Why position your company to a narrow audience?
Do you understand the benefits of specialising?
"Owning a word in the mind" is actually a more elegant way of saying that positioning is the process of gaining a leadership position in a specific market segment or category.Positioning was very simply and elegantly defined by Al Reis and Jack Trout as "owning a word in the mind".
Why position your company? Simple; better clients, provide greater value, get better fees. Positioning is not something you do for its own sake. Instead, it's a powerful tool you can use to:
- Lower the cost of acquiring a client(CAC)
- Increase your ability to be selective about clients you work with
- Increase profitability
Positioning does two important things:
1. It increases the business value o fthe services you deliver.
2. It meaningfully differentiates you from the alternatives to
If you are a generalist, a jack of all trades, accept any clients then you run the risk of operating from a position of weakness. Do you almost never say no to work?
If you're not in this situation because you've already focused your business on a great market position or have found some other way to charge premium rates and develop a strong pipeline of interesting and challenging work then congratulations!
Positioning your business is working out exactly who you serve, what you do for them, and how you are different from others doing similar work. When your target is that broad, that's a lot of competition, as I'm sure you know from direct experience. Furthermore, you have no "unfair advantage" over that competition, and you depend fundamentally on luck or an extraordinarily helpful professional network to bring you in contact with clients who are a great fit for you.Yet, if you focus on a narrow market position, the game changes completely.
Moving from operating as a generalist, "A to Z", or "full service" firm to operating as a focused specialist will almost certainly cause you to fear that:
- You have chosen the wrong thing to focus on
- You are not worthy of commanding premium rates for your work
- You are cutting off access to desirable, profitable work
- You will quickly become bored with your choice
When you position your company narrowly at your ideal customers:
- You can very quickly have a list of prospective clients. Not just a list of types of companies that could be your clients but a list of specific companies with names of specific people you can market to, meet with, and build a robust business from.
- Your value proposition to that list of prospects stands out
- Operating as a focused specialist gives you access to dramatically higher rates or the ability to apply value-based fees to projects because you are solving an expensive problem.
- A focused specialist can say no to a good portion of the clients that come their way if necessary. Quality of work life goes up dramatically as a result of the ability to throughly vet prospects based on what really will produce a good fit for both client and consultant.
Properly positioning your services business is also difficult because it is so personal.
- When we in a services business and try to develop a narrow market position, it is hard because it's so wrapped up in our identity of who we are
- For beginner business owners, it's not 100% apparent that dramatically narrowing your focus is one of the keys to opening up access to higher fees and better clients
There is only one repeatable path to premium rates and better clients that is under your control, and that path involves narrowing your focus in order to increase the value you deliver to clients. This path sets you up for sustainable growth, and solves a myriad of problems in your business. Talk to us today about positioning your service business.
|Tags: Value Proposition Brand Strategy|