Seven Effective Differentiators
For Financial Services Firms
Finding ways to differentiate your firm from competitors may be one of the most vexing challenges you can face. After all, it may well be that there are more similarities than differences. But with a little focus and some self-inquiry, it is possible. In this article, Dr. Frederiksen shares seven effective differentiators for financial services firms.
Finding ways to differentiate your firm from competitors may be one of the most vexing challenges you can face. After all, it may well be that there are more similarities than differences. But with a little focus and some self-inquiry, it is possible.
My firm has done a great deal of research on the topic of differentiation for professional services firms, and below I have listed seven possibilities to help you get started. Of course, you do not need to limit yourself to one differentiator; you could actually combine one or more to gain an even compelling competitive advantage.
1. Specialize in Serving a Certain Industry
For most firms, this may be the most successful approach to differentiationâ€”and the easiest to implement. In general, clients value specialists in their industry. But a word of caution: If you attempt to specialize in too many industries, you could stand to lose credibility.
2. Focus on Serving a Role Within Your Clientâ€™s Organization
Specializing based on the roles that clients have can also be quite successful, especially when combined with a focus on a certain industry. For example, if someone is in charge of acquisitions of a health services provider, they may find it comforting to know that their service provider specializes in helping people just like them.
3. Offer a Specialized Service
This approach can also be quite successful, particularly if your specialized service is rare or hard to find. Just be aware that unique service offerings can rapidly become commonplace. Consider, for example, firms that focus on Sarbanes-Oxley compliance or social media marketing.
4. Offer a Technology or Process That is Truly Unique
This can be a very powerful differentiatorâ€”but keep in mind that â€śtruly uniqueâ€ť is a rather high bar to clear. For example, it is hard to convince audiences that a process is unique if it begins with assessment and ends with tracking results and adjusting. Rather, â€śtruly uniqueâ€ť means an approach that is an entirely different approach to the problemâ€”and, one that provides the client with a unique benefit.
5. Serve Clients of a Certain Size
This is a surprisingly common differentiator, even though many people do not think of it that way. For example, you might work exclusively with some of the worldâ€™s largest organizations, or your firm might focus on solo practitioners. Either approach could be the basis of a competitive advantage over firms that serve clients of every size.
6. Serve Clients Within a Specific Geography
This differentiator is very traditional. However, as technology and changing business practices make geography less important, its impact as a differentiator is losing some of its punch. The good news is that it can still work in cases where potential clients regard local knowledge or face-to-face interaction as important.
7. Have One or More Visible ExpertsÂ® at Your Firm
This strategy is time-tested and works very well as a differentiator. Having the countryâ€™s (or even your local marketâ€™s) top expert in your area of specialty can provide a very powerful competitive advantage. In fact, many firms have built their successâ€”and their brandsâ€”on this differentiator alone.
One last word of caution. You need to find the differentiators that are the strongest and most effective for your firm and market. When vetting potential differentiators, you can weed out weak contenders by asking three simple questions:
- Is it true? Does the differentiator accurately represent who your firm is?
- Is the differentiator relevant? Will your clients regard it as valuable to them?
- Can you prove it? Is there strong evidence to support your claim?
If a potential differentiator fails even one of these tests, your best solution is to scratch it off your list and keep working on finding others.
The Time to Differentiate is Now
Remember, finding a differentiator (or differentiators) for your firm can provide an incredibly powerful marketing advantage. So, it is worth investing some time to find the differentiators that are true, relevant, and provableâ€”and thus will have the most impact on your potential clients. For more information on this topic, check out our upcoming course, Differentiation, Positioning, and Messaging, specially priced for NACVA members.
Lee W. Frederiksen, PhD, is Managing Partner at Hinge, the leading branding and marketing firm for the professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to become more visible and grow.
Dr. Frederiksen can be contacted at (703) 391-8870 or by e-mail to LFrederiksen@hingemarketing.com.