Differentiation
Guide
for Professional
Services Firms
Second Edition
Differentiation Guide for Professional Services Firms, Second Edition
Copyright © 2018
Published by Hinge
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Reston, Virginia 20191
All rights reserved. Except as permitted under U.S. Copyright Act of 1976, no part of
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means, or stored in a database or retrieval system, without the prior written permission
of the publisher.
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Differentiation Guide
2
Table of Contents
4
Introduction
5
Chapter 1
Understanding Differentiation for Professional Services
10
Chapter 2
21 Ways of Looking at a Differentiator
15
Chapter 3
How to Find and Own Your Differentiators
20
Chapter 4
Real-World Differentiation Case Studies
25
Conclusion
26
About Hinge
Differentiation Guide
3
Introduction
Brand differentiation is one of the most poorly
understood pillars of professional services marketing. A
surprising number of executives and marketers believe
that it’s simply not possible to differentiate firms that
offer similar services to similar clientele. In fact, this
way of looking at the marketplace is the very reason
that differentiating your firm is essential.
Differentiation is not about being different for sake of being different. It’s about helping
your audience make smarter, easier, more confident buying decisions.
We wrote this guide to set the story straight. You not only can differentiate your firm
from competitors, you must do it if you want to attract the right clients and thrive in an
overcrowded marketplace. Here’s what you’ll learn:
•
Chapter 1 explains the concept of differentiation as it applies to professional
services firms and why it is so important.
•
Chapter 2 examines 21 ways that a firm might differentiate itself.
•
Chapter 3 steps you through a comprehensive differentiation process.
•
Chapter 4 explores four firms that have successfully differentiated themselves
and how they did it.
After finishing the guide, you will appreciate why differentiation matters, understand
how it works and know exactly what you need to do to set your firm apart from lookalike competitors in a way that is meaningful and compelling to your target audience.
Ready? Let’s get started.
Differentiation Guide
4
CHAPTER 1:
Understanding Differentiation for
Professional Services
Have you been competing for work that you are
more than qualified to perform, only to be underbid
by your competition? Or maybe you have been the
one underbidding, which leaves you with paper-thin
margins and stalled growth.
If you want to stop competing on price alone, it may be time to develop a stronger
differentiation strategy.
What Is Differentiation Strategy?
Differentiation strategy is a deliberate plan to make your firm stand out from
otherwise similar competitors in the marketplace. Usually, it involves highlighting a
meaningful difference between you and your competitors — a difference that your
potential clients would find valuable. A strong differentiator will provide a competitive
advantage for your firm.
Michael Porter, the famous strategist, maintains that there are only two ways to gain
a sustainable advantage over your competition. One way is to compete on price,
highlighting the similarities you share with your chief competition:
A strong
differentiator
will provide a
competitive
advantage for
your firm.
“We’re just as good as our competition, but we cost less.”
Unfortunately, unless you have a sustainable cost advantage, you can’t maintain this
strategy for long. All it takes is someone willing to undercut your lowest price. The
lowest-cost strategy also exposes you to commoditization and a much wider range of
competitors, including do-it-yourself options, off-shoring and automation.
Porter’s other way — a better way — is to stand apart. Be different. Separate yourself
from competitors in a manner that is both important and relevant to potential clients.
Using our definition above, this is a differentiation strategy.
A point of differentiation can be broad-based and set you apart from the rest of the
industry, or it can be narrower, appealing to a niche market. This latter approach is
often referred to as a focused or concentrated strategy.
Differentiation Guide
5
Differentiation Strategy Examples
Here’s an example of a broad differentiator: adopt a very different business model.
Suppose that hourly billing is widespread in your industry. Offering a pay-for-results
billing model, instead, would separate you from competitors.
Of course, developing a broad-based differentiation strategy, in which your firm
is substantially different from your industry as a whole, isn’t easy, especially for
established firms. And even if you were able to pull it off, what’s to keep a competitor
from copying your approach?
This is why many firms choose to compete with a focused strategy. In a focused
strategy, you narrow your appeal to a niche audience. Your established competitors —
most of which are broadly diversified — are unlikely to follow your lead.
For example, an accounting firm that works exclusively with chain restaurants has
a very compelling differentiator targeted squarely at that niche market segment.
However, a different audience segment, such as automobile dealers, would find no
value in working with the restaurant specialists. By being exclusive — not pursuing
clientele outside its narrow industry focus — a firm has a real opportunity to dominate
the niche they target.
Advantages of Differentiation
There are some big advantages to using a differentiation strategy. Here are some of the
benefits.
1.
You do not have to compete on price alone
Since you have distinguished yourself from your competitors the prospective
client cannot reduce their choice to the dimension of cost alone.
2.
You have greater appeal to your target audience
Since you are different (and, presumably, better), you become a more
appealing choice. This makes it easier to generate interest and close sales.
3.
There is no direct substitute
If you are demonstrably different from your competitors, you cannot be
directly compared to them. Instead, prospects have to focus on the qualitative
value of your difference. This adds value that other options lack.
4. You increase loyalty
The combination of greater value and the lack of comparable substitutes can
generate greater loyalty to your firm. There is no good reason to switch (if you
are delivering on your promise) and no comparable alternative to switch to.
5.
You can command higher fees
If your differentiation adds true value and is not available elsewhere, you
should be able to command higher fees. This is especially true if your
differentiator is based in specialized expertise.
Now, whether your strategy is broad or very focused it must always start by identifying
your firm’s differentiators. Let’s begin with a definition.
Differentiation Guide
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What Is a Differentiator?
A differentiator is something that makes your business both meaningfully different from
your competitors and more valuable in the eyes of your target audience. Differentiators
are the building blocks of a differentiation strategy.
