This is the third and final installment on tests of your positioning: five tests before you make a decision and four tests to see if you need to adjust it later, after you've been implementing it in the marketplace.
- How many prospects and competitors you have.
- Drop and give me 20.
- Can you buy a list.
- Size of employee universe.
- Will somebody travel.
The idea is then to live with your positioning for 18–24 months and then do a quick glance at the results to see if you need to adjust it. Even the best positioning decisions should be examined every 3–5 years, but those adjustments are usually to tighten it up. This examination nearer to the original decision is more drastic than that: you’re asking if you got it wrong, either from insufficient data or insufficient courage.
The better your early decision, the less likely any significant adjustments are necessary. This back-testing is critical, though, because you pause from the everyday flurry of client activity and enjoy that rich experience of thinking about your own business. This always happens better offsite, free of most of the typical distractions and framed in a new locale where your thinking is fresh. Do this early in the morning and then take the afternoon off.
Here are the four questions you ask yourself when you back-test your positioning.
How Smart Are You Getting
The distinction in the wording is intentional, and you don’t ask yourself if you are getting widely smarter quickly. Getting widely smarter is what happens when you take one client engagement after another and have to quickly get up to speed about the issue that this client is facing, and often on their dime. Most of that early learning is spent familiarizing yourself with the “drop and give me 20” insight that you’d be able to apply to similar situations later, if this client engagement flowed from your expertise.
I heard Blair Enns illustrate this once at a conference. He urged the audience to picture pouring a fixed amount of water into a wide and shallow cake pan or into a champaign glass and note the difference in depth. The same amount of water–when you are going deep into a focused area of expertise–will fill your glass more quickly.
Getting deeply smarter quickly builds on past experience to enhance your insight as an expert. If we phrase your expertise vertically, it means that each new client engagement allows you to see the patterns because you’re still working in the same industry. If we applied this to a horizontal positioning, it means that you’re seeing the patterns as you apply your work to the same type of client. This client has an employee engagement issue, just like the last dozens of clients had an employee engagement issue, and I’ll keep applying what I’m learning. It’s like an expertise snowball: Are you building expertise downhill as the same snowball gets bigger and bigger? Advisors who are playing at expertise are picking up lots of small snowballs and throwing them down the hill.
In a properly positioned firm, you are building competitive advantage quickly as your insights grow deeper and deeper. In a poorly positioned firm you’re expending that same energy to get up to speed with each new client. That process might be interesting to you, the so-called expert, but it’s cheating your clients. A very diverse and interesting personal life outside work will keep your expertise grounded within a larger context, but if you expect clients to fund the arts (your learning experiences), it’s not honest work.
“The most meaningful way to differentiate your company from your competitors, the best way to put distance between you and the crowd, is to do an outstanding job with information. How you gather, manage and use information will determine whether you win or lose.” –Bill Gates
I would suggest that his admonition can be applied to insight, too. The more you gather, manage, and use pattern-derived insights, the more likely you are to win. Jack Welch took this a step further when he said: “An organization’s ability to learn and translate that learning into action rapidly is the ultimate competitive advantage,” adding, “If you don’t have a competitive advantage, don’t compete.”
Are you getting smarter really quickly and putting additional competitive distance between you and the substitute “experts” available to your client? If you are, then each new client challenge you face is an opportunity to develop a broader, more meaningful solution that will be applicable over many engagements: “I’m not solving this problem; I’m solving a larger, more broadly found problem that this client happens to have. I’m using this opportunity with a specific client to go deeper with all of my clients.”
Is It Yielding a Price Premium
You could have a terrific positioning, but it’s not really doing its job unless it justifies a price premium. This is critical because you may not feel any urgency about positioning or lead generation as an expert if you are busy.
Being busy is not difficult! If you aren’t regularly busy as an expert, you’re largely incompetent, you have terrible personal skills, you’re suffering a temporary lull, or you’re just starting out. The bar we’re setting here is not the boundary between not being busy and being busy, because it’s just not that hard to be busy. No, the goal is for your positioning to yield a price premium.
Has it done so over the years? Have you consistently generated wealth for yourself (and maybe others) within a balanced life? If you haven’t, stop in your tracks and think through this in three levels.
The first level is pricing high school. This is the stage where you underprice your work and over-service the client (something I talked about here). It’s the “busy” phase I’m referring to. Most experts are stuck here. They are smart enough but they haven’t determined how to monetize their expertise. Frankly, they’re a little surprised that clients pay what they do. There’s a fair bit of bravado and faking it.
The second level of pricing is college. This is the stage where you get paid for everything you do for a client. You’re generally busy and every hour you spend applying your expertise is compensated. This is where most experts strive to get. It’s a comfortable living but it doesn’t alter your family’s generational wealth. It’s an honest application of expertise, generating a fair exchange from mildly sophisticated clients.
