Focus to Grow
August 4th, 2009 | 
Author: In turbulent times like these, marketing communications firms are scrambling to identify the best business strategy not only to get them through this recession, but to position themselves for success once the recession is over.
The natural response is to “try a little bit of everything”; to expand your services, broaden your capabilities, and try to appeal to more clients. It seems like common sense, but it’s exactly the wrong response. The best growth strategy — in good economies or bad — is to decide what not to do.
Expand by narrowing
Imagine two architectural firms: one that’s extremely focused with a clear value proposition, and one with an unfocused business strategy that attempts to do everything for everybody. Which of these two firms would have:
- The strongest earning power?
- The largest geographical market area?
- The fewest competitors?
- The greatest degree of respect from clients?
- The most sophisticated clients?
The answer in every case is the focused firm. Let’s look at each question individually.
The greatest earning power. It’s a simple fact that the specialist earns more than the generalist. This is true in medicine, law, engineering, architecture, consulting, construction, you name it. This is because the specialist knows more, and we live and work in a knowledge economy.
The largest geographical market area. Focused firms draw clients from all over the globe, not just from their own Zip code. That’s because what they’re selling isn’t available down the block from some other firm just like them.
The fewest competitors. The easiest way to narrow your competition is to narrow your focus. There are far fewer specialists than generalists, and the law of supply and demand dictates that the less supply the greater the demand.
The greatest degree of respect from clients. Knowledge and expertise equals respect. An effective value proposition allows your firm to develop and leverage its intellectual capital. This makes you valued – and respected – not just for what you do, but what you know.
The most sophisticated clients. In the boardrooms of professional firms everywhere is heard the lament “If only we had better clients.” A quality value proposition attracts a quality client. A business that proclaims “we’re right for everybody” is logically going to attract both the good and the bad.
As business strategist Chris Zook writes in his insightful book Profit from the Core,
Having a clear sense of business boundaries and of the definition of your core is a critical starting point for growth strategy. Identifying the core of your business is the first step in determining how to grow.
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I respectfully disagree. I think an advertising agency has to be more than it used to be. And one doesn’t become more than it used to be by narrowing.
Exhibit A: Motrin. Last year a campaign by Taxi got blindsided by angry moms on Twitter. The PR agency for Motrin was unaware of what Taxi was doing. Two agencies focusing on what they do best by being narrow didn’t help the client.
Now, you could say Matt, take your one example and shove it. Narrow is the way to win. But I think social media is blurring the lines enough that narrow won’t get it done.
A decade ago, silos didn’t matter to a client (and I use the word silo because it’s a large narrow thing that sits in a field by itself not talking to the other silos.)
But as Motrin proved (and the next one coming) if a brand doesn’t have a plan for a crisis from their narrow agency, I humbly suggest getting an agency with a PA/Crisis team.
I’ll go further. Why not have the web guys at the TV shoot so that they can take some footage and make it really work in the web (instead of simply putting TV spots on YouTube)?
Last question: I’m convinced that this kind of interaction around the brand is the way things are moving. http://tinyurl.com/3clgob. I think more brands are going to want engaging stories that exist online and in ads. I think narrow doesn’t come up with this.
I think the comment above misses the point… but I do agree that social media now blurs everything.
All marketing communications firms, through their own web sites sound and look alike, and offer pretty much the same expertise (knowledge and talent)… the differences between them are barely perceived by the client buyer. You have a choice to pour your knowledge and expertise into a deep and narrow “pilsner glass”, or you can pour it as a shallow film into a wide pan… the point is to narrow the availability of choice and strengthen your power in the buying cycle… there are 77,000 marketing communications firms in the US alone… clients have over-supply and all the power in the buying process… which is why this profession is stuck with providing our expertise for free in the “pitch”…