But simply calling something a differentiator doesn’t make it so. First it must pass
three tests.
Three Tests of a Successful Differentiator
How do you know you have a good differentiator? We recommend you put each one to
the test. If it can pass these three critical checks, it is worth developing into a broader
differentiation strategy:
1.
Is it true?
Differentiators can’t be fabricated. Apart from the moral hazard of making
stuff up, it is simply too easy for people to see through exaggerated claims.
You’ll need to deliver on your promises.
For example, many firms say they have superior client service, but they do
nothing special to make it a reality. No special policies. No special training.
Nothing to ensure it actually happens. The bottom line is they are no different
than a slew of competitors that make the same claims.
2.
Is it relevant?
If your point of distinction doesn’t matter to your prospects, it won’t bring
you more business. In the end, what is most important is what plays into
your target prospects’ selection criteria and decision-making process. Any
irrelevant differentiators are wasted effort.
Differentiators are
the building blocks
of a differentiation
strategy.
We once had a lobbying client that believed their strongest differentiator was
their firm’s lack of conflicts of interest. Their competitors certainly could not
make the same claim. But, when we dug a bit deeper, we discovered that their
clients and prospects hardly valued impartiality at all. So much for a strong
brand differentiator.
In our research of professional services firms, we have found another reason
to reject client service as a differentiator — buyers don’t even consider it a
selection criterion. A lack of customer service may be a reason you lose a
client, but it rarely plays into the initial selection process. Unless a buyer has
been burned recently by poor service, it’s just not relevant to them yet.
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3.
Is it provable?
This is the often the toughest test of a differentiator. You may have identified a
true and relevant point of distinction, but without tangible proof it won’t stand
up to buyer scrutiny. Buyers have become inured to — and learned to ignore —
empty claims.
Here’s a differentiator candidate that we encounter again and again: “We have
great people.” It is a trap! Why? Well, have you ever heard a firm claim they
have average people? Didn’t think so.
But there are exceptions. One of our clients provides highly specialized
software development services — and they hire only PhD-level programmers.
They can actually support a “great people” differentiator with hard evidence.
The Challenges of Maintaining a Competitive
Advantage
Once you know what sets you apart from your competitors, you are well on your way to
a solid differentiation strategy. Especially if you can explain — and prove — it in a way
that is relevant to your target audience. But you are not done yet.
The marketplace doesn’t stand still. Shrewd competitors will notice your success
and attempt to copy it. Over time, what was once a distinctive characteristic may be
neutralized. Your competitive advantage will be lost.
To build a sustainable differentiation strategy you not only need to build your
reputation around distinctive characteristics, you need to make your expertise highly
visible to your target audience. This “Visible Expertise” will become the foundation of
your professional services brand1.
Why Visible Expertise Matters to Professional
Services Firms
This brings us to the topic of expertise and why it is so critical to professional services.
In the professional services, expertise is what you sell.
Clients aren’t buying your services because they like them. They are buying your
services to solve a business problem or seize an opportunity. For example, a company
may need help complying with a regulatory requirement or solving a critical strategic
challenge.
1
https://hingemarketing.com/blog/story/brand-building-for-professional-services-firms
Differentiation Guide
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Our research into professional services buyers2 describes what criteria companies
use to select one service provider over another. The most common selection criterion
is expertise, and it is the factor that most often tips the scale in favor of the contractwinning firm.
But what about the argument that professional services are “a relationship business”?
Well, that assumption is partially true. Good business relationships are certainly
helpful. As we describe in our book Inside the Buyer’s Brain3, both buyers and sellers of
professional services understand the importance of an existing relationship, but sellers
consistently underestimate the role their reputation plays in the final selection.
Also, a strong reputation for expertise is the one factor that can overcome an existing
relationship. If a company does not believe their current provider can solve a problem,
they will look for a firm that can.
According to our most recent study of referral marketing4, visible expertise plays
the single most significant role in driving referrals. Relationships — both social and
professional — are still important, but only when there is an awareness of your
expertise.
2
https://hingemarketing.com/library/article/inside-the-buyers-brain-second-edition-executive-summary
3
https://hingemarketing.com/library/article/book-inside-the-buyers-brain
4
https://hingemarketing.com/library/article/referral-marketing-study
Differentiation Guide
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CHAPTER 2:
21 Ways of Looking at a Differentiator
As we’ve seen, finding a differentiator for your
professional services firm is not easy. Many
firms struggle mightily, only to come up with a
“differentiator” that doesn’t differentiate them at all.
But take heart — there are many ways to successfully differentiate a brand. In this
chapter, we’ve compiled 21 strategies that work for many professional services firms.
Remember, you can have more than one differentiator. In fact, differentiators can often
be combined to create a more powerful competitive advantage.
1.
Specialize in an industry.
This is perhaps the easiest and most successful differentiator for a firm to
adopt. Clients value firms that specialize in their industry — they perceive
specialists as more experienced and skillful at solving their problems. But be
careful. If you try to specialize in too many industries, you will lose credibility.
On the other hand, if you specialize in a single industry you could be
vulnerable to its economic cycles.
2.
Specialize in serving a specific role within your client’s organization.
This role-based specialization is also quite successful, especially if combined
with an industry focus. If you head IT at a law firm, it’s comforting to know that
your service provider specializes in helping people just like you.
3.
Specialize in offering a particular service.
This approach can also be quite successful, especially if the service you
specialize in is rare. But beware, unique service offerings can quickly become
mainstream. Your success may be noticed and copied by others.
There are
many ways to
successfully
differentiate a
brand.
4. Offer a truly unique technology or process.
By truly unique, we mean a process that approaches the problem in an
entirely new way and offers a unique benefit to the client. Most “proprietary
methodologies” fall well short of this standard.
