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On to this week. I just turned in my 42nd Practicing Solo interview for NACVA’s Value Examiner. That represents seven years of interviewing some of our profession’s seasoned and new sole practitioners. One question I always ask is “How do you differentiate yourself from large firms?”
And if you’re new here, welcome aboard. This is what we do!
The question I ask when I start every newsletter is the same: does it pass the “So what” test … will what I write help you grow or strengthen your practice in some way.
So, what’s the one thing you’re struggling with most when it comes to getting the kind of work you want? Email me and I’ll try to help … my inbox is always open!
The responses to that differentiation question generally fall into one of two strategies:
- Because it’s just me, prospects know that I will be the one completing the project.
- Because of my lower overhead, I can charge a lower price to get the work.
Note: Based on my experience, these strategies are applied not just by solos but also by smaller valuation practices. And there are insights here for larger and large valuation firms as well.
Because it’s just me
The because-it’s-just-me strategy is the antithesis of “hey prospect, several people are going to be involved in your project … from more junior to more senior as the work progresses … and it will be ultimately be reviewed for a few hours by the partner you first had contact with.”
The because-it’s-just-me strategy can work if we are truly an expert in the industry niche or practice area straddled by the project. Otherwise, it doesn’t matter if we are the only one completing the project if we have never done that type of work before. And if the project is important enough to the prospect, s/he is going to ask for proof of expertise.
The because-it’s-just-me strategy also works if the project, now a case, doesn’t involve thousands of documents (I almost gave my age away by saying “dozens of banker boxes”) that must be reviewed before we can determine what we need to do first. But since we are solos, what if we get swamped … either by this case or by other cases in our pipeline?
Because of my lower overhead
The because-of-my-lower-overhead strategy works if we believe we don’t provide the same value as the big boys, won’t get the same results in the same time frame, and therefore, we’re ok with charging less for the work we do.
The because-of-my-lower-overhead strategy also works if we want to compete on the basis or price (and let’s not kid ourselves … that is exactly what we are doing) and we don’t have any other way to differentiate ourselves.
The because-of-my-lower-overhead strategy is the one I wrestle more with because I certainly charge something less than the big boys, but not significantly so. And if the prospect is willing to pay Large Firm $X, why shouldn’t they pay Small Firm the same amount … IF Small Firm can deliver the same result in the same time frame.
Is the prospect’s outcome worth more BECAUSE OF Large Firm’s higher overhead? Is the prospect’s outcome worth less BECAUSE OF Small Firm’s lower overhead? (When I ask the questions that way, don’t the answers seem obvious?)
And yet this strategy persists.
Own your positioning and messaging
My 4 Pillars of Practice Development model will tell you that positioning is who you serve and messaging is what makes you different. If you want to differentiate yourself from larger and large firms you have to own your positioning and messaging.
What do I mean by that?
Some prospects won’t be for you – clearly, the ones you don’t have the expertise to serve – regardless of whether you’re the only one working on the project or how you price the work. So don’t waste your time with them.
Rather, take the opportunity to actually stand out to the prospects and for the projects that are a fit for you.
What do I mean by that?
Big Firms are aircraft carriers – ungainly, slow-moving ships who can’t speak as openly and honestly as you can because they don’t want to risk turning anyone off.
So don’t play it safe. Aggressively communicate who you serve and what makes you different. How? Try some of these ideas:
- Demonstrate how technology makes you just as capable as Large Firm.
- Price with options to show you are more flexible than Large Firm.
- Cut your report lead time to show you are more nimble than Large Firm.
- Provide a portfolio of your work to show you are more transparent than Large Firm.
- Talk to your client weekly to show you are more proactive than Large Firm.
In short, build a brand that confirms you are a more credible option than Large Firm.
In my opinion, the because-it’s-just-me strategy is much more viable than the because-of-my-lower-overhead strategy.
So don’t try to pursue both strategies.
Because a cheap expert is an oxymoron!
But in reality, the way to differentiate yourself from Large Firm is to actually be different than Large Firm … starting with some or all of the ideas listed above.
In real life
As Ron Baker says: Don’t price the service, price the client.
When price comes up, say that you price every engagement based on the level of skills, knowledge, and experience that you bring to the table.
And remember, you are not small. You are agile and process driven, which allows you to produce consistent, measurable, efficient, and effective valuation solutions.
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