Don’t make your brand your prison, but equally, avoid spreading your expertise too thin.
People probably don’t realise that law firms have products. They normally think of lawyers as people who fill in time sheets and bill them monthly.
I recently came across a law firm where the partners themselves didn’t realise the importance of product definition and market segmentation. They were making the mistake that so many businesses make, and which prevents them from growing.
They were all things to all people and provided a range of products from domestic conveyancing services to litigation in complex matters and all stops in between. They couldn’t understand why they weren’t making money.
We identified one area of the law in which they had special expertise and one partner had wide recognition in that area of the law. This indicated that not only did they have a product but you could identify the precise market segment to which that product had appeal.
To their credit, they took the plunge and tossed out all the other stuff and referred clients to other firms, but went single-mindedly for that one market segment in the area that they knew best. The results were and continue to be staggering growth.
I see so many businesses that reach a plateau of growth. Management then feels that the way to continue to grow is to make whatever sales they can even though they might not be as good in one area as another. What they don’t realise is that if they just stuck to what they are good at and rejected the opportunity for sales in areas where they didn’t have as much expertise, a few trump cards would fall their way.
The first thing that happens if you stick at what you do best and resist the temptation to get into things at which you aren’t so good is that you get a reputation much more quickly for being good in your speciality. This is what we call “branding”. You develop a brand image whereas, if you are all things to all people, you are in the mix with so many competitors.
The next trump card is that you get to know your market segment, which means that is it much easier to identify and reach that market. You only have to concentrate on reaching one particular market segment. The cost of advertising is lower and the return on advertising investment is much higher.
It becomes a virtuous circle. The more you concentrate on your speciality, the more recognition that you get for that speciality, the more customers you get and the faster you grow.
There are a couple of caution signs. Even when businesses discipline themselves to their market segment, they sometimes don’t manage growth as well as they could. They take more orders than they can satisfy, with the result that they damage the brand image and all the good work done in building the image can be seriously compromised.
Another mistake that businesses make (and this includes very big businesses) is that once they establish a brand image, they can “leverage” that image. What do we mean by “leverage”?
Take the case of Makita, the well- known world-wide manufacturer of power tools. It has a great reputation in the power tool industry almost to the point “you can’t get fired for buying Makita”. So Makita decided to bring out a line of industrial clothing called something like “Makitawear”.
Guess what? There were plenty of people in that market with brand recognition for specialising in industrial clothing. Ever hear of “King Gee”? I think that you won’t see too much “Makitawear” today.
I know that it is pretty corny stuff and everyone tells me that they know about “market segmentation”, but my experience is that many companies that have stalled have lost touch with their roots and have forgotten how important it is to understand your market and respond to its needs.
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