Marketing expert Liz Harr shares research that explains what separates highly successful companies from those who are faltering. Hint: Don't be everything to everyone.
What does it take to deliver at least 20 percent revenue growth year after year?
Last month, we released a new study of high-growth firms, including 445 government contractors. We found three key findings from that study that your business can use to improve your growth prospects.
Each of these findings can be folded into a cohesive strategy. And a characteristic of high-growth firms is that they often employ all three.
Strategy 1: High-Growth Government Contractors Specialize
Our first finding was that high-growth government contractors tend to specialize. Interestingly, so do the firms that exhibited little or no growth. The difference was what they chose to specialize in.
As you can see in Figure 1 below, high-growth firms often focus on solving a particular challenge or providing a specialized service. In fact, high-growth contractors were two-and-a-half times more likely to be highly specialized. No-growth firms that described a specialty usually specialized in an industry.
Why does specialization matter? In a related finding, 68 percent of buyers cited specialized skills and expertise as their top criterion when selecting a firm. Specialization implies expertise, and buyers value that.
Takeaway: Try to define an area of focus for your firm. As you do so, consider building it around a specialized service or common client challenge.
Strategy 2: High-Growth Contractors Are Well Differentiated
According to our research, high-growth firms are three times more likely than their no-growth peers to have a strong differentiator.
Differentiation is the way in which a business separates itself from other similar firms. Usually this difference is expressed in the language a contractor uses to describe itself or its services. But there is more to a differentiator than lip service. It has to meet three criteria. A differentiator must be:
And of course, it must be different from most of your competitors. Figure 2 lists the differentiators cited most often by the high-growth firms in our study.
Now, this data begs the question, how can a characteristic that’s favored by over 80 percent of high-growth firms still be a differentiator? After all, isn’t the point of a differentiator to be different?
The answer is that many of the responses in Figure 2 are aggregated and categorized. That means “The expertise of our team,” for example, represents a diverse range of answers that are more specialized than the generic category name implies. A firm that differentiates around its expertise might have deep experience in a narrow discipline, such as conducting insider threat risk assessments or designing secure but welcoming embassy facilities.
Takeaway: Figure out how you are different from your competitors and develop messaging to convey this to your audiences. Make sure your differentiators really are in fact truly different.
Strategy 3: High-Growth Firms Invest in Marketing Techniques that Build Their Visibility and Reputation
While high-growth firms grow much faster than their peers, they actually invest less time and money doing so. That means their marketing is more efficient. Figure 3 lists the 10 most favored marketing techniques of high-growth and no-growth firms.
One thing you will notice is that high-growth firms tend to use more marketing techniques overall than their no-growth brethren. Now let’s look at the five techniques high-growth contractors identified as having the most impact on their business.
All five of these share two characteristics: 1) they build the firm’s visibility, and 2) they leverage their expertise to enhance their reputation.
The top technique, partnership marketing, deserves a little explanation. Traditional partnership marketing is a strategy in which a firm seeks out other firms, associations or organizations that share one or more target audiences with the firm but don’t directly compete with them. The two parties then pool their resources and market jointly to their audience. For instance they might conduct joint webinars or promote each other’s services to their client lists.
In the case of government contractors, however, partnership marketing takes an interesting twist. Often the partnering firms are direct competitors, but because they have different characteristics, they need each other from time to time to qualify for an RFP or comply with a regulatory requirement, such as 8(a) or HUBZone certification.
Takeaway: Don’t waste your limited marketing dollars on timeworn tactics that no longer produce results. Instead, model your marketing on today’s most successful government contractors.
If you are wondering why your firm is stuck in the doldrums while others grow quickly, take heart. There are changes you can make to change your fortunes.
Reposition your firm as a specialist, clearly articulate how your firm is different, and look to the high-growth firms in your industry to uncover what marketing techniques are most effective.
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