Our talented team know how to excite, inspire and engage. With backgrounds in events, entertainment and travel, we’re full of ideas for amazing prizes and unforgettable incentives!
At Fulcrum, we all come to work every day because we have a shared love of travel and delivering once-in-a-lifetime experiences.
Our team meetings are buzzing with fresh ideas, brand new experiences and glowing feedback from our travellers. We know what makes a great incentive, we have an encyclopaedic knowledge of the best experiences around the world, and we have an ever-expanding ‘little black book’ of the most exclusive suppliers in the business.
In addition to our creative ideas and experience, we know that our clients value our expertise and dedication to solving problems rather than creating them. Prizes and incentives are our world, but we understand that our clients have other priorities, so we make sure we’re delivering our ideas on-time, on-budget and on-brand. We thrive on tight deadlines, logistical challenges and creating perfectly tailored solutions, without the headaches!
About us
Perfect solutions every time
As a leading marketing Agency, we’re immensely proud to work with brands and agencies across a huge range of sectors and industries, giving us an unrivalled breadth of experience.
we have created and fulfilled prizes for promotions and activations across the world.
Our aim: help our clients achieve their goals through our experience and expertise, taking the stress and hassle out of prize fulfilment.
We work for both direct brands and agencies, often in collaboration or with other specialist agencies and partners. Many of our clients have existing assets – from festival tickets to sports hospitality – which we help them to build into the best possible prize packages. Others want to create unique, eye-catching marketing and btl content around their prize winners. We can deal with winners from any country and in any language; we can provide a full btl management service; we can even source camera crews for content capture.
Whatever your brief, we’ve got it covered.
SALES INCENTIVES
Driving sales and performance through tailored, flexible incentive programmes
With pressure always on to drive sales and performance, sales incentives are an essential part of rewarding achievement within many companies. From internal staff reward programmes to dealer and channel incentives, there’s no better way to create a happy, engaged and motivated workforce.
Our main goal is to understand your people and what makes them tick. From hundreds in a call centre team to a small on ground sales team, a clear overview of your audience is the most important part of the process. By taking a best approach, offering maximum choice and flexibility, we create incentives which are targeted, effective and tailored to your team.
Whether it’s sales rewards, dealer incentives or channel incentives, drop us a line; we’d love to help you drive sales with our fresh and creative approach to prizes and incentives. From once-in-a-lifetime holidays to mini-breaks, high-street vouchers and designer goods, you can rest assured that with Fulcrum you’re in safe hands.
24 hour turnaround for urgent briefs
Topline ideas within 2 hours if needed
Competitive fixed quotes with no hidden costs
Expert Winner Management and Fulfilment
Retail Marketing Agent | engagement marketing Supplier Swargate
How Markets Are Segmented
5.2 How Markets Are Segmented
Learning Objectives
- Understand and outline the ways in which markets are segmented.
- Explain why marketers use some segmentation bases versus others.
Sellers can choose to pursue consumer markets, business-to-business (B2B) markets, or both. Consequently, one obvious way to begin the segmentation process is to segment markets into these two types of groups.
Different factors influence consumers to buy certain things. Many of the same factors can also be used to segment customers. A firm will often use multiple segmentation bases, or criteria to classify buyers, to get a fuller picture of its customers and create real value for them. Each variable adds a layer of information. Think of it as being similar to the way in which your professor builds up information on a PowerPoint slide to the point at which you are able to understand the material being presented.
There are all kinds of characteristics you can use to slice and dice a market. “Big-and-tall” stores cater to the segment of population that’s larger sized. What about people with wide or narrow feet, or people with medical conditions, or certain hobbies? Next, we look primarily at the ways in which consumer markets can be segmented. Later in the chapter, we’ll look at the ways in which B2B markets can be segmented.
Types of Segmentation Bases
Table 5.1 “Common Ways of Segmenting Buyers” shows some of the different types of buyer characteristics used to segment markets. Notice that the characteristics fall into one of four segmentation categories: behavioral, demographic, geographic, or psychographic. We’ll discuss each of these categories in a moment. For now, you can get a rough idea of what the categories consist of by looking at them in terms of how marketing professionals might answer the following questions:
- Behavioral segmentation. What benefits do customers want, and how do they use our product?
- Demographic segmentation. How do the ages, races, and ethnic backgrounds of our customers affect what they buy?
- Geographic segmentation. Where are our customers located, and how can we reach them? What products do they buy based on their locations?
- Psychographic segmentation. What do our customers think about and value? How do they live their lives?