Differentiation Guide
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5.
Focus on understanding a particular target audience.
A key differentiator for some firms is their in-depth understanding of a specific
audience. For example, your firm might specialize in marketing to Baby
Boomer women, and your clients might be retirement planners, insurance
companies, and clothing retailers.
6. Specialize in serving clients of a certain size.
This is a common differentiator, although some people don’t think of it as one.
For instance, some firms work exclusively with the largest companies in the
world. Contrast that with a firm that focuses on solo practitioners. Either firm
could have a competitive advantage over a firm that serves clients of all sizes.
7.
All of your staff shares a specific characteristic or credential.
Almost every firm believes it has a great team, so it can be tough to make the
quality of your people stick as a differentiator. Buyers hear this claim so often,
it’s become background noise. But if you hire people with rare or exceptional
qualifications (think top consulting firms like McKinsey or Booz Allen that
vacuum up Ivy League grads like crumbs), you can still make a good case for it.
8. Specialize in clients that share a common characteristic.
This differentiator focuses on a client characteristic rather than an industry or
role. Let’s say you provide accounting and tax services for expatriates. They
might come from any country, industry or corporate role, yet you will have a
competitive advantage over firms that don’t serve that niche market.
9.
Focus on solving a specific business challenge.
In this case, the spotlight is on the nature of the business challenge your
clients are facing. Their challenge must be common enough that the market
can support your revenue goals, but difficult to solve without specialized skills
and experience. An example might be a firm that helps businesses secure their
first government contract.
10. Have one or more individuals who are high visibility experts in their fields.
To have one of the country’s top experts in your specialty on your team can be
a very powerful competitive advantage. Many firms’ reputations are built on
this differentiator alone. Add multiple high visibility experts and you will have
a compelling and exceptionally valuable brand.
A unique business
model can be both
meaningful and
easy to prove.
11. Offer a unique business model.
Suppose everyone in your profession bills by the hour, but you offer services
for a fixed fee. Voilà, a perfect differentiator is born! A unique business model
can be both meaningful and easy to prove. But be watchful. If it works well,
you are likely to accumulate imitators.
12. Have a specific geographic focus.
This time-honored differentiator is losing some of its punch today, as
technology makes geography less important. But it can still work when clients
value local knowledge or face-to-face interaction.
Differentiation Guide
11
13. Offer access to a unique set of information not available elsewhere.
Sometimes, access to certain information can be very valuable to potential
clients. Do you have a dataset (for example, benchmarking data) that no
one else possesses? Some firms have built very valuable practices around
proprietary data that is not easily duplicated.
14. Offer a unique set of contacts or relationships not easily accessible.
While the previous differentiator focused on information, this one features
relationships. Public relations firms have long used relationships with reporters
and editors as differentiators. Lobbying firms have powerful government
contacts. What valuable relationships can your firm bring to the table?
15. Do business with a truly distinctive level of service.
Every client expects you to deliver good client service. But to be a
differentiator, your service must be truly exceptional. Delivering service at
this level is not easy, and to rise above the noise — that cacophony of firms
that say they provide great customer service — you’ll need solid evidence to
prove it.
16. Distinguish yourself by the clients you have.
Having an impressive client list is a plus for many firms. But what if you take
it further? Some firms differentiate themselves based on their client list. For
example, if your firm serves the higher education market and your clients
include Harvard, Yale and Stanford, you have a differentiator.
17. Focus on the size of your firm.
We are the largest ___________________ (fill in the blank). Size sends a strong
signal that you are doing something right. And when you can combine size
with a specialization, you communicate both relevance (the specialty) and
success (the largest). Find your niche and dominate it.
18. Emphasize your relationship with a parent firm or partner.
Being bound in a close relationship with a parent firm can be a limiter (for
example, if you are owned by a large software firm, some potential clients may
feel like you can’t be objective about other companies’ technologies). But for
other prospective clients, it can be a big asset (who knows the ins and outs of
your parent company’s technology better than you?). This same differentiator
can also be applied to situations where your firm is a value-added partner
rather than a subsidiary. Just be careful that you don’t enter a space that is
crowded with competitors who tout the same relationship.
19. Focus on a notable signature accomplishment.
Some firms can build a strong brand upon a notable accomplishment. Firms
that invented a technology or solved a highly visible problem for a high-profile
client are good examples. For instance, back in the 1960s, RS&H, a Floridabased engineering firm, designed the launchpad for the Apollo space missions.
Since then, they have parlayed that iconic project into a broad range of civil
engineering work across the nation and the globe.
Differentiation Guide
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20. Specialize in producing a unique or very valuable result.
Much like number 9 above, in which you address a notable business challenge,
this differentiator focuses on producing a valuable result. The key difference
is that you may need to overcome multiple business challenges to achieve it.
For example, you might specialize in turning average growth clients into high
growth firms. Getting there, however, might require overcoming more than one
challenge — such as positioning the firm, selecting the right mix of services
and increasing the visibility of the business.
21. Look or act differently than all of your competitors.
Most professional services firms tend to look and act a lot like their
competitors. That means developing a very different look or brand personality
can be a powerful differentiator. Combine this with other differentiators and
you have the makings of a robust competitive advantage.
Any of these 21 strategies can meet the three criteria that every differentiator must
clear — and they can be used in combination to further distinguish a firm. In the next
section, we’ll detail not only how to identify appropriate differentiators for your firm,
but how to own them.
Look or act
differently
than all of your
competitors.
Differentiation Guide
13
ONLINE MASTER CLASS
Find Your Competitive Advantage:
Differentiation, Positioning & Messaging
Lack of differentiation is one of the toughest challenges firm
stakeholders and marketers struggle with today. In this online course,
you’ll learn how to uncover your firm’s true differentiators so that you
can give buyers a reason to pick you out of the crowd and choose you.
