Remember that pivotal moment in high school or college when you had to pick a field of study? For many of us, that was the first time we felt the pressure of commitment. Despite being reversible, it was still a frightening leap.
When that same moment arises years later in business, there’s much more at stake. You know you have to differentiate to gain traction in the market, but you may be afraid to specialize too much as the number of consulting firms continues to rise.
Niching is the new way to propel your consultancy into its next stage of growth in a climate of fierce competition. Let’s explore why — and how to unearth your firm’s specialty.
There’s an undeniable shift taking place in consumer behavior patterns. More and more, people are seeking out products and service providers that speak directly to their experiences and needs.
Think about your TikTok or Instagram feed: It’s full of videos that are somewhat related to your interests, but it’s that one clip that reflects your current mood or interest that compels you to pause, engage and even share.
Consulting clients, in particular, are looking for guidance that’s relevant and effective for their specific pain points. They want to know they’re paying someone who really understands them, not everyone else.
In a market awash with generalists, it’s time to be an expert in your industry.
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The decision to specialize invariably brings along a companion: doubt. You might wonder, “Am I sidelining potential clients?” or “Am I narrowing my revenue opportunities?”
Such questions are understandable, but don’t let them build into a resistance that stops you from reaping the rewards of finding your forte. While it’s true that you’ll be speaking to a smaller audience, the segment of people who are attracted to your specific message are often going to be more qualified and likely to convert.
The goal isn’t to attract every possible client but to provide precise, unique services, increasing the lifetime value (LTV) of each relationship.
Depth is something clients recognize and are willing to pay a premium for. Consider any service provider you’d need in your personal life: an attorney, an insurance agent or a financial advisor, for example. Would you open your wallet for one who serves only your demographic? Chances are, you’d find their competence in serving people just like you makes them seem more trustworthy, especially if they have social proof to back it up.
It can seem counterintuitive to niche down to compete. But because you step into a space with fewer competitors, you can turn more clients into loyal advocates simply because what you offer is unparalleled. This uniqueness makes your marketing campaigns more focused, your message more resonant and your returns more sizable.
To put this concept into perspective, let’s delve into the story of Clayton Christensen.
A Harvard Business School professor, Christensen is a prime example of the power of specialization in the consulting context. He is best known for his theory of “disruptive innovation.” In the 1990s, he observed and described how smaller companies could succeed by targeting overlooked segments of the market or creating new markets, displacing established market-leading companies.
Realizing the value of his insights, Christensen founded Innosight, a consulting firm specifically tailored to helping businesses navigate disruptive change in their industries. By honing in on this niche, Innosight carved out a unique place in the consulting market in the early 2000s, positioning themselves as go-to experts for business leaders struggling to fight powerful competitors.
Related: Learn How to Start a Consulting Business
Follow in Christensen’s footsteps: Use this roadmap to discover which element of your services is poised to stand out and apply it to develop a lucrative path.
First, let your interests and personal drive have a say. The areas that genuinely interest you are probably the ones you’re best at. Maybe your team already has a bit of a combined specialty you can leverage. Intrinsic motivation should be the foundation of your niche.
If it’s been a few years since you conducted formal market research, you might be surprised at what has changed — and how it matches up with the problems you solve. Perhaps your prospects are facing new regulatory challenges or your industry is undergoing rapid transformation. Look for where demand is high but supply, in terms of expertise, is low.
Every consultancy has a history. Use yours to your advantage! Were there past projects where your specialized knowledge turned out to be particularly effective? Sometimes we come across a niche by chance. Shine a light on your previous work to discover a logical area of focus.
Remember that niching down isn’t about becoming stagnant. For niching to be successful, it’s key to remain an undisputed expert in your chosen field. Be ready to invest in professional development for your team and update your own knowledge as needed.
Just as your skillset may need a refresh, so might the way you deliver your services. Listen to your clients to understand their evolving needs, and be willing to refine your offerings. Adaptability, even within a niche, can be potent.
It’s not how wide you cast your net, but how deep you’re willing to dive. Don’t let the fear of missing out on a larger market segment stop you from driving your business forward into its most profitable season.
What else should you do to prepare a specialization strategy? Get to know your clients’ needs inside and out.