Table 5.1 Common Ways of Segmenting Buyers
| By Behavior | By Demographics | By Geography | By Psychographics |
|---|---|---|---|
|
|
|
|
Segmenting by Behavior
Behavioral segmentation divides people and organization into groups according to how they behave with or act toward products. Benefits segmentation—segmenting buyers by the benefits they want from products—is very common. Take toothpaste, for example. Which benefit is most important to you when you buy a toothpaste: The toothpaste’s price, ability to whiten your teeth, fight tooth decay, freshen your breath, or something else? Perhaps it’s a combination of two or more benefits. If marketing professionals know what those benefits are, they can then tailor different toothpaste offerings to you (and other people like you). For example, Colgate 2-in-1 Toothpaste & Mouthwash, Whitening Icy Blast is aimed at people who want the benefits of both fresher breath and whiter teeth.
Video Clip
A Vintage Colgate Commercial from the 1950s
Watch the YouTube video to see a vintage Colgate toothpaste ad that describes the product’s various benefits to consumers. (Onscreen kissing was evidently too racy for the times.)
Another way in which businesses segment buyers is by their usage rates—that is, how often, if ever, they use certain products. Harrah’s, an entertainment and gaming company, gathers information about the people who gamble at its casinos. High rollers, or people who spend a lot of money, are considered “VIPs.” VIPs get special treatment, including a personal “host” who looks after their needs during their casino visits. Companies are interested in frequent users because they want to reach other people like them. They are also keenly interested in nonusers and how they can be persuaded to use products.
The way in which people use products is also be a basis for segmentation. Avon Skin So Soft was originally a beauty product, but after Avon discovered that some people were using it as a mosquito repellant, the company began marketing it for that purpose. Eventually, Avon created a separate product called Skin So Soft Bug Guard, which competes with repellents like Off! Similarly, Glad, the company that makes plastic wrap and bags, found out customers were using its Press’n Seal wrap in ways the company could never have imagined. The personnel in Glad’s marketing department subsequently launched a Web site called 1000uses.com that contains both the company’s and consumers’ use tips. Some of the ways in which people use the product are pretty unusual, as evidenced by the following comment posted on the site: “I have a hedgehog who likes to run on his wheel a lot. After quite a while of cleaning a gross wheel every morning, I got the tip to use ‘Press’n Seal wrap’ on his wheel, making clean up much easier! My hedgie can run all he wants, and I don’t have to think about the cleanup. Now we’re both GLAD!”
Figure 5.4
Encouraging consumers to use your products for multiple purposes is a smart marketing strategy.
Last Human Getaway – Hedgehog – CC BY-NC-ND 2.0.
Although we doubt Glad will ever go to great lengths to segment the Press ’n Seal market by hedgehog owners, the firm has certainly gathered a lot of good consumer insight about the product and publicity from its 1000uses.com Web site. (Incidentally, one rainy day, the author of this chapter made “rain boots” out of Press ’n Seal for her dog. But when she later tried to tear them off of the dog’s paws, he bit her. She is now thinking of trading him in for a hedgehog.)
Segmenting by Demographics
Segmenting buyers by personal characteristics such as age, income, ethnicity and nationality, education, occupation, religion, social class, and family size is called demographic segmentation. Demographics are commonly utilized to segment markets because demographic information is publicly available in databases around the world. You can obtain a great deal of demographic information on the U.S. Census Bureau’s Web site (http://www.census.gov). Other government Web sites you can tap include FedStats (http://www.fedstats.gov) and The World Factbook (http://www.cia.gov/cia/publications/factbook), which contains statistics about countries around the world. In addition to current statistics, the sites contain forecasts of demographic trends, such as whether some segments of the population are expected to grow or decline.
Age
At this point in your life, you are probably more likely to buy a car than a funeral plot. Marketing professionals know this. That’s why they try to segment consumers by their ages. You’re probably familiar with some of the age groups most commonly segmented (see Table 5.2 “U.S. Generations and Characteristics”) in the United States. Into which category do you fall?
Table 5.2 U.S. Generations and Characteristics
| Generation | Also Known As | Birth Years | Characteristics |
|---|---|---|---|
| Seniors | “The Silent Generation,” “Matures,” “Veterans,” and “Traditionalists” | 1945 and prior |
|
| Baby Boomers | 1946–1964 |
| |
| Generation X | 1965–1979 |
| |
| Generation Y | “Millennials,” “Echo Boomers,” includes “Tweens” (preteens) | 1980–2000 |
|
| Note: Not all demographers agree on the cutoff dates between the generations. | |||
Today’s college-age students (Generation Y) compose the largest generation. The baby boomer generation is the second largest, and over the course of the last thirty years or so, has been a very attractive market for sellers. Retro brands—old brands or products that companies “bring back” for a period of time—were aimed at baby boomers during the recent economic downturn. Pepsi Throwback and Mountain Dew Throwback, which are made with cane sugar—like they were “back in the good old days”—instead of corn syrup, are examples (Schlacter, 2009). Marketing professionals believe they appealed to baby boomers because they reminded them of better times—times when they didn’t have to worry about being laid off, about losing their homes, or about their retirement funds and pensions drying up.