Hinge’s Managing Partner, Lee Frederiksen will walk you through the
process, step by step. You can even work through your own firm’s
differentiation and positioning as you go.
What You’ll Learn:
•
How to find out what your clients, prospects and staff really
think about your firm
•
How to research your competitors
•
How to mine your research for true differentiators
•
How to write an effective positioning statement
•
How to develop your elevator pitch
•
How to develop useful messaging for business development
and marketing
•
How to put all of these tools to use and start building a
compelling competitive advantage
Learn More and Register
Differentiation Guide
14
CHAPTER 3:
How to Find and Own Your
Differentiators
When firms decide to identify their differentiators, the
story tends to take a certain predictable trajectory. Stop
me if you’ve heard this one before...
Everyone sits down around the conference table and shares their thoughts on the
big question: How are we different from our competition? At some point during
the meeting, a brave soul might even broach the question’s scarier, often-unspoken
corollary: Are we different?
After a lot of back and forth, most firms end up with variations on a handful of old
standbys: “We care about our clients.” “We do quality work.” “We have better people.”
Sound familiar?
The Wrong Approach
At the end of such a meeting, a leadership team comes away imagining that they’ve
isolated their differentiators. But they haven’t. Instead, they’ve left with something very
different, the false comfort that comes from fitting in — and sounding just like their
competitors.
We often assume
our competitors
know something
we don’t, and we
model ourselves
accordingly.
That mentality
compels us to
embrace false
differentiators.
Consciously or unconsciously, we often assume our competitors know something we
don’t, and we model ourselves accordingly. That mentality compels us to embrace false
differentiators. In most cases, you’re not going to find your differentiators around your
conference room table.
Differentiation Guide
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A Better Approach
So how do you find them? And once you’ve identified your differentiators, what’s next?
The five steps below will help you uncover a real differentiator for your firm—and show
you how to own it.
1.
Choose an approach to differentiation.
There are two basic ways to look for differentiators:
1.
Make a conscious management decision that differentiates your firm
from the competition. Put another way, you decide how you will be
different.
2.
Uncover characteristics of your firm that distinguish you from similar
competitors. In this approach, you discover your differences rather
than create them.
Both paths are legitimate and, when implemented correctly, can be effective.
The first approach is more proactive. It can require courage and leadership,
and it often means making significant changes to the nature and direction of
your business. Two situations can drive you to this approach: 1) your firm has
no inherent differentiators of any consequence; or 2) you see an opportunity in
the marketplace that your firm, if it were to change, could fill.
The second approach is more passive, relatively speaking. Nevertheless, it can
yield positive benefits to firms that aren’t interested in dramatically changing
direction. Some firms have natural, easy-to-recognize differentiators that just
need to be coaxed out into the open. Other firms have to work a bit harder to
pick out their differences and use them to tell a compelling story.
Now, you don’t have to pick which direction to take from the start. You can
keep your options open because the path forward for both approaches is the
same: research.
2.
Use research to assess possible differentiators.
Whether you’re considering taking your firm in a new direction or trying to
identify your existing differentiators, you’re going to want to conduct research
on your firm and your marketplace. Why? Time and time again, we’ve seen
that firms misperceive their audiences’ priorities, their firm’s relevance to
client needs and which market rivals they actually compete against.
In fact, our extensive studies on the topic have shown just how widespread
the “perception gap” problem is. Research equips you with facts instead of
hunches.
If you’re exploring a change in your business’ direction, research can help
you select the right specialty. You can learn a lot about your success with
different types of clients. For example, if you find you have particular success
with smaller clients, that could point to a size-based focus — and an effective
differentiator. Or you might find that your firm is ideally suited to address a
Differentiation Guide
16
particular industry, emerging issue, business model or unmet need.
Research is your ear to the ground, helping you objectively evaluate
opportunities for differentiation.
What about the “discovery” approach? This requires marketplace research
on your clients, influencers and prospects to understand how your firm is
perceived. Is there anything you do that strikes these audiences as different,
unique or particularly valuable? Research holds the answers.
Your clients and prospects may identify a feature of your firm that you
don’t recognize or appreciate. For example, research may reveal that you’re
unusually focused on return on investment, while your competitors don’t score
well on that metric. ROI, then, could be a power differentiator and a focus for
your messaging.
Or perhaps you’ve configured your services in an unusual way — say, offering
subscriptions in an industry that typically charges by the hour — but you never
realized that was something your clients cared about. Research will help you
see yourself as the marketplace sees you and understand what your buyers
value most.
3.
Research is your
ear to the ground,
helping you
objectively evaluate
opportunities for
differentiation.
Identify the differentiators you want to pursue.
Once you’ve been through the research process and uncovered some potential
differentiators, it’s time to choose the ones that will define your firm in
the marketplace. Using the 21 ways to differentiate your firm in Chapter 2,
consider whether your differentiators are strong enough to stand alone or
whether it makes sense to combine some of them to concentrate their impact.
For example, suppose you had identified these two differentiator candidates:
We are a hundred-year-old accounting firm.
We focus on the greater Chicago area.
Individually, these points feel a little weak. But when you combine them into
one, you sharpen the point and produce a far more powerful differentiator:
We are the oldest accounting firm in Chicago.
Keep in mind that whenever you emphasize a characteristic of your firm or
take a specific direction you sacrifice something, too. Every differentiator
has a downside as well as an upside. If you choose to focus on serving small
businesses, you reduce your opportunities with larger companies. But focus is
power. You do it because the credibility you gain among your target audience
will more than make up for the lost potential elsewhere.
