I’ve been out of town the past few days meeting with a couple of “good size” market research firms.
While the websites of both firms would suggest that they can (and do) conduct research in virtually all of the common vertical industries, the fact is that each of them DO have a specialty – on or two verticals that account for at least 50% of their business. Yet, they are reticent to promote themselves as specialists. Why?
The biggest reason is that they are afraid that they will lose the business from the other verticals. And they may be right. There was also some concern that, in the future, they may be less attractive as an acquisition target if they focus too much. And that might be right, too. But let me make a few arguments FOR focusing your business:
- It brings clarity of thought to all of your decisions. Let’s say you decide to focus on the Pharmaceutical industry… then questions like what conferences do we attend, in which publications do we advertise, what business ‘partners’ do we align ourselves with, etc. all become so much easier to answer. That is, if they don’t support your growth in the pharma industry – don’t do it!
- You can become a very targeted thought leader. If you don’t focus, then your expertise will have to be pretty broad and perhaps not very deep. With focus, you can really drill down. For example… your expertise wouldn’t just have to be about ‘using online bulletin boards’ but could become ‘using online bulletin boards for at-home pharmaceutical testing.’ Much deeper… much more valuable.
- And regarding acquisition, while some suitors may be turned off by your new-found focus, it will open the door to others you had not previously considered – in this case, research firms who want to expand into pharma, ad agencies with a pharma clientele or maybe even a pharma company itself.
- You can charge more for your services. You are no longer competing against other generalists, you’re now a specialist and your services are worth more.
For me, it likes choosing a doctor. Let’s suppose your breathing becomes labored. You could go to your regular family doctor and he or she would probably be able to help you… OR… you could go to a pulmonologist, an expert in breathing issues (for not much more money). Who would you call?
So, should you focus your business? Maybe, maybe not… there are a lot of things to consider. But you should, at least, take a look at the strengths and weaknesses of your firm and the kinds of clients you work with now to start a conversation about it. You never know… bringing focus to your business could give you a strong competitive advantage.