05 Nov Specialization: The pathway to profitability
Your customers are generally a well-informed bunch who take a hard line when it comes to selecting the IT services companies to manage their technology investments, as they should.
These buyers aren’t just investing in your products; they’re investing in you and in the assurance that you can do for them what you have done for others.
More often than not, customers will pay a premium for that kind of insurance policy.
…and then they’ll thank you for helping them sleep better.
Technology purchases are big ones, and when it comes to making a decision that will have such an impact across their business, customers trust authority, and they trust evidence. The companies that get their attention (and their business) will be those that speak from a position of authority, with unqualified expertise and demonstrable proof of performance.
That’s where specialization comes in: you can command authority and demonstrate evidence by doing the one thing for which you are naturally suited, and doing it better than anyone else.
Specialization earns trust; trust earns customers.
A critical strategy for growth
When you specialize, you separate yourself from the pack by:
- Reducing the number of rivals and better insulate yourself from competitive threats
- Attracting and retain better talent
- Commanding higher billable and utilization rates from buyers who are less sensitive to price for effectively differentiated products and services
- Generating greater demand more efficiently, thereby increasing revenue and profit
- Enhancing the value of your company
So, how do you do all that?
The two keys to an effective specialization strategy are focusing on technology and focusing on verticals, so it’s important to identify what combination of these represents your best chance for success. It’s been our experience that the most profitable specialization strategy is single tech/single vertical.