When evaluating possible differentiators, consider the pros and cons, what
kind of firm you want to be, and where opportunity and true distinction lie.
Then select your differentiators accordingly.
Differentiation Guide
17
4. Validate them with the marketplace.
Remember, the differentiators you choose need to be true, relevant to your
audience and provable. Once you’ve identified your differentiators — either
the existing qualities you mean to emphasize or those that you’re setting out
to claim through a new direction for your business — it’s important to validate
them with the marketplace.
Suppose you’ve identified an unmet need in the marketplace and you believe
you’re well-suited to meet it. Great! If you’re planning to turn your firm’s
attention and resources toward this new offering, however, you’ll want
to verify that it’s relevant and that you can carry it out. How? There are a
couple of ways you might tackle the question. You might conduct additional
marketplace research, or you might test-drive the approach on a small scale
before you commit substantial resources to it.
Similarly, once you’ve identified an idea that positions
your firm as different, you may need to conduct additional
research to ensure that you can back up the claim
effectively. Evaluate your proposed differentiators to see
whether any competitors are taking a similar tack. And
double check that what you’ve identified can be supported
with evidence.
5.
Live your differentiators.
Planning, of course, is only the first step. Once you’ve validated your
differentiators, it’s time to fully embrace them.
Now, bear in mind that some differentiators are easier to prove than others. If
you say, “we work exclusively with female entrepreneurs,” audiences will know
pretty quickly whether or not you can back that up.
Other differentiating claims, such as “our customer service is clearly superior
to the competition’s,” might require more work to support. For these broader
differentiators, you’ll need more than testimonials to support your proposition
— you might need a thorough study or a well-known third-party endorsement
(such as a prominent award) to validate your claim. In addition, you will need
to back it up with policies and training to make it real and lasting.
To have any impact on the marketplace, your differentiators must be
clearly communicated. So make sure that your website and marketing
materials describe and prove your differentiators. And train everyone who
communicates with the outside world to talk about your differentiators
whenever appropriate. After all, invisible differentiators aren’t going to do you
much good.
Invisible
differentiators
aren’t going to do
you much good.
Differentiation Guide
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The Bottom Line
Your differentiators aren’t abstract ideas. They define your firm. A differentiator is a
guiding imperative, one that affects the way you think and the decisions you make.
That means you have to live your differentiators every day — to work and act in ways
that are consistent with what you stand for. This process is continuous, and if you do it
well, it can drive you to new levels of success.
In the following chapter, we take a look at four professional services firms that have
done just that.
Hinge: Your Expert Guide to a Powerful
New Market Positioning
True differentiation takes courage. At Hinge, we’ve spent the
last decade perfecting a process that avoids the internal politics
that can dilute a powerful strategy. We use research data and
fact-based reasoning to overcome objections, build buy-in and
establish critical momentum.
Hinge has helped hundreds of professional services firms uncover
their differentiators and turn them into positioning that truly
separates them from their competitors. And we can do the same
for your firm.
Ready to take the next step?
Request a Free Consultation Today
Differentiation Guide
19
CHAPTER 4:
Real-World Differentiation Case Studies
Up to this point, we’ve explored why differentiation
works and how your firm can take advantage of it. Yet
you may still be wondering, “will this work for my firm?”
To help you understand how the abstract idea of differentiation plays out in the real
world, we’ve put together the following four case stories from Hinge’s client portfolio.
In some cases, we stepped the firms through the differentiation process from start to
finish. In other cases, they came to us with a differentiator but no clear strategy to turn
it into market success.
No matter the size of your firm, differentiation can dramatically influence the way you
are perceived and valued in the marketplace. These stories show how good ideas, well
executed, can change a company’s fortunes.
These stories show
how good ideas,
well executed,
can change
a company’s
fortunes.
Differentiation Guide
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Case Study 1:
How a Practice Area Specialization
Created a Dominant Leadership
Position
Walsh Colucci Lubeley & Walsh, a full-service law firm
based in Arlington, Virginia, had a special expertise in
zoning and land use law. A larger firm that had dominated
that area of expertise had recently disbanded, so an opportunity had emerged in the
marketplace.
After conducting client and market research, Hinge urged Walsh Colucci to seize
this opportunity and aggressively pursue a niche market in commercial real estate
development law. They repositioned themselves as “The Land Lawyers”, adopting this
phrase as their tagline and purchasing the website domain thelandlawyers.com (they
did not change their firm name, however). Finally, the firm reconceived their entire
identity — from logo and marketing collateral to messaging — to support this new
positioning. They went all in.
In a relatively short time, Walsh Colucci became Northern Virginia’s undisputed leader
in its category, and the firm has steadily grown its business and reputation ever since.
Walsh Colucci
became Northern
Virginia’s
undisputed leader.
What about the firm’s other practices? Walsh Colucci’s business transactions, litigation
and estate planning services continue to live on. While these practices operate in
the shadow of the firm’s commercial real estate services, the partners who manage
them seek out their own clientele and continue to build their book of business. These
services may no longer be primary revenue generators for the firm, but the decision to
keep them allowed the firm’s transformation to move forward without creating internal
political paralysis.
Key differentiators:
•
Specialization in commercial real estate development law
•
Positioning in Northern Virginia as The Land Lawyers
Differentiation Guide
21
Case Study 2:
How Specialized Knowledge and a
Niche Focus Created a Compelling
Advantage
As today’s colleges and universities compete for the
hearts and minds of students, they have to invest heavily
in upgrading their facilities and campus amenities. This
delicate dance has huge, potentially existential implications on these schools. If they
invest recklessly, they could face crushing, unanticipated future maintenance costs. If
schools underinvest, however, they may miss their enrollment and revenue targets.
