The thought that offering a wide range of services will make your business more appealing to potential clients is a common misconception. When in fact the opposite is true. The Benefits of specialisation in business far out way the disadvantages. Especially when you have scalable growth on your wish list.
I’m not one to cause arguments, but …
TODAY I’M GOING TO CHALLENGE SOME OF YOUR BELIEFS AROUND SPECIALISATION VS GENERALISATION.
Just think about it…
You need help with the social media for your agency. Who will you turn to for the best results?
A general do-it-all-but-the-kitchen-sink marketing business, or …a social media specialist?
I KNOW WHAT I WOULD CHOOSE!
The Benefits Of Specialisation in Business
You’ve heard me say before that my opinionated views on specialisation vs generalisation find root in first-hand experience.
I KNOW becoming a specialist holds tremendous potential for your business.
It allows you to establish yourself as an expert. You’ll be known as the expert for ‘Your Thing’, while the rest of the world does what’s considered ‘an okay job’. It differentiates your business from your competition.
As a result …
- you attract high-value clients, people who can see the value in what you do (as opposed to the ones who want to tick a box at the lowest price they can haggle).
- it also makes you more efficient (setting up your operations for growth).
- you can command higher prices for your services.
I’D LIKE TO SEE THE AGENCY OWNER WHO DOESN’T WANT THESE THINGS!
But you shouldn’t just take my word for it.
Let’s have a closer look at some of my above claims.
Benefits Of Specialisation In Business #1: Focused Services Make You More Efficient, (Which In Turn Creates Space For Growth)
I mentioned above that one advantage of specialisation is that you can become a lot more efficient.
That’s because when you specialise, it becomes a lot easier to streamline your systems and processes.
Instead of doing a bit of this and a bit of that and spending time coming up with a new solution for every fresh problem that presents, in polishing your workflow for your specialised services you become very proficient in what you do. You become better and better at it.
That’s a position that allows you to optimise your systems and processes. (Yes, THAT again!) Make them efficient and reliable, turning out high-quality results at a faster rate.
Which, in turn,…gives you space to grow.
I have some hard data to support what this advantage of specialisation.
According to a study by McKinsey & Company, companies that focus on specialised services are 50% more likely to have higher profit margins compared to those offering a broad range of services.
It speaks for itself. When you narrow your service offerings and become the specialist service provider, your business will become more profitable.
"By focusing on a specific service area, agencies can develop specialised processes, tools, and expertise that allow them to work more efficiently. This efficiency translates into shorter project timelines, improved resource allocation, and ultimately, higher-quality deliverables for clients."
Benefits Of Specialisation In Business #2: Clients Will Happily Pay The Higher Price (Which In Turn Creates Space For Growth)
If only I could have more hours in the day and charge more!
GUESS WHAT? YOU TOTALLY CAN!!!
When can you charge premium (value-based) prices?
When you provide expertise.
When do you become an expert?
When you specialise!
Simple as that!
But let’s backtrack for a second.
Let’s keep building on Benefits Of Specialisation In Business #1.
When you have a depth of knowledge and you offer superior outcomes to your clients, you provide unique value.
Here’s the revelation: PEOPLE ARE WILLING TO PAY WHEN THEY SEE VALUE (because, for one, they see a return on their investment). I‘ve seen first-hand how offering a premium service based on value enhances client satisfaction, fosters stronger partnerships and gives me return business.
It puts you in a position where you no longer need to charge an hourly rate, but instead move to a value-based pricing model (which can be up to 3 times as high!).
(Last week we dedicated an episode on pricing models for your agency. You can find it here.)
Long story short, when you can charge value-based prices, you become more profitable without increasing the amount of work you do.
And yes…this undeniably gears your business towards scalable growth!
A survey conducted by Deloitte supports the effectiveness of value-based pricing for specialised agencies.
The survey found that companies offering specialised services and using value-based pricing models have higher profit margins compared to those using traditional pricing methods, such as an hourly rate or a project rate. This data highlights the potential for increased profitability that comes with adopting a value-based pricing strategy.
"When agency owners like you and me become a specialist in our area of expertise and deliver exceptional value to clients, we can command higher prices for our services. Value-based pricing allows us to align our pricing with the unique benefits and outcomes we provide, positioning ourselves as premium service providers."
