Earlier this month I had the honor of serving as the morning keynote speaker for PRGN’s semi-annual member summit in Toronto. My topic was on the five indicators of new business success that I consistently see in the agencies I work with (and, likewise, the corresponding indicators of agencies that stay stuck in a feast-or-famine cycle).
One of the indicators is a specialist mindset, as opposed to an “all things to all people” approach. This elicited a comment from one of the agency owners in the audience. They tried this specialist strategy at his agency and it didn’t work. It had the opposite effect; they couldn’t find enough new business opportunities to sustain the firm. What did I have to say to that?
Before I tell you how I responded, let me explain that I’m not a specialist hardliner. In fact, this time last year, I wrote about this.
To be sure, I see enormous benefits to specializing when it comes to new business. Pitching for new business is a big investment. The more specialized your pitch, the more efficient your investment. That’s because,
- Generalists seek out clients; specialists are more likely to be sought
- Generalists differentiate based on price; specialists can afford to charge a premium
- Generalists will always be tempted to reinvent themselves to suit the nature of the prospect; specialists find it easier to home in on a consistent message that’s effective for the right audience
But I also don’t see it as a stark choice.
In my piece, I referred to the proverb about the shoemaker’s children who wear no shoes. This is a favorite to describe agencies that can’t seem to take their own advice when it comes to strategic positioning.
But, we never hear how those children turned out. Did they grow up plagued by chronic foot problems? Did they become adults whom you could dress up but never take out?
Or, is it possible they turned out OK?
Maybe they didn’t end up with Harvard MBAs and high-paying jobs in finance like the well-shod kids next door. Maybe despite that, they learned to be happy and prosperous anyway!
In other words, while specialization has clear benefits, if it doesn’t feel right to you as an agency owner, then you should explore other alternatives to cultivate agency growth.
As the agency owner at the PRGN summit pointed out, specializing can also be risky and expensive–just for different reasons. (By the way, I didn’t get to talk to him one-on-one about his situation, therefore I don’t know what the specialty was, the methods they used to find business, or how long they tried to sustain the effort. These are the kinds of questions we explore in my Fast-track Agency Audit workshop. If you’re struggling with similar questions, you might want to talk to me about whether a workshop is right for your agency).
I’d like to offer some hedges against that risk.
Hedge #1: Explore adjacent specialties
When the PRGN member made the comment about specialization not working for him, I followed up with a question: “What did you do?”
His agency explored adjacent specialties. They started with a client for whom they’d done good work (in this case, Planned Parenthood) and identified common themes and issues across marketers in a broader category (in this case, healthcare).
I’d argue that healthcare is still a specialty, just a broader one.
This is one approach: start with a category or service you know really well and expand out, like concentric ripples from a pebble thrown into a pool. Stop when you get to a point where you find you can still articulate expertise, but the potential market is large enough to sustain your strategy.
Hedge #2: Category specialty versus service specialty
The holy grail of agency positioning is the ability state confidently, “we do [the thing you do] for [the clients you do it for],” and then follow up with specific outputs and results. When you find the right point on those concentric ripples, it becomes much easier.
You’re going get your message across to a prospective client faster and more effectively if your focus is narrow. I love to use an agency in South Dakota called 9 Clouds as an example. They do inbound marketing for auto dealerships. That’s pretty narrow and, last I checked, the agency has been extremely successful.
You’ll notice that their positioning statement has two parts: what they do and whom they serve. If the automotive category slumps, it can identify adjacencies and shift to doing inbound marketing for other types of retailers. If inbound marketing loses relevance, they can adapt to offer other kinds of services to auto dealerships.
Specializing in a service as well as a category limits your exposure and reduces the likelihood that you won’t be able to find enough new business.
Hedge #3: Be ready to adapt
Nothing is constant. Things change.
Be ready to adapt when you notice the leading indicators of a contracting business category or a specialized service falling out of favor and being replaced by a new marketing technique. Make this part of your annual year-in-review and planning for the year to come.
Here's something else I said in my post from last year. When you are determining where you belong on the specialist-generalist spectrum, look at it less like a stark choice between one side or the other and more as shifting the cost-to-benefit ratio of new business in your favor.