Defining Yourself and the Firm

Firms differentiate themselves from the competition by carefully defining their attributes and characteristics. This step is critical to success. Firms that have focused service offerings generally have better performance than firms that try to do it all. To attract new clients and retain existing clients, you must define yourself and the firm in such a way as to differentiate yourself and the firm from the competition. It is imperative that you convince existing and prospective clients that you offer something unique that the competition does not. Failing the ability to offer a unique service, you become a commodity product. Additionally, differentiating yourself and thus taking the firm out of the realm of the fungible product enables the firm to charge more for its services.

Defining and differentiating yourself may seem like a daunting task. However, a highly productive team-building exercise begins by gathering partners and principals in a room to discuss the basic tenets and unique capabilities of the firm. Each of the participants should spend a few minutes identifying the attributes that make the firm a better option than the competition. Write this list on a board or flipchart. After the list is complete, the group should identify the competition and list their attributes. Finally the group compares the lists by crossing off every characteristic that you identified as also being a characteristic of the competition. What remains are the attributes that make the firm different. These differences could lie in the culture of your firm or a unique service that you offer. Regardless, these differentiating factors must be the focal point of any marketing discussion with potential or existing clients.

As part of this exercise, you may engage the strengths, weaknesses, opportunities, and threats (SWOT) analysis that focuses on key marketing issues and should be a technique incorporated into the exercise of defining the firm and the ideal client. When conducting the SWOT analysis, the participants should be realistic and extremely critical of the firms weaknesses and external threats. The analysis will not be effective unless the group avoids the natural tendency to ignore weaknesses and threats. Specificity in identifying the firms strengths and weaknesses and the markets opportunities and threats will make it more valuable and effective.

Strengths and weaknesses are internal factors. Strengths might include such things as the firms focus or expertise, the quality of the firms work product, the firms recent successes, the firms ability to think outside the box, the quality of the firms process and procedures, and any other aspects of the firms business that add value for the firms clients.

Weaknesses may include undifferentiated services that the firm offers in relation to its competitors, previous damage to the firms reputation, a historic inability to successfully manage the expectations of the firms clients, and lack of experience in particular areas of the firms practice.

Opportunities and threats are external factors. Opportunities might include developing markets that represent potential new clients, strategic

alliances, new services that offer additional ways for the firm to drive revenue, and areas of the market currently being serviced by a competitor that offers an ineffective or inferior product.

Threats can include new competition within the firms market, new and innovative services offered by the firms competition, successes of the firms competition, and superior expertise and experience being offered by the firms competition.

Defining the Firms Target Market and Ideal Client

In addition to defining the firm and its capabilities, you can most effectively utilize resources by identifying a specific target market or type of client. The shotgun approach is an inefficient way to develop business and usually results in bad business for both the firm and the client. Defining a focused market and identifying specific clients or industries allows you to focus marketing efforts and better understand prospective clients and their concerns. After identifying the ideal market or clients, the firm will be positioned to efficiently market its services and ensure the efficient use and allocation of your financial and human resources. A common mistake, made particularly by smaller firms, is to attempt to be all things to all clients. Not only does this lead to disappointed clients but also to burned out delivery staff as they move from project to project with very little carryover of knowledge, skills, and intellectual property to help them. A tight focus on a specific, narrow service offering is important for small to mid-sized firms.

When defining the target market, the firm should evaluate the following characteristics:

Whether the client is an individual or business entity,

The industry in which the ideal client does business,

The annual revenue (or other measure of size) of the ideal client,

The geographic location of the ideal client,

The number of employees, and

Whether the ideal client is publicly or privately held.

After determining a target market, the firm should focus its efforts on the ideal client based on the analysis. For example, if the best client for the firm is a mid-size manufacturing company, then all marketing efforts should be targeted toward acquiring business from new clients in that industry or market. Putting the firm in front of the target market and developing a reputation within that market will ensure success.

A few years ago, a New York-based law firm specializing in securities compliance found itself assisting several privately held companies with general

corporate issues. After engaging in this exercise, the firm discovered because of specific expertise that it had developed, that its ideal clients were actually publicly held companies and organizations involved in the securities markets. The firm then refocused its efforts and was able to increase its client base significantly. Additionally, by focusing on larger companies and well-established securities firms, the firm was able to achieve higher billing rates. Finally, by developing a niche and becoming an expert in its field, the firm soon found itself turning away business to manage its rapid growth. Although this firms experience may be exceptional, it is not unique and is a useful example of the value of focus in service offering and target market.

Using Human Resources Efficiently and Effectively

An important challenge facing professional services firms is the efficient allocation and utilization of its human and financial resources in the pursuit of new business. While the firm may offer an excellent product and exceptional service, if you are unable to market those services and develop a reputation within your target market, your firm will fail to satisfy its potential and may even fail to survive.

As discussed in Chapters 3 and 10, most professional services firms are structured as partnerships or corporate entities with members who serve as decision makers. Therefore, in the spirit of maximizing the return on human and financial capital, it is not surprising that most professional services firms use their partners/members and employees to market the firm and develop business.

The Partner Model

There are numerous techniques and models used by professional services firms to market themselves and develop business. However, using the firms personnel-the partner model-is by far the most common method employed by small and mid-sized firms.

Advantages and Disadvantages of the Partner VModel* There are numerous advantages of the partner model. Some of them include:

Professionals are often motivated by monetary gains and personal gratification to successfully market the firm. Using the firms personnel ensures that financial and personal interests are aligned. The synergy of aligning financial and personal interests is a powerful motivating factor. This is important because developing business is difficult and requires a