Baby boomers are aging and the size of the group will eventually decline. By contrast, the members of Generation Y have a lifetime of buying still ahead of them, which translates to a lot of potential customer lifetime value (CLV), the amount a customer will spend on a particular brand over his/her lifetime, for marketers if they can capture this group of buyers. However, a recent survey found that the latest recession had forced teens to change their spending habits and college plans and that roughly half of older Generation Yers reported they had no savings1.
So which group or groups should your firm target? Although it’s hard to be all things to all people, many companies try to broaden their customer bases by appealing to multiple generations so they don’t lose market share when demographics change. Several companies have introduced lower-cost brands targeting Generation Xers, who have less spending power than boomers. For example, kitchenware and home-furnishings company Williams-Sonoma opened the Elm Street chain, a less-pricey version of the Pottery Barn franchise. The Starwood hotel chain’s W hotels, which feature contemporary designs and hip bars, are aimed at Generation Xers (Miller, 2009).
The video game market is very proud of the fact that along with Generation X and Generation Y, many older Americans still play video games. (You probably know some baby boomers who own a Nintendo Wii.) Products and services in the spa market used to be aimed squarely at adults, but not anymore. Parents are now paying for their tweens to get facials, pedicures, and other pampering in numbers no one in years past could have imagined.
Video Clip
Evian Water: Roll, Baby, Roll!
Watch the YouTube video to see a fun generational type of advertisement. No, the ad isn’t designed to appeal to babies. It’s aimed at us adults!
As early as the 1970s, U.S. automakers found themselves in trouble because of changing demographic trends. Many of the companies’ buyers were older Americans inclined to “buy American.” These people hadn’t forgotten that Japan bombed Pearl Harbor during World War II and weren’t about to buy Japanese vehicles, but younger Americans were. Plus, Japanese cars had developed a better reputation. Despite the challenges U.S. automakers face today, they have taken great pains to cater to the “younger” generation—today’s baby boomers who don’t think of themselves as being old. If you are a car buff, you perhaps have noticed that the once-stodgy Cadillac now has a sportier look and stiffer suspension. Likewise, the Chrysler 300 looks more like a muscle car than the old Chrysler Fifth Avenue your great-grandpa might have driven.
Automakers have begun reaching out to Generations X and Y, too. General Motors (GM) has sought to revamp the century-old company by hiring a new younger group of managers—managers who understand how Generation X and Y consumers are wired and what they want. “If you’re going to appeal to my daughter, you’re going to have to be in the digital world,” explained one GM vice president (Cox, 2009).
Companies have to develop new products designed to appeal to Generations X and Y and also find new ways to reach them. People in these generations not only tend to ignore traditional advertising but also are downright annoyed by it. To market to Scion drivers, who are generally younger, Toyota created Scion Speak, a social networking site where they can communicate, socialize, and view cool new models of the car. Online events such as the fashion shows broadcast over the Web are also getting the attention of younger consumers, as are text, e-mail, and Twitter messages they can sign up to receive so as to get coupons, cash, and free merchandise. Advergames are likewise being used to appeal to the two demographic groups. Advergames are electronic games sellers create to promote a product or service. Would you like to play one now? Click on the following link to see a fun one created by Burger King to advertise its Tender Crisp Chicken.
Burger King Advergame
http://web.archive.org/web/20110426194400/http://www.bk.com/en/us/campaigns/subservient-chicken.html
You can boss the “subservient chicken” around in this advergame. He will do anything you want—well, almost anything.
Income
Tweens might appear to be a very attractive market when you consider they will be buying products for years to come. But would you change your mind if you knew that baby boomers account for 50 percent of all consumer spending in the United States? Americans over sixty-five now control nearly three-quarters of the net worth of U.S. households; this group spends $200 billion a year on major “discretionary” (optional) purchases such as luxury cars, alcohol, vacations, and financial products (Reisenwitz, 2007).
Income is used as a segmentation variable because it indicates a group’s buying power and may partially reflect their education levels, occupation, and social classes. Higher education levels usually result in higher paying jobs and greater social status. The makers of upscale products such as Rolexes and Lamborghinis aim their products at high-income groups. However, a growing number of firms today are aiming their products at lower-income consumers. The fastest-growing product in the financial services sector is prepaid debit cards, most of which are being bought and used by people who don’t have bank accounts. Firms are finding that this group is a large, untapped pool of customers who tend to be more brand loyal than most. If you capture enough of them, you can earn a profit (von Hoffman, 2006). Based on the targeted market, businesses can determine the location and type of stores where they want to sell their products.
Figure 5.5
Automobile companies may segment markets based on income, age, social class, and gender.
Tetyana Pryymak – CC BY-NC-ND 2.0.