Benefits Of Specialisation In Business # 3: Specialisation And Flexibility Are A Team (Which In Turn Creates Space For Growth)
This is probably the part that has you confused.
Because you would think that specialisation creates this rigid framework that doesn’t allow you to (dare we say it?)… pivot. To many agency owners, specialisation feels limiting.
And to be fair, that’s where you can take it. But it’s not a situation of one necessarily leads to the other.
Here’s an example of this benefit of specialisation in business from my business event agency.
One of the many things we take care of for our clients is event registration. When I first started, we sent out a PDF document which people completed and returned by email.
Clearly, we’ve moved on from that a long time ago. These days, the cloud based registration options are endless.
It’s one of the more profitable services we offer because we've been able to automate a lot of the work.
But because we are pretty specialised, our understanding of human behaviour with registration has become quite honed-in. With that expert knowledge, we can design engaging online registration forms with lots of conditional logic and automation so delegates feel like it's a personalised experience.
Yes, we’re specialised and our workflows are streamlined, BUT at the same time, because of our expertise, we can create a result beyond what anybody else even realises can be done.
TO THE GENERALIST, IT SEEMS IMPOSSIBLE, YET FOR US… IT’S BUSINESS AS USUAL!
What I’m trying to say is …specialisation isn't about constraining opportunities. Rather, it provides a solid foundation to build upon while still allowing room for flexibility and adaptation.
AND THAT’S THE KEY WHEN YOU BECOME A SPECIALIST!
You no longer do custom work. You don’t start every job from scratch.
INSTEAD you look at the nuances, offer different options within your area of expertise.
After all, we live in a very fast evolving world, and clients need to feel special.
According to a survey conducted by Forbes, specialised agencies that balance their niche focus with the ability to adapt to new market demands experience higher client satisfaction rates and increased revenue growth compared to those that remain rigid in their approach.
"Specialization allows agencies to build deep expertise and establish themselves as trusted leaders in their chosen field. When coupled with a flexible mindset, it enables agencies to adapt and expand their services within their area of expertise, catering to evolving client needs while maintaining their specialisation."
How To Remain Flexible When You Become A Specialist
As I mentioned in Benefits Of Specialisation In Business #3, specialisation needs flexibility like your lungs scream for air.
Here are a few strategies you can implement to balance specialisation with flexibility.
1. Continuous Market Analysis
When you stay in tune with market trends and customer feedback, you'll be able to identify emerging needs and potential areas for expansion within your area of expertise. This allows you to proactively adjust your service offerings while remaining aligned to your core service offering.
2. Strategic Partnerships
Many agencies walk away from becoming a specialist because they want to offer a one-stop-shop to their clients. You can easily solve this when you collaborate with other complementary professionals. It provides opportunities for expanding services without diluting expertise. But not only that, you’re likely to get referrals . And we all know these are priceless.
3. Agile Project Management
Rather than being rigid in what you do and how you do it, adopting agile methodologies is where it’s at. True to its nature, it enables you to respond quickly to changing client requirements. Contrary to what you might think, when done right, repeatable processes make it easy to pivot and adapt your service delivery relatively quickly, while still staying within your area of expertise.
4. Ongoing Learning and Development
When you want to be seen as an expert, there is no walking away from continuous professional development. By investing in skills and knowledge, your business remains adaptable and flexible. You’ll be ready to embrace new opportunities within your area of expertise, while the generalist scrambles to remain up to speed. Also, unlike the generalist, you don’t have to spend all hours of the day battling to remain in the know across a million different area.
Can I Get Some Help With That?
With that all said, I hope I have made you pause on the (incorrect)assumption that specialisation is limiting, when in fact it is anything but that.
We all deserve to get our business to the point of scalable growth without getting to the point of burnout or exhaustion. And specialisation can do that for you.
I encourage you to reflect on the power of specialisation. Take a moment to assess your current business model and consider the benefits of focusing your service offering.
Embrace the opportunity to become a leader in your chosen field and use your experience to deliver exceptional value to your clients.
If you’re convinced becoming a specialist is the road forward, but you’re not entirely sure what your focus should be, get in touch. I can help you figure it out.
Book a call here.