Brand differentiation. Why professional service firms need it to grow.

In established sectors, brands grow by taking share from someone else. So brand differentiation – being different and better for your target customers – becomes a critical success factor in any business strategy. In professional services, rainmaking partners and marketers know that brand differentiation is crucial in winning new clients.

However, brand differentiation is a tricky topic in professional services because the marketplace is extremely crowded, and at face value, many firms feel that they offer near-identical services to their peers. So how can they differentiate?

In the consumer branding world, as competing products and services have generally become much better and more similar, the focus of brand marketing has shifted from a focus on a ‘unique selling point’ to something more like a ‘unique selling personality.’

Brand differentiation is now about defining and projecting a differentiated brand narrative– a combination of features and attributes that are woven together into a single, coherent story. Instead of the differentiation being about ‘feature X’ the whole package is differentiated.

This is how professional services should think about brand differentiation as part of their business growth and marketing strategy.

Sticky stuff

Often in my work, something comes to me that seems so obvious when I notice it, but until then was hidden — from me at least — in plain sight.

I speak to the clients of premium professional service firms all the time, and it struck me that the vast majority of clients really like and value the firms and people they work with. “Super smart people who do a great job for us” is a typical comment.

In this cauldron of intense competition, just turning up, being competent, isn’t enough; you need to be different and better to win.

When I thought about it, almost all of the clients of all the firms I’ve ever worked with say this, which is great for the individual firms of course, as it means their relationships are’ sticky’ and next year’s revenues start with a serious amount of momentum even if technically very little is guaranteed.

What struck me was that this ‘firm-by-firm’ stickiness means that overall, only a small fraction of the market is actually up for grabs in any period as the vast majority is, in reality, happily ‘stuck’ in excellent circumstances.

So if Firm A wants to grow faster than the natural inflation rate of the sector they will have to beat Firms B-Z to the prize of some of the small fraction of the market that is actually in play this year. That’s why pitching for new work sometimes feels like feeding time at the zoo; everyone develops sharp elbows and puts on their best game-face. In this cauldron of intense competition, just turning up, being competent, isn’t enough; you need to be different and better to win.

But how can you project a differentiated brand if in reality your product or service is just about identical to the competition? How do you dislodge the incumbents by saying “hey, we’re just as good as them”?

The answer is to think about finding differentiation in your brand narrative, not in the features of your products and services. Branding has evolved this way, but still, in our heads, there’s a tendency to hark back to the days when some things were just ‘better’, and some were ‘worse’. Maybe too much box-binging on Mad Men?

What’s so special about you?

When marketing and branding became part of our everyday landscape, life was more straightforward. Products and services were different, and those differences could often be identified and even measured.

Volkswagen built a brand on being more reliable when many cars weren’t, Volvo focused on safety when their vehicles were measurably ‘safer’ in crash tests, BMW focused on performance when BMWs were faster than their rivals.

Today, however, in many or most sectors, it’s almost impossible to build a brand on differentiated features (USPs) because everything is the same.

Brand marketing has shifted from a focus on a ‘unique selling point’ to something more like a ‘unique selling personality.’

Today, all new cars are ‘safe,’ all new cars are ‘reliable’ and all new cars are ‘fast,’ so these USPs which were once genuine have evaporated. Now VW, Volvo and BMW have evolved their brands away from a focus on product differences to a differentiated brand narrative – often built on top of the old USPs but not so reliant on them.

Today BMW has developed a highly sophisticated and valuable differentiated brand narrative that combines attributes such as German-engineering kudos that Audi and Mercedes share, with ideas of performance, handling and speed that are more true to BMW’s heritage. This brand narrative is carefully designed, projected and maintained among potential customers without relying on any measurable USPs or even measurable ‘proof points’ of product differentiation.

A critical feature of modern marketing and differentiated brand narratives is that it’s essential that the brand narrative taps into something that already exists in the minds of your target customers – an archetype you might say – which makes it possible to communicate what might otherwise be an incredibly complex set of ideas that make up your brand narrative.

Ralph Lauren’s preppy brand narrative taps into an idea that mostly already exists. The idea of Apple as the maverick, creative genius in a world of engineers, captured in the line “think different,” is an idea that existed before and beyond Apple. They leverage it, they own it in their field, but they didn’t invent the archetype, that already exists, often unconsciously in our heads.

In the world of professional services these days, all premium firms are amazingly good at what they do – it’s a qualifier for survival – smart people, deep experience, excellent track record.

There are admittedly a few areas where it is just about possible to be ‘the leading global expert in X,’ but it’s increasingly rare and usually pretty niche. Those firms that can grow faster than the market go further, projecting a differentiated brand narrative that sits on top of their excellent services.

To define your brand you need to combine your natural strengths with a sense of where the future lies.

McKinsey, Goldman, Arup, Kirkland are familiar examples, among many, of professional service firms that have developed differentiated brand narratives that are established in the market and give them a significant advantage over their otherwise near-identical competitors in the feeding frenzy of a competitive pitch.

The key to each is that they are authentic. From the first impressions at a distance through to the up-close ‘beauty parade’ and the Q&A afterwards, the partners of these firms can live up to the ideas in their brand narratives and effectively communicate them through stories and anecdotes in a compelling and ultimately convincing way.

Be yourself – only more so

How does a firm, that’s great at what it does but doesn’t have a clear sense of what its differentiated brand narrative is, do to develop one?

A great place to start is what you do well already. It may not be in clear focus or well-articulated, but if it’s going to be authentic, then it must already exist in part. Talk to your rain makers, your existing clients and your prospects and contacts. Listen hard for elements that can contribute to your narrative, but be careful how to interpret what you hear. Your difference isn’t your people.

Your people are great, if they weren’t you’d have a big problem, (great = smart, responsive, helpful, etc.) but almost all people are great, and nearly all clients think their lawyers, accountants, consultants are great – but they’re not entirely objective when they say this.

It’s a bit like doing market research by standing inside a Walmart/Tesco store with a clipboard and discovering that almost everyone you interview prefers Walmart/Tesco to other supermarkets. What’s the chance of that?

To define your brand you need to combine your natural strengths with a sense of where the future lies – growth, change, innovation, margins – and develop a compelling brand narrative that is both authentic and ambitious.

Apple’s maverick, ‘artist in you’ brand idea is authentic and exists inside the company in a way that initially IBM and now Samsung can’t beat them on. Their brand is sustainably differentiated even if their products aren’t. They still have to be cutting-edge in product terms to compete, but the differentiation is not riding solely on a differentiated product proposition.

Blackberry was always a product-based brand (the USPs of its platform security, and for a while its keyboard), so when many rivals matched these USPs in such an intensely competitive market, the brand had no narrative to see it through, and people abandoned it overnight.

Critical element

Brand differentiation is a vital part of a professional service firm’s business and growth strategy. Done well, it creates a set of positive expectations that give your teams a competitive advantage ‘tailwind,’ and helps answer the tricky, “what’s special about your firm?” question at the end of the pitch meeting.

Rather than search in vain for highly differentiated features to focus the brand on – USPs – professional service firms should develop a differentiated brand narrative.

One that already (partly) exists in the minds of your target clients and can be attached effectively to your brand.

One that you can build into all aspects of the way the firm projects itself to the market, from the ‘at a distance’ communications put out, right through to the face-to-face, pitches and proposals created to win new work and new clients in competitive situations.

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Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.