Sometimes income isn’t always indicative of who will buy your product. Companies are aware that many consumers want to be in higher income groups and behave like they are already part of them. Mercedes Benz’s cheaper line of “C” class vehicles is designed to appeal to these consumers.
Gender
Gender is another way to segment consumers. Men and women have different needs and also shop differently. Consequently, the two groups are often, but not always, segmented and targeted differently. Marketing professionals don’t stop there, though. For example, because women make many of the purchases for their households, market researchers sometimes try to further divide them into subsegments. (Men are also often subsegmented.) For women, those segments might include stay-at-home housewives, plan-to-work housewives, just-a-jobworking women, and career-oriented working women. Research has found that women who are solely homemakers tend to spend more money, perhaps because they have more time.
Figure 5.6
Considering the rising number of U.S. women who live without spouses, entrepreneurs have launched handyman services in many markets.
Let Ideas Compete – Handyman, up close, fixing a door – CC BY-NC-ND 2.0.
In addition to segmenting by gender, market researchers might couple gender with marital status and other demographic characteristics. For, example, did you know that more women in America than ever before (51 percent) now live without spouses? Can you think of any marketing opportunities this might present? (Barry, 1985)
Family Life Cycle
Family life cycle refers to the stages families go through over time and how it affects people’s buying behavior. For example, if you have no children, your demand for pediatric services (medical care for children) is likely to be slim to none, but if you have children, your demand might be very high because children frequently get sick. You may be part of the target market not only for pediatric services but also for a host of other products, such as diapers, daycare, children’s clothing, entertainment services, and educational products. A secondary segment of interested consumers might be grandparents who are likely to spend less on day-to-day childcare items but more on special-occasion gifts for children. Many markets are segmented based on the special events in people’s lives. Think about brides (and want-to-be brides) and all the products targeted at them, including Web sites and television shows such as Say Yes to the Dress, My Fair Wedding, Platinum Weddings, and Bridezillas.
Figure 5.7
Many markets are segmented based on people’s family life cycle needs.
Wikimedia Commons – public domain.
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Resorts also segment vacationers depending on where they are in their family life cycles. When you think of family vacations, you probably think of Disney resorts. Some vacation properties, such as Sandals, exclude children from some of their resorts. Perhaps they do so because some studies show that the market segment with greatest financial potential is married couples without children (Hill, et. al., 1990).
Keep in mind that although you might be able to isolate a segment in the marketplace, including one based on family life cycle, you can’t make assumptions about what the people in it will want. Just like people’s demographics change, so do their tastes. For example, over the past few decades U.S. families have been getting smaller. Households with a single occupant are more commonplace than ever, but until recently, that hasn’t stopped people from demanding bigger cars (and more of them) as well as larger houses, or what some people jokingly refer to as “McMansions.”
The trends toward larger cars and larger houses appear to be reversing. High energy costs, the credit crunch, and concern for the environment are leading people to demand smaller houses. To attract people such as these, D. R. Horton, the nation’s leading homebuilder, and other construction firms are now building smaller homes.
Ethnicity
People’s ethnic backgrounds have a big impact on what they buy. If you’ve visited a grocery store that caters to a different ethnic group than your own, you were probably surprised to see the types of products sold there. It’s no secret that the United States is becoming—and will continue to become—more diverse. Hispanic Americans are the largest and the fastest-growing minority in the United States. Companies are going to great lengths to court this once overlooked group. In California, the health care provider Kaiser Permanente runs television ads letting members of this segment know that they can request Spanish-speaking physicians and that Spanish-speaking nurses, telephone operators, and translators are available at all of its clinics (Berkowitz, 2006).
African Americans
Loyalty marketing
Retail Marketing Agent, engagement marketing Supplier, Corporate Marketing Staff ,
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rural marketing Plan | Interactive marketing Agent Mahavir Nagar
Our talented team know how to excite, inspire and engage. With backgrounds in events, entertainment and travel, we’re full of ideas for amazing prizes and unforgettable incentives!
At Fulcrum, we all come to work every day because we have a shared love of travel and delivering once-in-a-lifetime experiences.
Our team meetings are buzzing with fresh ideas, brand new experiences and glowing feedback from our travellers. We know what makes a great incentive, we have an encyclopaedic knowledge of the best experiences around the world, and we have an ever-expanding ‘little black book’ of the most exclusive suppliers in the business.
In addition to our creative ideas and experience, we know that our clients value our expertise and dedication to solving problems rather than creating them. Prizes and incentives are our world, but we understand that our clients have other priorities, so we make sure we’re delivering our ideas on-time, on-budget and on-brand. We thrive on tight deadlines, logistical challenges and creating perfectly tailored solutions, without the headaches!
About us
Perfect solutions every time
As a leading marketing Agency, we’re immensely proud to work with brands and agencies across a huge range of sectors and industries, giving us an unrivalled breadth of experience.
we have created and fulfilled prizes for promotions and activations across the world.