Sightlines, a consulting firm of engineers and data scientists, helps higher education
institutions make smarter decisions, finding the right balance between building new
facilities, demolishing obsolete structures and making efficient use of the ones they
have. By specializing in the higher-ed market (as well as a small number of private
secondary schools), the firm was quickly able to build visibility across the US and
Canada.
By specializing
in the higher-ed
market, the firm
was quickly able
to build visibility
across the US and
Canada.
But their industry focus is only part of the Sightlines story. They also developed
a proprietary database and benchmarking tool that they make available to every
member. This tool tracks how other institutions handle their facilities investments. The
database covers over $13 billion in capital and operations budgets, 1.5 billion square
feet of facilities space and over 52,000 campus buildings. No competitor has anything
like it. Using this tool, members can compare their approach to facilities management
to hundreds of other schools.
Today, Sightline’s members include several of the Ivy’s, the University of California
system, Duke University and hundreds of other schools and university systems small and
large. Their leaders are quoted regularly in the press, including The New York Times, The
Washington Post, The Atlantic and The Wall Street Journal. And each year, they publish a
State of Facilities report that describes the current outlook and how institutions should
respond to changing conditions. Sightlines’ success also caught the attention of Gordian,
a construction data, software and services company, who acquired the firm in 2015.
Key differentiators:
•
Focus on higher education
•
Proprietary database and benchmarking tool
•
Membership model
•
Thought leaders in the industry
Differentiation Guide
22
Case Study 3:
How a Firm Grew its Revenue by
Narrowing its Focus
Like most accounting firms, Dallas-based Lester + Company
began its life serving clientele of every stripe. But its founder
and president, Andrew Lester, knew that he could get more
market traction, faster if he specialized.
So Lester looked at his current clientele and chose to dramatically narrow his target
audience to the market he served best: restaurants. He then sharpened his focus
even further: restaurants with multiple locations. Nobody else was serving this ultraniche audience. But why did he believe these restaurants would find his specialization
compelling?
Lester’s confidence came from a cloud-based financial management system his firm
provides to his clients — software that gives multi-location retail businesses powerful
tools to monitor the financial health of their far-flung operations in real time. Now,
owners would be able to check on the performance of one or more locations from any
computer — and address emerging problems quickly.
“We’ve grown from
a small, singleowner firm into
one with a regional
presence.”
In the first year alone, Lester’s business grew by more than a third, and it has continued
on this trajectory ever since: “We’ve grown from a small, single-owner firm into one
with a regional presence.”
Key differentiators:
•
Very narrow focus on multi-location restaurants
•
Financial software that makes managing multiple locations
easier
Differentiation Guide
23
Case Study 4:
How a Disruptive New Business Model
Delivers a Distinct Advantage
Summit Executive Resources came to us with an idea. They
wanted to reinvent executive search and introduce a new,
innovative business model that would turn retained search
on its head. In the traditional model, a company hires a
search firm to find suitable candidates to fill their leadership
vacancies. Summit, however, decided to represent C-level executives directly, much like
a high-end professional sports agent.
The advantage to executives — and the reason they are willing to pay for this service
— is two-fold: high-touch client service and much faster placement times. Where
traditional executive search firms spend little time with their job candidates, Summit
goes to great lengths to advise and coach its clients. After the interview Summit will
even step in to negotiate and close the deal. As a result, Summit is able to place a
candidate in less than half the time, and at a company that is well matched to the
executive’s personality and skills.
“The visibility we
thought would
take months
to accomplish
happened almost
overnight.”
Of course, hiring companies appreciate speed and a good fit, too. And the service costs
them nothing!
In the beginning, the Summit worked only with technology executives. This focus gave
the startup a small enough playground to get noticed and start building a reputation.
As it found success, the firm began opening up its services to more industries,
including private equity and venture capital firms.
A well-conceived differentiation and positioning strategy made all the difference.
According to Summit’s President and CEO, Melissa Henderson, “The visibility we
thought would take months to accomplish happened almost overnight.”
Key differentiators:
•
Disruptive new business model
•
Initial focus on single industry to build visibility and momentum
•
Ideal solution for private equity and venture capital firms
that need fast, reliable access to leadership for their portfolio
companies
Differentiation Guide
24
Conclusion
There is an urgent need to differentiate
today’s professional services firms. From the
buyer’s perspective, most service providers are
indistinguishable from one another, so buyers are
very receptive to signals that indicate one firm is more
qualified to solve their problem than others.
From the seller’s point of view, the competition is fierce, and relying on networking and
the referrals of former clients to fuel long-term growth is hardly a winning strategy.
What both sides desperately need is difference among professional services providers.
But variety alone isn’t sufficient. That difference has to be strategic and fill a need
that resonates with certain buyers. While differentiation can assume many
guises (see Chapter 2), from niche specialization to a new business model to
thought leadership, these strategies share one thing in common: sacrifice.
When you differentiate your firm, you — by definition — have to let
something go. So say goodbye to serving up a full range of services to a full
range of audiences. That’s the rampant non-strategy that created this mess in
the first place.
But you may ask, what about those global giants that do it all (hello, Big
4)? In fact, their size and leadership status are their differentiators. These
firms may not be specialized, but they are often the default choice — and
automatic short-listers — in the minds of your prospects. Trying to beat these
Goliaths at their own game is simply not going to work. What you need is an
advantage.
And differentiation is your pebble and sling. Now take your best shot.
– The Hinge Team
Differentiation Guide
25
About Hinge
Hinge specializes in branding and marketing for professional services firms. We are a
leader in helping firms grow faster and maximize value.
