How Geography Impacts Positioning

One of the reasons I absolutely love helping firms with positioning is because of the science behind it. I didn’t realize there was so much science until penning the fifth book (The Business of Expertise), but in researching that book I stumbled on all sorts of things. One of the key ones is the sweet spot for competition: you need some competitors but not too many. In other words, there’s a minimum and maximum number that serves as a guardrail on either side of the road.

The other thing I like about the science of positioning is that it’s not as intuitive as you might think, and that’s what we’ll cover in this week’s missive.

How We Got Here

But first a little quick history to put this in context. Years ago, every firm had somewhat of a geographic moat around their territory. This protected them because it was quite difficult for a firm to do business far away. There was an expectation that business was done in person, and so a firm in a 50,000-person city, for example, just made do with whatever clients were nearby. That meant that every firm had to be a generalist firm because you couldn’t survive on local clients if you were specialized. I honestly don’t think our industry understands this history and how devasting it’s been for our growth. (The other thing that changed is that the world became far more complex: too complex to thrive as a generalist unless you’re just going to be happy with average pay for average work.)

But then came the internet…and a different expectation about conducting business. Not only could we serve clients outside our protected market, which was great news, but suddenly we had hundreds…thousands…of competitors who would reach into our market and take our clients. Not good news.

Our (Generally) Poor Response

How did we respond? Smart firms specialized. For example, maybe you became a firm that specialized in [something] and just happened to be located in Des Moines. And firms who were lazy, terrified, not smart, resistant to change, or just gullible, or a dozen other things did just the opposite: they opened their arms wide in the hopes of making themselves more attractive, relying on one or more of these silly things:

• We have better people.
• We have better processes.
• We are more fun or irreverent.
• We are faster.
• We are cheaper.
• We’ll do anything you want.

None of these were verifiable by the prospect, by the way, and they come across as tired and desperate. The other thing that happened is that principals always had a big, famous firm that they wanted to emulate, and that firm was never narrowly focused, so they thought that they didn’t need to be, either. IDEO, anyone? (I’ve worked through that fallacy elsewhere so I’ll not explain it here.).

But back to geography, and here’s where I’m going to introduce a non-intuitive concept that’s absolutely true.

The more geographically isolated you are, the more important it is to be tightly focused.

That doesn’t seem like it’s right, but it is. What seems right sounds more like this: “the more geographically isolated you are, the broader your positioning needs to be so that you don’t starve.” But what that fails to recognize is how the prospect views the possibility of hiring a small firm in an out of the way place: it’s a risk. There are many ways to counter that risk, but (other than cheaper, faster, etc.) the only viable way to justify the risk on the prospect’s part is that you really know what you are doing and everything about your experience screams that: your tagline, your client base, your case histories, your insight, and so one.

Let’s flip this around and look at the firm in a population center: you’re more likely to get away with sloppy positioning because you have a lot more prospects who are willing to give you a chance: you’re around the corner and so why not.

The Bottom Line

We’ve been talking about your locale, but we could say the same thing about your firm’s size, too. I’ll just state both of these points succinctly:

There’s an inverse relationship between the importance of tight positioning and two things—the size of your firm and the remoteness of your location—because both of those factors are considered risks in a prospect’s choice.

Are you a bigger firm in New York City? You might get away with sloppy positioning. Are you a smaller firm in Tucson? You’re destined to be a very average firm if you don’t make the courageous choice(s).

Extra Credit Weird Stuff

That’s the end of this week’s lecture (and the crowds sighs a “thank you”). But if you’re interested in going a little deeper into this geographic thing, there are some specific positioning choices that won’t work in some places. For your amusement, I suggest:

• Fashion in Little Rock
• Tech in New Orleans
• Healthy Foods in Memphis

And then there are other choices that are just logical. A few to illustrate this:

• CPG packaging in Cincinnati or Chicago (FMCG for you folks across the Atlantic)
• Publishing in New York
• Entertainment in Los Angeles
• Startups in San Francisco
• Energy in Houston
• RVs and Orthopedic Devices in Northern Indiana

And then there are always a few surprises. When people think of Nashville, where we live, they are more likely to think of music, but the truth is that we are the center of the world for healthcare. No other city comes close.

And finally, for the truly nerdy among you, take a look at PGI (protected geographical indication) and TSG (traditional specialties guaranteed) and PDO (protected designation of origin) products. This is all legal stuff that doesn’t apply to us (wine, cheese, beef, etc.), but it’s another interesting twist on geography.

Need Help?

If we can help you with positioning, just let us know. I’ll be gentler than I have been in this note.