Our aim: help our clients achieve their goals through our experience and expertise, taking the stress and hassle out of prize fulfilment.
We work for both direct brands and agencies, often in collaboration or with other specialist agencies and partners. Many of our clients have existing assets – from festival tickets to sports hospitality – which we help them to build into the best possible prize packages. Others want to create unique, eye-catching marketing and btl content around their prize winners. We can deal with winners from any country and in any language; we can provide a full btl management service; we can even source camera crews for content capture.
Whatever your brief, we’ve got it covered.
SALES INCENTIVES
Driving sales and performance through tailored, flexible incentive programmes
With pressure always on to drive sales and performance, sales incentives are an essential part of rewarding achievement within many companies. From internal staff reward programmes to dealer and channel incentives, there’s no better way to create a happy, engaged and motivated workforce.
Our main goal is to understand your people and what makes them tick. From hundreds in a call centre team to a small on ground sales team, a clear overview of your audience is the most important part of the process. By taking a best approach, offering maximum choice and flexibility, we create incentives which are targeted, effective and tailored to your team.
Whether it’s sales rewards, dealer incentives or channel incentives, drop us a line; we’d love to help you drive sales with our fresh and creative approach to prizes and incentives. From once-in-a-lifetime holidays to mini-breaks, high-street vouchers and designer goods, you can rest assured that with Fulcrum you’re in safe hands.
24 hour turnaround for urgent briefs
Topline ideas within 2 hours if needed
Competitive fixed quotes with no hidden costs
Expert Winner Management and Fulfilment
rural marketing Plan | Interactive marketing Agent Mahavir Nagar
Differentiation Strategy for the Professional Services Firm
Have you been competing for work that you are more than qualified to perform, only to be underbid by your competition? Or maybe you have been the one underbidding, which leaves you no room for growth or prosperity.
If you want to stop competing on price alone, it may be time to develop a stronger differentiation strategy.
Differentiation Strategy Defined
Your differentiation strategy is the way in which you make your firm stand out from otherwise similar competitors in the marketplace. Usually, it involves highlighting a meaningful difference between you and your competitors. And that difference must be valued by your potential clients. A strong differentiator will provide a competitive advantage for your firm.
Michael Porter, the famous strategist, maintains that there are only two ways to gain a sustainable advantage over your competition. One way is to compete on price, highlighting the similarities you share with your chief competition:
“We’re just as good as our competition, but we cost less.”
Unfortunately, unless you have a sustainable cost advantage, you can’t keep up this strategy for long. All it takes is someone willing to undercut your lowest price. The lowest-cost strategy also exposes you to commoditization and a much wider range of competitors, including do-it-yourself options, off-shoring and automation.
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Porter’s other way — and a better way — is to stand apart. Be different. Separate yourself from competitors in a way that is both important and relevant to potential clients.
According to our definition above, this is a differentiation strategy.
Now, a point of differentiation may be broad-based and set you apart from the rest of the industry or more narrow, appealing to a niche market. This latter approach is often referred to as a focused or concentrated strategy.
Differentiation Strategy Examples
Here’s an example of a broad differentiator: adopt a very different business model. Let’s say that hourly billing is widespread in your industry. Offering a pay-for-results billing model, instead, would separate you from competitors.
Of course, developing a broad-based differentiation strategy, in which your firm is substantially different from your industry as a whole, is hard to achieve. And even if you were able to pull it off, what’s to keep a competitor from emulating your approach?
This is why many firms choose to compete with a focused strategy. In a focused strategy you narrow your appeal to a niche audience.
For example, an accounting firm that works exclusively with chain restaurants has a very compelling differentiator to that niche market segment. However, a different audience segment, such as automobile dealers, would find no value in working with the restaurant specialists.
Advantages of Differentiation
There are some big advantages to using a differentiation strategy. Here are some of the benefits.
- You do not have to compete on price alone.
Since you have distinguished yourself from your competitors the prospective client cannot reduce their choice to the dimension of cost alone.
- You have greater appeal to your target audience.
Since you are different, and presumably better, you make a more appealing choice. This makes it easier to generate interest and close sales.
- There is no direct substitute.
This is a related point to the appeal of your difference. Lack of direct comparability forces the prospect to focus on the incremental value of your difference. This adds value that other options do not have.
- You increase loyalty.
Greater value and a lack of comparable substitutes result in greater loyalty to your firm. There is no good reason to switch (if you are delivering on your promise) and no comparable alternative to switch to.
- You can command greater fees.
Assuming that your differentiation is one that adds value and is not available elsewhere you are in a position to command higher fees. This is especially true if your differentiator is around specialized expertise.
Whether your strategy is broad or very focused it must always start by identifying your firm’s differentiators.