The final level of pricing is grad school. At this stage, you never think about hours spent multiplied by an hourly rate. You’ve applied your expertise so frequently in situations that are so similar that you’ve developed a process so unique that new employees would require weeks of training before they could ever trust them to solve the deep problems experienced by your sophisticated clients. Nearly every service is packaged and you don’t customize solutions. You’re the expert, you direct the relationship, and the price is bold and transparent and often paid up front. If you ever calculated the actual hours it took to do the work, you’d be surprised at how efficient you are. You’re an expert and you’ve monetized that expertise to yield a price premium.
Or have you? That’s what you want to ask yourself as you back-test your positioning and your application of that positioning.
Do You Direct The Client Relationship
Have you been directing client relationships? This is a remarkably helpful way to test your positioning after the fact. Your expertise might be deep, but have you monetized it appropriately? When you really need an expert, they tell you how it’s going to be at every step of the way and you’re along for the ride, whether it’s an attorney with high stakes litigation or a surgeon saving your life. You have all the permission power but they have all the process power.
There are some simple ways to determine this. For example, do you have reasonable policies and stick to them? Are you careful about spending time on the phone with a prospect or do you let tire-kickers pick your brain? Do you enforce scope creep? Are payment terms a little stiff to weed out prospects who won’t be serious clients? Does every client get invoiced differently to make it easier for them?
Folks, you are not in the service business! You are in the expertise business, and it’s not just about what you know but how you apply it.
Are you a supplicant order taker or do you direct the relationship because your positioning is such that you don’t need any particular client? If this one client would rather bend the rules and mess up your system, it’s okay for you to say “no” and nod to the next one in line to see how you can help them.
Physicians are a good example of experts who direct the relationship. They give you a brief time to express the problem that’s brought you into the office, but from there forward the relationship is directed. They ask pointed questions. You don’t diagnose yourself. You don’t control the diagnostic routine. You don’t even get to decide the symptoms, because they’ll decide which ones are relevant and which ones are just presenting symptoms. Anything less than this leads to malpractice.
Are you an expert who regularly engages in malpractice? Impactful experts not only know a lot; they also know how to apply it. They direct the relationship, and the extent to which you are doing this—long after the positioning of your expertise has been in place—gives you some indication of its impact.
If you’re an order-taker and not an expert, think about diving deeper to save your clients from themselves. Or let increased marketplace demand raise your confidence level, slowly, as you translate demand into an expertise that can be exchanged for wealth.
Is A Positioning Defendable
Finally, as the last back-test, has the positioning of your expertise withstood the test of time? Yes, it will require modification as your marketplace changes and as your expertise deepens. If anything, your expertise is more likely to be narrowed over time as your personal life becomes broader. Your expertise unearths even more insightful data and your ability to analyze deepens. All the while, you have more time and money to broaden your outside perspective to put that expertise into context.
This is particularly true of the marketing field where there are few barriers to entry. In this case, there will be a steady stream of new entrants who will naturally nibble at the edges to supplant your position. But the positioning decisions that you make around your expertise should last for years and years. In that process of time, you are engaged in “getting to know” more ways to help your clients.
When I started an advisory firm in 1994, I was still delivering on a nine-month resident consulting gig. I knew it wouldn’t last and the terror of finding new and better clients was overshadowed by how excited I was to build a real consulting practice. Direct mail was the best way to kick start something like that, but there was one challenge around beautiful offset printing: it was expensive and unalterable. You had to think carefully about what you wanted to say, unlike presentation decks of our day when you can change your positioning to tailor it to the audience. I was in love with the process of elegant design and the sight of box upon box of beautiful materials wafting the smell of fresh ink was intoxicating. The terror was in what exactly to say. And of course, how to have it designed in a timeless way so that I’d get the most from the investment.
I am still passing those pieces out at seminars, decades later, because the positioning of expertise is largely the same and the vehicle is largely timeless.
There should be a timelessness about your expertise, with tweaks along the way to acknowledge where a market has headed or how the services through which you deliver your expertise have changed. But if you look back on the positioning of your expertise after two years and it doesn’t seem all that compelling, it’s almost certainly because one of these two things: either your expertise wasn’t all that fully developed in the first place or you didn’t have the courage to stake a claim. You used a shotgun to spray and pray rather than a sniper rifle to be very specific about what opportunities you wanted to hunt.
Here we are, then. The nature of your expertise is clear. The positioning you’ve carved out to apply it to a marketplace has passed the important tests: the five at the outset and the four after the fact.
You’ve now won the biggest battle your firm will face: what you do, who you do it for, how to find them, and what to say to them once you do find them.