Major law, accounting, and consulting firms find themselves in a unique moment in time. While the pandemic remains unpredictable, one thing is certain – the professional services industry has changed.
Today, we face a different economic environment, new industry conditions, a changed political climate, and, as always, client needs that are evolving along with the world in which they operate. Some firms have taken the opportunity to build capabilities and shift strategy. Have you?
Leaders everywhere must focus on what’s next and chart a path to sustained profitability and long-term growth. That path runs through differentiation. It’s time to assess whether your current strategy is still the best path to profitability and growth in this new world.
Differentiation is the way in which firms set themselves apart from their competition by highlighting the uniqueness of their solutions and benefits. A successful strategy presents compelling reasons for clients to choose your firm over others and realistic pathways to transforming the firm to represent a truly unique option for clients
Although differentiation sounds like a basic tool for success in the market, it often falls flat. Most companies today sound too much like their competition, with the same industry language and meaningless or repetitive value proposition. How often have you read that a firm has “years of experience” and is “dedicated to serving our clients?” No one even hears these omnipresent claims anymore.
The critical elements of a differentiation have been well defined. You must articulate the markets in which you’ll play, how you’ll win, your ideal client profile, and your measurable goals. Outlining the critical elements of your strategy sets a solid foundation, but once done, how do you know if you’ve done them well?
Too many firms end up with a strategy that promises the world, but doesn’t deliver expected value or any real differentiation. Constantly comparing themselves to each other, they end up more alike than unique. They copy each other and give clients what they’ve come to expect rather than what they may need. Firms that try to break the mold may end up offering differences they either can’t deliver or there’s little interest in.
What many firms fail to understand is that many perceived differentiators like deep industry expertise, an advisor model, or a specific geographic focus are now table stakes. Clients expect you to have deep industry expertise, an advisory rather than compliance-oriented approach, and a local presence. If you are stating these things as if you’re the only one who has them, you are failing badly at differentiation. Do you truly believe you are the only professional services firm with superb communication skills, first-class client services, or attention to detail? Your market does not.
It can be a major investment to develop a differentiated strategy, but firms often achieve little benefit from them. Why? Because a strategy is much like a well organized and thought out proposition— no matter how good it sounds, it needs to be tested.
When it comes to testing differentiation, true uniqueness is clearly one criteria. However, beyond that, you need to determine if the unique qualities or offers you want to market are consistent with your firm’s culture and the realities of how you actually operate. You need to be able to deliver on any promises you make. Here are our four tests for differentiation:
Your customer value proposition (CVP) is the unique and distinctive value you promise to deliver to your clients – why they should choose you over any competitive alternatives, both within your industry and outside of it. It is the lynchpin of your strategy’s differentiation. Is it truly unique? Does it address something your clients care about? Is it helping you sell your services?
Most strategies look good on paper, especially if you express them beautifully with compelling words and striking design. But a truer measure of a strategy is how it impacts the real-world decisions your firm’s leadership must make day-to-day. Business decisions always involve trade-offs. Your strategy should be a useful and clear guide to choosing between competing priorities. What should you invest in? What behaviors should you reward? How should you organize your structure? What initiatives should you undertake? Perhaps even more importantly, on what should you NOT spend time and effort?
We all know Drucker’s famous quote – culture eats strategy for breakfast. Most firms have a unique culture they consciously or unconsciously work to protect. It’s impossible to over-emphasize how important it is to align your firm’s vision for the future with that valued culture and not try to promote a CVP that is in conflict with who you truly are. Are you presenting yourself as a disruptive, tech-savvy firm while internally placing the greatest value on seniority, for example? If it comes to a battle, culture will win. Your clients may feel secure, but they are unlikely to see you as innovative.
A client value proposition can be translated into a meaningful and effective strategy only if you can realistically make it happen for your clients.
At Axiom Consulting Partners, we’ve designed a unique process to ensure your firm’s differentiation will pass all four tests of viability. We can help you develop and test a strategy that provides uniqueness and a competitive advantage, while leveraging the firm’s strengths and delivering high value to your clients.
The benefits of a good differentiation are well worth pursuing. We believe this is a great time for professional services firms to rethink their approach and set themselves up for the future. If you’re ready to understand what kind of differentiation would work best to move the needle on your company’s success, let’s chat.
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