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Differentiating your consulting firm may sound simple in theory.
But when you’re in the process of actually doing it, nothing feels riskier.
We all know the benefits — consulting firms that specialize have a higher chance of growth: meaning they are up to twice as profitable.
But how do you differentiate your business successfully? Is it as easy changing your value proposition on your LinkedIn tagline or website?
In this article, we’ll look at a story of a consulting firm that was able to differentiate their firm successfully — and it completely changed the fate of their business.
The Consultant With the Pink Hair by Cal Harrison is the story of Andrew Braun and Lou Di Angelo, management consultants who are struggling to make payroll and keep their firm afloat.
After attending a marketing seminar about the massive benefits of differentiating, Andrew gives himself 4 weeks to come up with a strategy for differentiating their consulting firm, Di Angelo Braun Consulting.
The book takes us through Andrew’s process of going through the many ways of NOT to differentiate, and at the end, he finds the right way of doing so that completely changes his business.
What the book aims to teach you is how you can differentiate your consultancy in a way that matters to your prospective clients.
Merely differentiating yourself is easy — hence the title, The Consultant With The Pink Hair. A consulting firm full of pink haired consultants would certainly stand out from their competition.
It’s differentiating your business in a way that matter’s to your prospects and clients that is hard. A consulting firm full of pink haired consultants stands out, but not in a way that matters.
By the end of this article, you will…
- Understand common myths about differentiating, and how they are wrong
- Know HOW NOT to differentiate your firm — and the one way of differentiating your consulting business that works
- Learn how you can apply differentiation to your marketing materials
All quotes found in this post are taken from the book unless otherwise specified.
Differentiation Myth Busting
Myth Number 1: What Works for Other Businesses Works for Consultants
Differentiating a business that sells beer or widgets is completely different than differentiating a consulting firm. One sells $10 products, and the other sells $10K-$100K, high-touch consulting services.
There are dozens of ways to differentiate the former, and only one real way to differentiate the latter.
Myth Number 2: Positioning Is Easy
All of the ways of differentiating that aren’t helpful to your prospects are easy to claim.
It’s easy to differentiate your firm based on anything other than the quality of your advice (which often comes from specialization and/or years of developing expertise in a specific industry or problem), by talking about your unique process, your people, or even simply dropping your prices.
You can claim any of these things on your website and other marketing material in minutes.
But as the book notes, these methods are far easier than they are effective. Effective positioning is about selecting a specific industry or problem to focus on and developing expertise in that area. The process of focusing your marketing message on this expertise feels tremendously risky — but the results can mean the difference between a profitable and enjoyable work life versus simply “treading water.”
Myth Number 3: Why Differentiate? Referrals Are All You Need
“New clients had come almost exclusively from painful proposal writing, uncomfortable networking and every now and again a weak referral from a friend or relative.”
Although word of mouth is how many consultants get started, in most cases, it won’t provide you with new business forever.
Effectively differentiating your business will put the power in your hands, and help you market your business in a way that brings prospects to you.
How To Differentiate Your Consulting Firm (And How Not To)
Here are the 12 ways of Andrew and Lou discuss as potential ways to differentiate their firm.
- People and Relationships
- Customer Service
- Third-Party Endorsements
- Core Product
Methods 1-11 are not valuable forms of differentiation for consultants and consulting firms, for various reasons that the story explains.
To summarize, methods 1-11 are easily replicable by your competitors, and not very valuable to your clients.
Ultimately, the only thing that matters for consultants is number 12 — core product.
“It was the quality of their product — the quality of their advice — that made them valuable and significant to their clients. And if they could offer better advice about a specific client problem and industry than any other firm it made sense that a client would find them more easily and more likely be willing to pay more for their services.”
As a consultant, you are selling your expertise and your advice. Your advice can only stand out from your competitors if you have specialized.
This is validated by A Win Without Pitching Manifesto:
“Expertise is the only valid basis for differentiating ourselves from the competition. Not personality. Not process. Not price. It is expertise and expertise alone that will set us apart in a meaningful way and allow us to deal with our clients and prospects from a position of power.”
