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“It’s very hard for firms to differentiate themselves from each other – they all become the same. It’s often only the accent of the person I’m speaking to or the logo at the bottom of their presentation that’s different.”
Every consulting firm likes to think it’s special; many believe they’ve got a distinctive position in the market, but this comment, from a senior Saudi client, says it all. Even hardened clients find it difficult to tell firms apart.
And you don’t have to take our (or your clients’) word for it. A couple of years ago we surveyed the marketing functions of around 100 firms, ranging from the quite small to the very large. For Tier 4 firms (with fewer than 50 consultants) differentiation really isn’t a problem: by definition, niche firms focus on a very specific area so it’s easy for them – and their clients – to know what’s distinctive about them. But as a consulting firm grows, that gets harder – to the point where 100% of the Tier 1 firms we surveyed (with more than 1,000 consultants) say that differentiation is the biggest challenge they face.
It’s not hard to guess the reason: big firms tend to be more diversified and have a much larger client base, so different clients only tend to see the aspect most relevant to them and that tessellation of perceptions becomes confusion when you roll it all up together. As a result, clients become unsure what a firm does well, especially if it’s claiming to do everything, at a time when they (clients) are looking for increasingly specialised skills. To quote our Saudi client again: “We’re no longer hiring consultants for general projects, but for very specific pieces of work. Before, we would hire a consultant and say, ‘tell us what to do’. Now, we hire them and say, ‘We want to do this; tell us how.’
Of course big firms argue that all this changes when a client gets to know them well, that their experience of working directly with them will be different to that of working with their competitors –more accountable, more client focused, better able to deliver, etc. That’s all true, but it doesn’t solve the problem because it’s the people, not the firm, that are different. Just because you’ve got the smartest people doesn’t mean that you’re seen to be the smartest firm. Just because a client works with someone who’s really good at – say – skills transfer it doesn’t meant that they believe that the firm as a whole is going to be good at it. They just think they’ve been lucky. Research we’ve done with consulting firms over the last couple of years suggests that, for the characteristic of an individual consultant to differentiate a firm, three quarters of the firm’s consultants have to exhibit the same characteristic. 75% seems to be the tipping point where the halo effect created by the majority obscures the failings of the minority – if three out of four consultants they encounter are good at skills transfer, clients actually forget that the fourth wasn’t.
So the key differentiation isn’t difference. It’s consistency.