging hot topic of “ESG consulting firms.” The resulting string yields over 10M hits. If you Google “HR benefits consulting,” you get 100M results. One of the subsequent links for top benefits consultants in 2022 provides over 1,300 firms claiming competency in this somewhat narrow offering.
Despite all the noise, it is possible to identify firms having success with this strategy. While “tax recovery consulting” produces 146M results, Ryan appears at the very top of the list. The company’s message is clear and simple, “We are known for our ability to find tax recovery opportunities for our clients and to aggressively fight for those dollars, ensuring that no issue or opportunity for tax minimization is left unrealized.” The proof is equally clear and simple, “Last year alone, our multi-disciplinary approach resulted in $2.5 billion in tax savings for our premier global clients.” Those clients span nearly every industry and include industry leaders such as 7 Eleven, American Airlines, Chrysler, Hershey’s, and Panasonic. While many attempts to proactively position a professional services firm take this horizontal approach, few do it as well as Ryan.
#2 – Vertical Positioning
The second approach to positioning is to align the firm’s resources to serve a range of needs for clients within one or a handful of select industry verticals. One of the best single examples of this is the power-focused engineering firm, Sargent & Lundy. Sargent & Lundy can describe its expertise in simple yet meaningful units of measure: it has led the design of 958 power plants including renewable energy, energy storage, nuclear power, and fossil fuels facilities. This experience is tangible and real to the client. It’s worth noting that the firm has ridden this single market focus for over 130 years and has derived over $500M in revenue annually from this strategy (equivalent to ~8-10% of the US market for these services).
It’s easier to find examples of firms that have taken a vertical positioning approach. Among our own clients, TBM Consulting works with manufacturers and distributors. Impact 21 focuses on consulting retailers and energy wholesalers. HT Engineering supports oil and gas pipeline operators.
That said, fewer professional service firms have the courage to position themselves vertically. This is due to the fact that it requires the professionals in the firm to learn quite a bit more about their clients’ businesses than they sometimes care to. While all firms talk about how well they understand a client’s business, very few commit themselves to building deep expertise through the methods of listening to clients, reading their industry publications, and attending their relevant trade conferences. Even if they do all these things, few have built systematic approaches to sharing this insight firm-wide to build the collective knowledge of the firm’s people to truly be experts. Those that have found ways to do this successfully, however, reap the benefits of a successful positioning strategy that makes them the go-to resources in their chosen industries.
#3 – Market Positioning
The third approach to positioning is to dedicate your business to serving a segment of the market based on the size or maturity of your clients’ businesses. In these cases, the best firms often innovate new business models to specifically meet the unique needs of clients at a certain stage in their growth journeys.
Here are a few examples. QStart Labs provides software development for start-ups and early stage companies. The firm has created an entirely new business model for serving this market. Essentially, it’s part developer, part investor, and part entrepreneur. The firm contracts with venture-backed startups over multi-year terms through revenue-share arrangements. That sounds confusing, but it’s simple — the firm knows a lot about how to get a new software product to market so they’re willing to share in the risk (and reward) of a new venture. Now, the interesting part is that while the revenue share model was built to serve the needs of startup companies, it’s enabled the firm to open relationships with companies of all sizes and types that are interested in a unique type of relationship with a software development firm.
On the other end of the spectrum, the strategy and innovation firm Jump Associates (a Rattleback client) focuses on the Fortune 50. It partners with companies like Google, Nike, Samsung, Target, and Virgin to help them take a future focused approach to strategy development. What makes the approach unique is the firm’s ability to bring insights from one industry to another while taking a hybrid approach to strategy development that few firms are capable of offering.
It’s worth noting that between the small businesses and the mega companies lies the middle market of the economy. Over the last 10 years, many firms have tried to position around the middle market as it’s the fastest growing segment of the U.S. economy. But, it’s incredibly diverse; over 200k companies with a diverse set of needs. As a result, a positioning focused solely around the middle market is generally too broad to be effective.
#4 – Positioning by Function or Role
Some professional service firms find success by aligning with a very specific function or role in their clients’ organizations. Such roles and functions may include operations (COO), marketing (CMO), IT (CIO), security (CSO), investor relations (IRO), human resources, or even something narrower like a director of culture or diversity.
Positioning around sales expertise is a popular choice here simply because most sales leaders recognize that excellence in the role transcends industries. Alexander Group is a great example. The organization touts itself as “the world’s leading revenue growth management consultants” and its home page invites the revenue leaders of companies to partner with them to take advantage of its “global experience and proven methods to build differentiated sales, marketing and service organizations.” Because theirs is a functional positioning, Alexander Group works with chief revenue and sales officers in a wide spectrum of industries including healthcare, manufacturing, and technology.
#5 – Positioning Around Technology
As the world becomes increasingly digital, IT services firms continue to play a critical role in the global economy. In the past, many of these firms have hung their hats on the idea of being platform agnostic, meaning they would help their clients find the best technologies for their specific needs or even build a proprietary solution if nothing in the market was quite right.
However, the fastest growing IT service firms today are those positioned as experts in helping companies implement a specific established technology, such as Salesforce, Workday, Mulesoft, Oracle, or even some narrower aspect of one of these complex platforms. This is because companies are often choosing their technologies first and then looking for partners to help them deploy the systems. Service firms that clearly align themselves as experts with these winning platforms make themselves much easier for potential clients to find. Their value proposition is often simple and clear (i.e. we specialize in Salesforce implementation or, more specifically, the quote to cash aspects of the Salesforce ecosystem, for example).
Spaulding Ridge provides an excellent example of a firm that has built its business around a select set of “winning” technology platforms. The company’s home page boldly claims that it only works with best-in-cloud technologies to support its clients in deploying them on a global basis. The firm’s CEO, Jay Laabs, believes that the notion of being technology agnostic is a fallacy; rather he sees it as their job to pick the winning technologies and work with their clients to make the most of them.
A Note of Caution About “The Big Idea”
You’ve probably noticed by now that none of the five positioning strategies we’ve discussed here sound lofty or aspirational. They are straightforward and will likely force your firm to make some changes when it comes to what you offer and who you serve.
It’s tempting to position around a big idea like “achieving high performance” as Accenture did for many years or “solutions for a smarter planet” as IBM has done. Unfortunately, positioning around a big idea is a slippery slope for smaller firms. Large global firms have the resources to invest millions of dollars to make lofty messages become memorable through big, broad advertising initiatives.
There are plenty of places to be aspirational in your marketing; positioning is not one of them. Take control of your growth by clearly defining the clients you want and are best able to serve. Select a positioning approach that makes it as easy as possible for the buyers in those companies to find and remember you. Whatever model you choose, be concise about who you want to serve and clear about why you are the best firm for meeting their needs.
Additional Articles on Positioning
Here are some additional resources you may find useful on positioning: