As a professional services firm, the ultimate business strategy is to not just be a category leader, but to create a new category; to be a category of one. The most powerful positionings create a new market, in which you are the leading – and only – provider.
Of course this isn’t easy. (Nothing worth doing is.) Writing recently in the Harvard Business Review, Seth Godin observes “If you can offer a scarce and coveted good or service that others can’t, you win. What is both scarce and in demand. Things that are difficult; difficult to conceive, to convey, to make … In fact, just about the only that that is not available in unlimited supply in an ever more efficient, connected works is the product of difficult work.”
The alternative is to produce the same thing most other agencies produce; the stuff that the client community increasingly regards as “commoditized.” Here are the top criteria economists use to evaluate the degree to which a product or service has become a “commodity”:
- Homogeneous products and services. The characteristics of the product or service do not vary much across providers.
- Industry standard specifications. The means of developing the product or service are well understood and widely available.
- Excess supply of buyers and sellers. There are an abundance of customers with the willingness and ability to buy the product or service at a certain price, and an abundance of producers with the willingness and ability to supply the product at a certain price.
- Wide availability. There is overcapacity in the market because the product or service is widely distributed and easily obtained.
- Low barriers to entry and exit. It is relatively easy to enter or exit as a business in a “commoditized” market.
If your approach is to look around to see what other agencies are doing (so called “best practices”) for inspiration, your business strategy will just be a reflection of what already exists. Your goal should be to develop a business model that’s “scarce.” And you won’t find it through focus groups and “listening to your customers.” Apple’s breakthrough product line didn’t come from customer input. Brilliant business strategies – in agencies as in client organizations – are about leading, not following.
Be creative about your own brand
Agency professional Darryl Ohrt’s guest column in Advertising Age, “Don’t Let Your Agency Be a Cover Band” makes the point that lack of originality is the reason most agencies never break from the pack. Observes Ohrt, “It’s ironic that so many in our industry have a hard time being original. They’re coming up with innovative, original conceptual work for their clients each and every day. But when it comes to taking care of themselves, plenty of agencies stick with the ‘we’ve always done it like that’ approach. And in a noisy industry space, that’s not enough to stand out, and leaves clients and talent looking for another band."
In positioning your firm, your objective is to be exclusive, not inclusive. Strategy making is like map making; you can’t include everything. “Cartography is essentially about dividing things up – deciding what’s in and what’s out,” says University of Toronto professor and business author Sarah Kaplan. “In order to draw a map of any sort, you have to take a stand for some things and not for other things.”
So make your mark by making a market – of your own.