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J. David Sims is the Managing Partner at Security First IT. Today we’re publishing his article about the importance of the industry specialization for every MSP business in terms of revenue growth.
You see the previous IT guy walk out of the sales presentation with your prospect. You’re up next. As you walk into the conference room, you see several people sitting there just waiting to hear what you and your company will be able to do for them. On the table, you notice three other sales proposals. You recognize a couple as your competitors and you know that your offerings are very similar.
After a pretty decent presentation, you’re feeling good about yourself. One of the guys interviewing you then asks, “What makes your company different from the others we’ve interviewed?” You sit up straight and with all the conviction you can find, you say, “Because we’re better.”
The guy looks at you, pauses a few seconds, then asks, “How are you better?” You swallow deep and remember your rehearsed pitch you’ve
been practicing as you say, “We’re better because we have the best people, the best service, and we remotely monitor and manage your systems 24/7. We manage your antivirus, monitor your backups, apply patches, provide remote support and quarterly business reviews. Simply put, we provide everything your business needs for IT.”
The lady sitting across from you just stares at you with a hint of frustration as she says, “So basically you’re just like all the others.”
Congratulations, you just realized that every service you thought was so valuable to your client is nothing more than a commodity. I hate to hurt your feelings, but you’re just not special.
A commodity is defined, among other things, as a mass-produced, unspecialized product. A good or service whose wide availability typically
leads to smaller profit margins and diminishes the importance of factors (such as brand name) other than price.
So how do you actually differentiate yourself in the very cookie-cutter IT service and support industry? One of the best ways is to specialize.
Differentiate vs. Specialize
If you’ve been in business any length of time you’ve probably heard, “Differentiate your business from the competition”. My advice to you is to understand that differentiation and specialization are not the same.
In fact, every IT business has a differentiation it can talk about. You have different staff, maybe different tools, different processes, different owners, different plans, different pricing, different customer service, I could go on and on. No two businesses are the same, so every IT business inherently has a differentiation aspect to it by default.
Specialization on the other hand is not inherent to other IT businesses. Specialization is, as the word implies, special. Don’t ask yourself, “How can my business be different?” Instead, you should be asking, “How can my business be special?” Specialization is a differentiation as well.
Specialization can come in several forms. You can specialize in a product or service, or in an industry, or in a demographic, just to name a few.
Now let’s look at a few reasons why you want to consider specialization.
Easier To Choose
When you specialize, you allow prospects to make easier choices about whether to hire you. For example, if I am looking for a plumber that
specializes in outdoor plumbing. I am much more likely to hire that plumber if my need is for outdoor plumbing, even if other plumbers say they can do the work.
Specialization also makes it easier for you to know where to focus your business, what clients should you market to, and where should you spend your time and money on education and professional development.
Develop Expertise Quicker
Another benefit of specializing is that it allows you to develop a deeper knowledge and understanding of what you’re specializing in. Because you are focused on a few things rather than many things, you become very good at it in a shorter period of time.
Known In An Industry
When you are known in an industry for providing a specialized product or service, you have a big advantage over competitors who are not. Every business that wants more clients has to solve the problem of obscurity. When people don’t know you, they can’t buy from you.
Now that you know a few benefits of specializing in your business, let’s discuss how to specialize. before we do, let me say that no one should tell you what to specialize in. This is something that you should figure out for yourself. If you have little interest or desire to specialized then you will not do well with it. However, if you are committed to the process, it can reap big rewards for your business.
Okay, now let’s take a look at how to specialize.
Go Deep, Not Wide
Instead of trying to be all things to all people, specialization requires that you narrow your focus and then go very deep with your knowledge or skill within the specialization of your choice.
Some examples of this within the IT industry are IT providers that specialize in HIPAA or other Federal Regulation. Another example would be those who specialize in cybersecurity or forensics. Yet another example are those who specialize in a market, such as construction, restaurants, or law firms.
Growing Market
Another thing to consider is the market that you’re going after. You should ensure that the market is growing and not dying. Having a specialized skill set for a dying market will not serve you well in the long run.
Also, make sure that the market that you are targeting can afford the specialization that you are providing. Just because the market needs what you’re offering, doesn’t mean they can pay for it.
Wants vs. Needs
As you think about what to specialize in, you should also ask yourself if your target market wants what you are offering. Don’t focus too much on whether they need it, only that they want it. Prospects rarely buy what they need but they are always looking to buy what they want. Find out what they want and give it to them. After you have established a relationship, then you can start to address their needs. Of course, you don’t want to ignore their basic IT needs over their wants. Use common sense here.
It may sound or even feel counterintuitive to offer fewer services to fewer clients, however, specialization will allow you to better understand your ideal client, make more money, and become a sought after expert in your market.
Not long ago my business partner, Anton Kioroglo, wrote about how we decided to focus on HIPAA, and what that process looked like for us. Check it out, you might find it helpful.
So the next time you find yourself in a sales meeting, I hope you are able to win the deal by easily showing that you can offer the prospect something your competitors cannot… specialization.
Author: J David Sims, Security First IT