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Differentiator Defined
A differentator is something that makes your business meaningfully different from your competitors and more valuable in the eyes of your target audience. Differentiators are the building blocks of a differentiation strategy.
But simply calling something a differentiator doesn’t make it so.
First it must pass three tests.
Three Tests for a Successful Differentiator
How do you know you have a good differentiator? We recommend you put each one to the test. If it can pass these three critical checks, it is worth developing into a broader differentiation strategy:
1) Is it true?
Differentiators can’t be fabricated. Apart from the moral hazard of making stuff up, it is simply too easy for people to see through exaggerated claims. Whatever you put forth s a differentiator, your firm has to live it each day. And remember, you’ll need to deliver on your promises.
For example, many firms say they have superior client service, but they do nothing special to make it a reality. No special policies. No special training. Nothing to ensure it actually happens. The bottom line is they are no different than a slew of competitors that make the same claims.
2) Is it relevant?
If your point of distinction doesn’t matter to your prospects, it won’t bring you more business. In the end, what is most important is what plays into your target prospects’ selection criteria and decision-making process. Any irrelevant differentiators are wasted effort.
We once had a lobbying client that believed their strongest differentiator was their firm’s lack of conflicts of interest. Their competitors certainly could not make the same claim. But, when we dug a bit deeper, we discovered that their clients and prospects didn’t value impartiality much at all. So much for a strong brand differentiator.
In our research of professional services firms, we found another reason to reject client service as a differentiator — buyers don’t even consider it as a selection criterion. A lack of customer service may be a reason why you lose a client, but it rarely plays into the initial selection process. It’s just not relevant yet.
3) Is it provable?
This is the often the hardest test of a differentiator. You may have identified a true and relevant point of distinction, but it is useless without proof. Even if a differentiating statement is true, if you can’t substantiate it with evidence it buyers won’t believe it. They have become inured to — and learned to ignore — empty claims.
Here’s a popular differentiator candidate that many of our clients are fond of: “We have great people.” It is a trap! Why? Well, have you ever heard a firm claim they have average people?
Didn’t think so.
But there are exceptions. One of our clients provides specialized software development services — and they hire only PhD-level programmers. They actually can support a “great people” differentiator with evidence.
The Challenges of Maintaining a Competitive Advantage
You are well on your way to a solid differentiation strategy once you know what sets you apart from your competitors. Especially if you can explain — and prove — it in a way that is relevant to your target audience. But you are not done yet.
The marketplace doesn’t stand still. Shrewd competitors will look at your success and attempt to copy it. Over time, what was once a distinctive characteristic may be neutralized. Your competitive advantage will be lost.
To build a sustainable differentiation strategy you need to build your reputation around those distinctive characteristics and make your expertise exceptionally visible to your target audience. This “Visible Expertise” will become the foundation of your professional services brand.
Why Visible Expertise Matters to Professional Services Firms
This brings us to the topic of expertise and why it is so critical to professional services.
In the professional services, expertise is what you sell.
Clients aren’t buying your services because they like them. They are buying your services to solve a business problem or seize an opportunity. For example they may need help complying with a regulatory requirement or solving a critical strategic challenge.
Our research into professional services buyers describes what criteria companies use to select one service provider over another. One of the most common selection criterion is expertise, and it is the factor that most often tips the scale in favor of the contract-winning firm.
But what about the argument that professional services are “a relationship business”? Well, that assumption is partially true. Good business relationships are certainly helpful. As we outlined in our book, Inside the Buyer’s Brain, both buyers and sellers of professional services understand the importance of an existing relationship, but sellers consistently underestimate the role their reputation plays in the final selection.
Also, a strong reputation for expertise is the one factor that can overcome an existing relationship. If a company does not believe their current provider can solve a problem, they will look for a firm that can.
Not long ago, a prospective client came to us for our marketing expertise. Previously, he had hired a life-long friend to help with his marketing. Despite their close relationship, he had fired his friend (and hired Hinge) because his friend could not solve his marketing challenge. Our strong reputation for solving the specific marketing challenges faced by professional services firms was more important than their personal relationship.
According to our most recent study of referral marketing, visible expertise plays the single most significant role in driving referrals. Relationships — both social and professional — are still important, but only when there is an awareness of your expertise.
SEE ALSO: Why Professional Services Buyers Seek Out Visible Experts
Overcoming the Problem of Invisibility
Developing expertise as a differentiation strategy sounds like a great idea, but there is a catch. Clients are notoriously uninformed when it comes to judging actual expertise. Consequently, your firm’s expertise is often unseen by the marketplace.
And if your firm’s expertise is not visible, for all practical purposes it doesn’t exist.
Fortunately, it is possible to make intangible expertise visible and real.
