The need and the reason to standout in the crowd.

"I can do this, that and that for you" is a typical sales pitch from most. Often you find slogans like the "Complete Solution", "A one stop shop" and ever so frequently the vendor in front of you promises you that he can handle any requirement of yours.

I think for various reasons companies broad base their services, specially small and medium companies. For instance a chartered accountant likes to do everything, register a company, audit the accounts, maintain the accounts, do all the filing etc. etc. Very rarely do you find a chartered accountant who says that, "I specialize only in Internal audits, I have lot of special tools and skills that can be brought to the table and add a lot of value to the client."

I think there is a reason for this "broad basing" of services. Customer acquisition is so tough that once a customer is acquired one wants to fulfill all his requirements, whether on not one is best at fulfilling these requirements. The customer too trusts this one supplier and would rather go with him because of this positive relationship than try someone else out, even if he might turn out to be much better skilled in providing this service. In any case the other vendor too is pitching "I can do everything for you." So a known devil is better than an unknown angel for the customer.

There is however another approach, that of specialization. Which brings with it a lot of advantages both from efficiency and marketing angles.

A good example I can think of is Cbeyond who specialize in creating Newsletters, for their clients internal or external communication purposes. Now typically if one had a newsletter requirement one would go to the regular advertising agency and most probably they would create one, after all they have a team of creative writers, graphic artists, and presumably they have all the skills to put together a newsletter. However Cbeyond often is able to better what a regular advertising agency can do and the reason is focus. Cbeyond has developed skills and technology for catering to newsletters and therefore because of this focus you can expect them to be more effective in the newsletter business.

Specialization leads to efficiency in the way manpower is utilised, activities become replicable and predictable and therefore lead to better quality. Specialization also allows for investments in skills, technology and processes which otherwise would not have made sense to make.

Whats even better is the company gets a unique identity which people can talk about. So a lawyer is one thing but being a ‘Real Estate lawyer" or "Lawyer who makes Wills" is much better both from organisational efficiency plus marketing efficiency.

So what if the customer wants you to do more? More than what you said was your specialisation? Well do it if it can leverage your existing skills. However another approach could be to partner with other firms who could complement you and pass on the business to them. They in turn would do the same to you. If nothing else it frees your time to become best at what you are focusing on.

Earlier being super specialized might have been difficult to pull off. The way communication happened between people prevented information to quickly flow to a lot of people. Today however we are part of a much more interconnected world. For instance today I saw a message in my yahoo groups "Do you know of a good Trade Mark lawyer." and the message got responses on people who specialised in Trade Mark law. Earlier the person would have gone to his regular lawyer and got his trade mark related work also done. This  is nothing but the Internet business jargon "Long Tail" the Internet and specialist media have made it possible to reach out to customers with very unique needs, and with that one can actually specialize in unique niches. "Search"  has again made this a lot more possible. So if you are just a lawyer you are likely to get lost, a specialist will be found much faster.

So there are two approaches to make a success out of all this, "Have a few customers and do a hell of a lot for them."  This model is based on "Relationships and closeness". The other model is to have a  few unique services and have a huge base of customers. "Specialization and Scale"

An example more personal is the person who maintains our computers. He is into everything as far as our networks and computers are concerned. We know that he is not an authority in any of these but he is the best in the way that he understands our needs and responds to our service requests. He in turn depends on the specialists and large companies for providing him the right tools, and expert support so he can solve our problems. We feel very guilty if we buy a computer from somewhere else.

The specialist can grow in scale and gain from scale efficiencies. He has the ability to gain a lot of customers because of his uniqueness.  Seth Godin (Author of Purple Cow) has a nice way to put it, "Is your business remarkable?" Do people "Remark" about it. The word about a specialist spreads  faster. In an inter connected world only the specialist can own a "search word."  So what is the "search word" for your business?

The author is Chief Catalyst of Businessgyan. He is an alumni of IIT-M, IIM-B. His areas of interest include business strategy & innovation. Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Issue BG74 May07

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