Differentiation Dilemma: How to Set Your Firm Apart
Ask any accounting firm what sets them apart from the competition and chances are very good the answer you will get is “our high level of service.” Many firms – 63 percent, in fact, according to our research – claim “the level of service we provide” as the key differentiator that separates their firm from all the rest.
Here’s the funny thing: If the majority of firms make this claim as unique to them, it’s unique to nobody. Their key differentiator is no differentiator at all. “But so what?” some may ask. “What’s the big deal about differentiators anyway? All accounting firms offer basically the same services, right?”
The short answer might be, “Well, yes, many accounting firms do offer essentially the same services, but that’s all the more reason to find a way to stand out in the herd.” That’s why it’s so important for professional services companies, such as accounting firms, to develop unique differentiators. It’s a highly effective way to build visibility and value for prospects and current clients.
Which brings us to the struggle that so many professional services firms have with finding a unique differentiator and why so many simply settle for “our high level of service.”
But don’t worry, there’s hope. Our research shows that if you choose any other differentiator, you’ll grow 2.5 times faster than all those other guys using “level of service.”
Clearly, there are lots of opportunities for accounting firms like yours to take advantage of underused differentiators. Fine, you say, so what should I be touting? Our studies have revealed that the three most successful differentiators used by professional services firms in general just happened to be virtually ignored by the accounting and financial services industry. They are:
- Marketing/business development approach, in which the firm works to become a thought leader for their industry or segment, or focuses on educating prospects.
- Their use of technology, such as developing proprietary software to help deliver their services more effectively.
- The industry they target; for example, specializing in the unique needs of the healthcare industry.
While we’re certainly not trying to tell you what to use – only you know what fits and will work best for your firm – we can tell you that, compared to the least profitable accounting and financial services firms, highly profitable firms were three times more likely to identify their marketing approach as what differentiates their firm. They were also more likely to use blogging, guest blogging, and webinars in their marketing mix.
Of course, it’s important to remember that whatever you claim as your key differentiator, it must adhere to the following three rules:
1. Your differentiator must be true. In other words, you can’t just make one up. You have to live it. If you promise a differentiator but fail to deliver, you will damage your brand. 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 that you won’t actually be different.
2. It must be important to your client. Even if you are different, that doesn’t mean your client cares. We had a client who felt that their lack of conflict of interest (which many of their competitors suffered from) was their strongest differentiator. The problem was, when we interviewed their clients, they simply didn’t value that characteristic. So much for a strong brand differentiator.
3. It must be supportable. Prove it. That is the challenge that every differentiator must overcome. It may be true and it may even matter to your clients, but if no one believes you, it will never fly. This is the fate suffered by many, many professional services brands. This is especially a problem when it comes to “soft” brand differentiators, such as client commitment, client service, and talented staff. If “everyone says it” and you have nothing to point to, you’re out of luck. Kiss that differentiator goodbye.
It’s essential to remember that no matter how you arrive at an effective differentiator, it’s more than a lofty idea; it is who you are as a firm. When a differentiator is working as it should, it’s a guiding imperative, expressing itself in your firm’s every action.
You have to live your key differentiators every day, working and acting in ways that are consistent with them. The work is continuous, and if you do it well, it can drive you to new levels of success.
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Lee W. Frederiksen, PhD, is managing partner at Hinge, a marketing firm that specializes in branding and marketing for professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to...