We conducted extensive research on highly visible experts and the professional services buyers who hire them. As we outline in The Visible Expert, there are certain strategies and techniques that can elevate the visibility of your expertise in the marketplace.
Public speaking, writing blog posts and articles, and publishing books are all effective ways to demonstrate your expertise. And there are many others. The value of these different techniques, when put together as part of a differentiation strategy, has been proven time and again by clients that go through our Visible Firm® or Visible Expert® programs.
But the only proven to make your expertise visible and turn it into a credible differentiator is to have a clear strategy.
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Building Your Differentiation Strategy
Developing and implementing a differentiation strategy is a five-step process.
- Start with an understanding of exactly what you want to be known for.
What are you expert in? Your area of expertise or other differentiator should be broad enough to be enduring and relevant to your clients. But that breadth must be balanced. The narrower and more specialized your expertise, the easier it is to make it visible and defend against potential competitors.
- The next step is research.
Research will help you align your firm’s offerings with the desires and preferences of potential clients. It will also inform your selection of issues to write about to make your expertise more visible to your target audience. We have found that firms that research their target client group tend to grow faster. In fact, the fastest growing firms (those that grow at least 20% year over year) take it a step further and are three times as likely to use original research in their content marketing strategy.
- Develop your differentiators and focus.
What sets you apart from competitors and delivers exceptional value to a segment of the market? Build a list of potential differentiators and put them to the three-step test. If you end up with three to five differentiators, that’s great. One strong one can even be plenty.
However many differentiators you have, you’ll need a focus. That focus, along with the supporting differentiators, will inform your positioning statement. Your positioning statement is a short statement that describes what your firm does, who it does it for and why a prospect should choose you. Think of it as the DNA of your differentiation strategy.
- Build your story.
Next you’ll need to tell your story to your target audience. Most prospective clients check you out on your website, so that’s a great place to start. First impressions matter. Help visitors answer the question, is this firm for me?
But your website is only the beginning. You need to make that all-important expertise visible to the outside world. How? Publications, webinars, workshops, speaking engagements. How about video? The list goes on.
The point is you need a plan to turn the strategy into a reality. Then you need to build the tools to make that plan happen.
- Tell the world.
Now it’s time to tell the world, or more specifically your target audiences, the story of your firm. Implement the plan. Track your efforts and their impact. Monitor the new business pipeline. Then test and adjust. The message gets better and the brand gets stronger each time you make results-driven adjustments.
Evaluating Your Differentiation Strategy
The research on evaluating a differentiation strategy is still evolving. However, we’ve learned some important things already. For example, we know that highly visible experts accelerate the growth of a firm by 1) attracting new leads and 2) making it easier to close them as clients. We also know the fastest growing, most profitable firms use strategies and marketing techniques that raise the visibility of their expertise.
A well-thought-out differentiation strategy and a commitment to implementing your plan will accelerate your firm’s visibility and perceived expertise. Figures 1, 2 and 3 show the average increase in visibility, perceived expertise and new business leads experienced by firms that went through Hinge’s Visible Firm program, which is based on the principles we’ve outlined in this article. These data will give you a feel for what is possible when a comprehensive differentiation strategy is fully implemented.
Figure 1. Increase in Visibility
Figure 2. Increase in Perceived Expertise
Figure 3. Growth in Online Leads
These are certainly impressive results and they speak to the pivotal role that a differentiation strategy can play in the growth of a professional services firm.
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No matter who you are and what you sell, the success of your business relies on your ability to engage with two critically important groups – the people who buy from you and the people who work for you. At Fulcrum, we create truly personalised incentive programmes that have the power to energize your business. Each Fulcrum initiative is designed around the specific interests and aspirations of your customers and your people. We engage and inspire the people that matter – the people who power your business.
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Client- centricity and the provision of quality service are key values. Providing a developmental and supportive marketing environment for our staff and recognising the importance of our suppliers are integral to our business ethic. Openness, honesty, transparency and a commitment to our community underpin everything we do.
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The heart and soul of what has made us so successful is our staff. It is their passion, commitment to quality and positive, can-do attitude that delivers outstanding performance to our clients and reinforces our reputation for service excellence.
From selection & recruitment through to training & development, we continually invest in our staff to ensure we have the right people, with the right skills to make sure that the job gets done right, first time.
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Fulcrum has always aimed to be quality leaders in our industry. An impressive array of accreditations, for Quality, Environment, Security and Staff development are simply the kite-marks that demonstrate our core values in this respect.
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Over the years we have worked with agencies of all sizes and styles. We understand the hectic world of marketing and advertising and we have developed services specifically designed to adapt to short lead-times, changing needs, last minute requests and the occasional ‘sprint finish’.
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With a long-history of providing services to retailers, whether major chains or small specialist outlets, it was a very easy step for us to adapt that to the on-line world. These days we can handle high-volume fulfilment for direct-to consumer on-line web-orders as we can easily provide retail replenishment and store refurbishment.