Our comprehensive offerings include research and strategy, brand building, awardwinning creative, high-performance websites and marketing outsourcing. And at
Hinge University, your team can learn all the marketing skills and strategies they
need to take your firm to a higher level of performance.
In addition, Hinge conducts groundbreaking research on professional service
companies. We have identified a group of firms that grow 9X faster and are 50%
more profitable yet spend less than average to get new business. We can show you
how they do it and implement their strategies in your firm.
To view our full library of research reports, whitepapers, webinars and articles,
please visit www.hingemarketing.com/library.
www.hingemarketing.com
703 391 8870
1851 Alexander Bell Drive, Suite 350
Reston, VA 22191
Help us make this guide even better.
We want to hear from you. If you have any suggestions to improve this resource,
please drop us a line: info@hingemarketing.com.
Thank you!
Differentiation Guide
26
How We Can Help
Visible Firm® Program
Designed to deliver more referrals, higher profits and faster growth, the
Visible Firm® Program will build a powerful marketing platform to engage
your audiences and build your visibility. Based on the most extensive research
into high-growth firms ever conducted, the Visible Firm® Program will ground
your marketing in science and leverage your firm’s expertise to draw in the
right audiences.
Branding Program
Our Branding Program is designed to carry your firm’s reputation confidently
into the marketplace by giving you a suite of powerful branding tools.
Based on extensive research and analysis, our branding strategies increase
your firm’s credibility and visibility in your industry. The services will also
differentiate your firm and provide clear, compelling messages for each of
your target audiences.
To find out how Hinge can help
your professional services
firm experience faster growth,
contact us!
Hinge
1851 Alexander Bell Drive
Suite 350
Reston, VA 20191
703 391 8870
info@hingemarketing.com
High-Performance Website Program
The High-Performance Website Program makes your website into a leadgenerating machine — bundling a gorgeous new design with a suite of
powerful online tools. Designed from the ground up to attract the right visitors
from search engines, a high performance site uses educational content, smart
offers, and custom features to engage and convert qualified leads.
Visible Expert® Program
Designed to help individuals cultivate an authoritative online presence in their
area of expertise, the Visible Expert® Program delivers the tools and strategy
required to build personal reputation and visibility in the marketplace. Based
on extensive research, the Visible Expert® Program helps experts become
recognized industry leaders.
For more information, call 703 391 8870 or email us at info@hingemarketing.com.
Differentiation Guide
27
ONLINE MASTER CLASS
Find Your Competitive Advantage:
Differentiation, Positioning & Messaging
Lack of differentiation is one of the toughest challenges firm
stakeholders and marketers struggle with today. In this online course,
you’ll learn how to uncover your firm’s true differentiators so that you
can give buyers a reason to pick you out of the crowd and choose you.
Hinge’s Managing Partner, Lee Frederiksen will walk you through the
process, step by step. You can even work through your own firm’s
differentiation and positioning as you go.
What You’ll Learn:
•
How to find out what your clients, prospects and staff really
think about your firm
•
How to research your competitors
•
How to mine your research for true differentiators
•
How to write an effective positioning statement
•
How to develop your elevator pitch
•
How to develop useful messaging for business development
and marketing
•
How to put all of these tools to use and start building a
compelling competitive advantage
Learn More and Register
Differentiation Guide
28
FLORIDA INTERNATIONAL UNIVERSITY
College of Engineering and Computing
Department of Construction Management
BCN 5771 Management & Marketing of Construction Services
Fall Term 2020
Online Classes No. RVC RXD 1201
March 16th – 22nd : Course Introduction Marketing, Sales and Business Development
MARKENDIUM - The SMPS Body of Knowledge - Domain 3
Lecture Topics: Creating Market Differentiation
Professor Jose Cortes
954-240-7996
BCN 5771 Management
and Marketing of Construction Services
Class Material
Tasks for this week
•
•
•
•
Domain 3: Client and
Business Development:
MARKENDIUM:
SMPS Body of Knowledge
(Volume 3)
Differentiation Guide for
Professional Services Firm
Hinge University
https://hingemarketing.com/
blog
•
•
Read Domain 3: Client and Business Book
chapters 7-8 (Pages 76 to 91)
Review Creating Market Differentiation
material slides for this week.
Review Differentiation Guide for
Professional Services Firm and use
material information to complete
Assignment 3.
Nicole Heran Project Executive, Invited
Speaker
Assignment #3 – Creating
Differentiation Due Date March 22nd @
11:59 PM Via Canvas
Discussion Group Scheduled on
Wednesday, March 18th 7:00PM
https://fiu.zoom.us/j/605182603
Week 11 Discussion Group 3-18-2020 @ 7:00 PM
Topic: BCN 5771 Management & Marketing of Construction Services
Time: March 18th, 2020 07:00 PM Eastern Time (US and Canada)
Click link below to Join Zoom Meeting
https://fiu.zoom.us/j/605182603
Dial by your location
+1 646 876 9923 US (New York)
Meeting ID: 605 182 603
One tap mobile
6699006833,, 605182603#
Assignment #3 – Creating Differentiation
Due Date March 22nd @ 11:59 PM Via Canvas
Assignment Instructions:
After reviewing the class material and
Differentiation Guide please answer the
following questions.
1) What is differentiation and why is it so
important in today’s competitive market?
2) Why is important to test our differentiators?
Name 3 of the most common challenges
companies face when developing their
differentiator.
3) In looking Chapter 2: 21 Ways of Looking at a
Differentiator. Pick the top 2 that got your
attention and explain why?
4) How does the Differentiation Analysis
Framework benefits your differentiation
strategy. Name a minimum of 3 reasons and
why?
5) What companies can do in building a long-term
sustainable differentiation strategy?
Invited Speaker Nicole Heran
An example of a
successful
Doer Seller !!!
