Differentiation

Differentiation should be a critical part of a firm's strategy. When communicated, it explains how a firm sets itself apart from its peers. This may be how your firm works with its Clients, how a service is delivered or what the firm is famous for with its Clients.

Many firms use straplines to reinforce and differentiate their brand in some way with the aim of gaining competitive advantage. These are usually placed alongside or underneath the brand name or logo. Straplines were first introduced in the consumer sector, gradually appearing in the service sector and now to professional firms. A famous strapline in the UK retail sector is that of John Lewis, which states 'Never knowingly undersold' and is matched with behaviour - the company will refund the difference if you could buy an item cheaper elsewhere. Some straplines are used audibly in advertising. Another example is from Avis, the car rental company, whose phrase and behavioural campaign 'We try harder' - and stories on how they did it - helped it to gain market share against rivals Hertz. Others use the personality of their founder as a unique differentiator, e.g. Richard Branson for Virgin. Table 6.1 shows examples from professional services firms.

Table 6.1 Straplines Used by Professional Services Firms

Sector

Firm

Strapline

Accountants

EY

Building a better working world

Grant Thornton

An instinct for growth™

PwC

Building relationships, creating value

Law

DLA Piper (USA)

Everything Matters

Shepard Mullin (USA)

Our Mission is Your Success

Property

GVA

Creating real value in property and places

If it is possible to find something that is unique, distinct and interesting about your firm, such as an award for service excellence, it is good practice to use it as a differentiator and helps to build image and reputation. Developing a value proposition will help to differentiate the firm. However, it is important to realise that differentiators are not sustainable forever. Therefore it is incumbent on firms to optimise the commercial leverage of any differentiator that it owns.

Developing a Value Proposition

A value proposition is something highly desirable to Clients that is ideally unique to your firm or cannot easily be emulated by competitors. It may also be tailored to a specific group of Clients.

The challenges of diversity

Defining a value proposition for a professional services firm is not straightforward. This is due to the diversity of Clients, market sectors, services and not least the regulatory, legislative issues and limitations that professional services inevitably carry with them. Global firms have an even bigger challenge that adds the dimension of country cultural differences and practices.

An example of avalue proposition from an accountancy firm

'We focus on business issues and provide Clients with insights around their issues and the support to solve them.' This is a very general proposition that could be used by many firms.

A Hierarchy of Value Propositions May Be Needed

Larger, particularly global firms could consider developing a 'hierarchy' of propositions. This would start by developing a broad, corporate/firm-wide statement, not unlike the example above. Value propositions may then have to be defined for market segments rather than the whole firm. This may already happen during the bid process, so it should be possible to articulate value propositions per Client group. These can be market tested and then rolled out as appropriate. For a value proposition to succeed it is best tailored to a particular Client.

STAGES IN DEVELOPING AVALUE PROPOSITION

To develop a value proposition it is necessary to understand the current strengths of the brand and the firm and whether related messaging includes a compelling, value-differentiated, rationale to buy the firm's services. This involves a number of stages:

• Reviewing the brand image, its credibility in the served markets and how the firm stands out from its competitors.

• Discussions with Clients and prospects to validate these facts. There may be some aspects of the brand that are working well and others that are not perceived as value by Clients and prospects.

• From these discussions it should then be possible to state the firm's core differentiator and its benefits to Clients.

• Validate the Clients' perceptions of value as a function of time, money and degree of risk

• Determine the drivers of Client motivation and emotional engagement with the firm.

• Create an expression of the Value Proposition that incorporates the above factors.

• Test the proposition with Clients and non-Clients to validate it before launching.

Attributed to Douglas Commaille, DCLW Consulting.

 
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