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We inspire the people who power your business.
No matter who you are and what you sell, the success of your business relies on your ability to engage with two critically important groups – the people who buy from you and the people who work for you. At Fulcrum, we create truly personalised incentive programmes that have the power to energize your business. Each Fulcrum initiative is designed around the specific interests and aspirations of your customers and your people. We engage and inspire the people that matter – the people who power your business.
Our Values
Client- centricity and the provision of quality service are key values. Providing a developmental and supportive marketing environment for our staff and recognising the importance of our suppliers are integral to our business ethic. Openness, honesty, transparency and a commitment to our community underpin everything we do.
Our Team
The heart and soul of what has made us so successful is our staff. It is their passion, commitment to quality and positive, can-do attitude that delivers outstanding performance to our clients and reinforces our reputation for service excellence.
From selection & recruitment through to training & development, we continually invest in our staff to ensure we have the right people, with the right skills to make sure that the job gets done right, first time.
Quality
Fulcrum has always aimed to be quality leaders in our industry. An impressive array of accreditations, for Quality, Environment, Security and Staff development are simply the kite-marks that demonstrate our core values in this respect.
Fulcrum Agencies
Over the years we have worked with agencies of all sizes and styles. We understand the hectic world of marketing and advertising and we have developed services specifically designed to adapt to short lead-times, changing needs, last minute requests and the occasional ‘sprint finish’.
Retail
With a long-history of providing services to retailers, whether major chains or small specialist outlets, it was a very easy step for us to adapt that to the on-line world. These days we can handle high-volume fulfilment for direct-to consumer on-line web-orders as we can easily provide retail replenishment and store refurbishment.
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CREATING COMMUNITIES WHERE PEOPLE ARE EAGER TO LIVE AND RELUCTANT TO LEAVE
We define and position apartment homes for success. We are passionate about the residential experience and the qualitative and quantitative points that drive us to make strategic decisions that inform what a home should be — specific to its marketplace.
Results are realized through both the speed of lease-ups and financial performance of the on-going stabilized investment.
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We crunch the numbers, ask the questions, assess current trends and forecast future trends with detailed, up-to-date research to understand our markets; Ensuring our clients have the right data points to make the best decisions going forward.
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What’s the experience living here? What’s the story and name of this place? Our experience and insight allows us to identify and position each project’s distinctive offerings as its market niche. We provide an understanding that goes deeper than looking at trends. We create sought-after, thoughtfully executed apartment communities that are compatible with their surrounding neighborhoods.
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CREATING COMMUNITIES WHERE PEOPLE ARE EAGER TO LIVE AND RELUCTANT TO LEAVE
We define and position apartment homes for success. We are passionate about the residential experience and the qualitative and quantitative points that drive us to make strategic decisions that inform what a home should be — specific to its marketplace.
Results are realized through both the speed of lease-ups and financial performance of the on-going stabilized investment.
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We crunch the numbers, ask the questions, assess current trends and forecast future trends with detailed, up-to-date research to understand our markets; Ensuring our clients have the right data points to make the best decisions going forward.
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What’s the experience living here? What’s the story and name of this place? Our experience and insight allows us to identify and position each project’s distinctive offerings as its market niche. We provide an understanding that goes deeper than looking at trends. We create sought-after, thoughtfully executed apartment communities that are compatible with their surrounding neighborhoods.
| MARKETING STRATEGY Overall success relies on a thoughtful marketing strategy. In a constantly changing environment, we develop and implement each marketing initiative specific to your audience and budget. Reaching consumers in a way that educates and informs; ultimately creating product desirability and excellent rates of return. | |
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CREATING COMMUNITIES WHERE PEOPLE ARE EAGER TO LIVE AND RELUCTANT TO LEAVE
We define and position apartment homes for success. We are passionate about the residential experience and the qualitative and quantitative points that drive us to make strategic decisions that inform what a home should be — specific to its marketplace.
Results are realized through both the speed of lease-ups and financial performance of the on-going stabilized investment.
MARKET RESEARCH
We crunch the numbers, ask the questions, assess current trends and forecast future trends with detailed, up-to-date research to understand our markets; Ensuring our clients have the right data points to make the best decisions going forward.
MARKET POSITIONING
What’s the experience living here? What’s the story and name of this place? Our experience and insight allows us to identify and position each project’s distinctive offerings as its market niche. We provide an understanding that goes deeper than looking at trends. We create sought-after, thoughtfully executed apartment communities that are compatible with their surrounding neighborhoods.
| MARKETING STRATEGY Overall success relies on a thoughtful marketing strategy. In a constantly changing environment, we develop and implement each marketing initiative specific to your audience and budget. Reaching consumers in a way that educates and informs; ultimately creating product desirability and excellent rates of return. | |
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