Project Executive
nicole.heran@Skanska.com
561-814-8364
Building for a Better Society…
Winning Business Development Process
Market Analysis
Initial Contact
Proposal Mgt.
Lessons Learned
Resource Analysis
Relationship Mgt.
Presentation
Follow-up/Debrief
Strategic Planning
Perception Mgt.
Negotiation
Business Planning
Information Mgt.
Contracting
Behavioral
Differentiation
Account Planning
Opportunity Mgt.
Branding/Image
Mgt.
Pursuit Mgt.
Condition the
Market
Condition the
Client
Condition the
Deal
70%
20%
10%
Customer Delight Mgt.
Ongoing Improvement
Repositioning
Capture Mgt.
Condition
the Future
How do we drive…
Differentiation
What Is a Differentiator? A differentiator is something that makes your
business both meaningfully different from your competitors and more
valuable in the eyes of your target audience.
Differentiators are the building blocks of a differentiation strategy
Advantages of Differentiation
You do not have to compete on price alone
Since you have distinguished yourself from your competitors the prospective
client cannot reduce their choice to the dimension of cost alone.
You have greater appeal to your target audience
Since you are different (and, presumably, better), you become a more appealing
choice. This makes it easier to generate interest and close sales.
There is no direct substitute
If you are demonstrably different from your competitors, you cannot be directly
compared to them. Instead, prospects have to focus on the qualitative value of
your difference. This adds value that other options lack.
You increase loyalty
The combination of greater value and the lack of comparable substitutes can
generate greater loyalty to your firm. There is no good reason to switch (if you
are delivering on your promise) and no comparable alternative to switch to.
You can command higher fees
If your differentiation adds true value and is not available
elsewhere, you should be able to command higher fees. This is
especially true if your differentiator is based in specialized
expertise.
Differentiation Analysis
Customer Need
Added Value
21 Ways of Looking at a Differentiator
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
Specialize in an industry
Focus on the size of your firm
Offer a unique business model
Have a specific geographic focus
Specialize in offering a particular service
Offer a truly unique technology or process
Distinguish yourself by the clients you have
Specialize in serving clients of a certain size
Focus on a notable signature accomplishment
Focus on solving a specific business challenge
Look or act differently than all of your competitors
Do business with a truly distinctive level of service
Focus on understanding a particular target audience
Look or act differently
Specialize in producing a unique or very valuable result
than all of your
Specialize in clients that share a common characteristic
competitors
Emphasize your relationship with a parent firm or partner
All of your staff shares a specific characteristic or credential
Offer access to a unique set of information not available elsewhere
Specialize in serving a specific role within your client’s organization
Offer a unique set of contacts or relationships not easily accessible
Have one or more individuals who are high visibility experts in their fields
Types of Differentiation
The thing or things that the solution
does that no other solution does.
Unique
Differentiation
An organization’s
partner ecosystem
provides the
differentiation by
building out a complete
solution.
Several competitors have
addressed a challenge with
different approaches and the
merits of each approach can
be debated.
Invisible differentiators aren’t going to do you much good
Three Tests of Differentiators
1. Is it true?
Differentiators can’t be fabricated. Apart from the moral hazard of making stuff up, it is
simply too easy for people to see through exaggerated claims. You’ll need to deliver on
your promises. For example, many firms say they have superior client service, but they do
nothing special to make it a reality. No special policies. No special training. Nothing to
ensure it actually happens. The bottom line is they are no different than a slew of
competitors that make the same claims.
2. Is it relevant?
If your point of distinction doesn’t matter to your prospects,
it won’t bring you more business. In the end, what is most
important is what plays into your target prospects’ selection
criteria and decision-making process. Any irrelevant
differentiators are wasted effort.
3. Is it provable?
This is the often the toughest test of a differentiator. You
may have identified a true and relevant point of distinction,
but without tangible proof it won’t stand up to buyer scrutiny.
Buyers have become inured to — and learned to ignore —
empty claims.
A strong differentiator will provide a competitive advantage for your firm
Differentiation Analysis Framework
Customer’s
Needs
Our
Strengths
X
STRATEGY
Competitors
Weaknesses
X
Sweet Spot
STRATEGY
Differentiation Analysis Framework
Sour Spot
Our
Weaknesses
Their
Strengths
Customer’s
Needs
Sweet
Spot
Vs
Sour Spot
Differentiation Analysis Framework
Sour Spot
Our
Weaknesses
STRATEGY
Customer’s Needs
Our
Strengths
STRATEGY
Their
Strengths
STRATEGY
Their
Weaknesses
Sweet Spot
STRATEGY
Differentiation Analysis
Sour Spot
• Mitigate Our
Weaknesses
Our
Weaknesses
STRATEGY
• Highlight Our
Strengths
Customer’s Needs
Our
Strengths
STRATEGY
Their
Strengths
STRATEGY
Their
Weaknesses
Sweet Spot
• Neutralize
Their
Strengths
• Ghost Their
Weaknesses
STRATEGY
Ghosting your Competitors Weaknesses
Without naming them
Competitor Ghosting
Exploiting weaknesses in your competitors approach, or ghosting
is a subtle method of casting doubt in the minds of the evaluators
over the solutions, approaches and track records of competitors,
without naming them.
Finding your Own Differentiators
1.Choose an approach to
differentiation
2.Use research to assess
possible differentiators
3.Identify the differentiators you
want to pursue
4.Validate them with the
marketplace
5.Live your differentiators
There is an urgent need to
differentiate today’s professional
services firms. From the buyer’s
perspective, most service
providers are indistinguishable
from one another, so buyers are
very receptive to signals that
indicate one firm is more qualified
to solve their problem than others.
Purchase answer to see full
attachment