Not only does effective positioning give you more power in your business, it will fundamentally change the way you acquire work:
“This power shift allows us to affect the buying process and increase our ability to protect ourselves from having to part with our thinking for free, from having to respond to wasteful and inefficient tenders or requests for proposals (RFP), and to otherwise devalue our own offering or increase our cost of sale.”
When you choose a specific industry, problem, or type of client, and develop expertise in that one area, you become a clear-cut winner among your competition. It makes you a safer investment, which is critical in winning new consulting business.
How do you develop and demonstrate this expertise, besides working on this type of problem or within this industry?
You write. Or, in digital terms, you start content marketing.
“The role of our thought leadership is to educate, not to persuade. The future client should be smarter for reading it, we should be smarter for writing it, and, one day, when the client does experience a problem in an area on which we’ve written, our guidance may be helpful to him in seeing the opportunity within his problem. Until that day, we continue to cement our position as leaders in our field through our writing. Experts write.”
Differentiation Do’s and Dont’s
DO: Make your positioning clear on your website.
Here’s a quote from the book that demonstrates the value of being clear cut on who you serve on your website:
“Turns out he’s a lot like John Harder — no need for consultants but always looking for good advice. He said he did a quick internet search for ‘ag equipment product design’ and we were in the top few results. And then when he drilled down into the content on our site and saw your article on seed testing equipment and Sheldon’s moisture/nutrient case study, he said it was obvious that our expertise would be quite valuable to the project,” said Lou.”
When you clearly define your market position on your website instead of trying to appeal to a broad audience of potential clients, Google picks up on it. Using specific keywords in your blog articles, headings, and subheadings, as well as your content, your website will rise in the search rankings.
Given that SEO leads convert more than 8x better than outbound leads, being specific throughout your website and rankings will win you new projects.
Your clients may not use the web for hiring consultants, but they do use the web to find good advice. Make sure your website is the place where they find this good advice, and you will turn your website traffic into clients.
DON’T: Differentiate yourself in any of the “weak” ways.
I’ve said it before and it’s worth saying again — there are weak ways to differentiate, and you want to avoid these at all costs. They do nothing to increase your prospect’s confidence in hiring you.
80% of the book is Andrew learning all of the things he should avoid when it comes to differentiating his firm — things like price, process, people, etc. Before you can successfully begin to differentiate, you need to know what NOT to do.
“Although ‘Be Different from your competitors’ was the strategy offered by their ad agencies and the marketing gurus, professional services firms almost universally communicated their conformity. The home page or “About Us” sections of their webs sites were the strongest evidence of their failure to explain how they were unique or better than competitors.”
Don’t make your people, your credentials, or your process the main focus of your website. Your prospects are more interested in themselves. Talking to them about how you can help them (with your specialized experience in their business) is what will win you new business.
If you are interested in reading the story, and learning about how Andrew and Lou discover how to successfully differentiate their firm, you can purchase the book on Amazon.
Check out Cal Harrison’s website, Beyond Referrals, for more advice on marketing, strategy, and differentiation.
And remember — put yourself in the minds of your clients:
“The last thing I need is a management consultant. What I could use, though, is some good advice.”
If you’re interested in exploring the possibility of differentiating your firm, here’s a helpful exercise:
- Think about your favorite client. One that you would be happy to replicate over and over.
- Name the industry that they work in.
- Write down what you helped them achieve? Be specific.
- Browse through all of your past clients and your work. Can you find any similarities between your favorite client and your previous clients. Is it the industry? Is it the result you have helped them achieve? Take inventory so that you can find patterns.
- If you find many similarities between your favorite clients and your past clients, explore this niche as an opportunity for differentiation. If you don’t find many similarities, do some more research on this potential area of specialization. Look into potential clients, and reach out to them not to sell anything — but to learn about their business and this problem. You’ll need to do some validation before exploring it further as an opportunity for specialization.
What are some ways you’ve successfully differentiated your consulting business? Share in the comments below!