We would flatter ourselves to believe that even occasional readers know we believe fervently in basing our work on data and research, not just hunch and intuition.
So we warmly welcomed it when PwC’s often useful “strategy + business” published a little bit ago an article with the title of this column addressing what firms that find themselves “caught in the undifferentiated middle” to can do to connect with their customers. Think that a “connection” with your clients is a loosy-goosy nice to have? According to a large scale survey they did (15,000 respondents in a dozen countries), people would pay a price premium of 16% for a superior experience as a client.
Yes, this study covered retail consumers, not B2B, but consider (a) people are all human, and we prefer doing business with people we like in a pleasant interaction; (b) all successful marketing has rational and emotional elements; and (c) industries covered included healthcare and financial services, so PwC is not just talking about visiting the (increasingly forlorn) mall or shopping online for paper towels or lawn mowers. Back to the data.
What does a “superior” experience mean?
The top-ranked attributes in terms of importance were:
- Efficiency (damn, did they have to rank that absolutely #1?, you may be exclaiming)
- Interacting with people who are “knowledgeable” (yay!) but also (in a tie) “friendly” (hmm….)
- And dealing with people who are “human” and who “personalize it.”
How do you know what your firm might need to do if you fear being lumped in the “undifferentiated middle?”
Start by engaging in a cold, calculating, hyper-realistic analysis of where you are. PwC identifies four handy possibilities:
- Differentiators have both a differentiated brand strategy and effective operations.
- Visionaries have a differentiated strategy but fall short on operations.
- Doers have effective operations but are in need of a cultivated strategy.
- Hopefuls need both a differentiated strategy and effective operations.
Rephrasing this a bit to suit Law Land, a “differentiated [brand] strategy” means your firm is a destination for something in particular; when a client is need of that particular type of service or practice specialty, you should by rights be on the short list. Not being differentiated means you-know-what.
Similarly, “effective operations” means your firm is superb at (a) producing work efficiently, (b) (project-) managing it consistently, predictably, and transparently; (c) pricing it fairly and without surprises; all while (d) guaranteeing top-caliber quality.
Suppose you’ve gone through this exercise and accurately identified where your firm fits on this conceptual map. Now what?
Now this, basically:
Is this beginning to look like real work?
The good news is it should be worth it. PwC says it analyzed 20 widely known consumer brands and found the “differentiators” had by far the highest five-year CAGR of revenue at 10.9%. The hopefuls brought up the rear at 1.7%.
Is a differentiated brand more important than slick operations, or vice versa?