Scottish inventor John Logie Baird gave first public demonstration of television in 1926 in Soho, London. Ten years later there were only 100 TV sets in world.So, how does this relate to service firms? About a century after Claude Hopkins wrote his marketing masterpiece, Scientific Advertising, only a handful of professional firms understand and practise proper positioning.
So, to help situation a little bit, let us discuss in a few words how service businesses scan better position themselves for higher demand, recognition and compensation.
In terms of market positioning professional service businesses fall into one of three distinct categories.
* Commodity type volume work
* Commercialised "one size fits all" approach
* Highly personalised premium work
COMMODITY VOLUME WORK
The mantra of this kind of business is tactically out-brawn competition with backbreaking hard work and bottomachingly low prices, earning a living through sheer brute drudgery. This is basically Wal-Mart approach of providing professional services.
This type of firms deal with a preponderance of customers (definitely no clients), employing an army of trade barbarians (people with great technical skills but as total lack of other necessary skills) and churning out high volume of low margin deliverables, such as workshops, websites, etc.
The typical examples of these businesses are web site developers and seminar companies. These firms have rigid policies and procedures to follow, and idea is that they can hire low-skilled underpaid "labourers" who have enough skills to follow procedure manual even with their eyes shut and standing on their heads.
In these firms we cannot talk about careers. They offer jobs for their people for short-term survival. Usually people take these jobs as stop-gap measures, but do their best to move on as quickly as humanly possible.
These firms specialise on solving very specific problems in very specific ways. For example: You have a computer problem, so we install a new IBM server. The solution to every problem is an IBM server.
When you are an IBM partner and receive a kickback on your sales from IBM, then solution to everything happens to be most expensive IBM "box".
"In your specific case you need good old mercury filling" - says your dentist, who also happens to be a shareholder in local mercury mine.
Fee sensitivity is very high in these firms and they are willing to drop their prices in order to land any business. Remember motto is high volume work whatever it takes.
To compensate for low price though, these firms employ armies of junior staff on their projects, and they can make up for their low fees in asking for a low hourly rate for an army of people.
One of problems these firms are facing is that tomorrow someone else may be willing to do same work cheaper, so commodity firm goes down is history as a perfect loser.
Commodity firms run on very high overheads, and often one way of cutting overheads is cutting corners.
Since these firms operate like manufacturing plants, it is vitally important to implement quality assurance and productivity measurement processes. The value-added components of these firms are their processes, procedures and internal operating methods.
Most of these firms are operated and managed like large corporations, and operate more as contractors than as consultants. The personal touch is almost non-existent and emphasis is on churning out next piece of work and moving on.
COMMERCIALISED "OUR UNIQUE APPROACH" TYPE WORK
These firms have extensive institutional experience at solving certain types of problems. Individual talents are largely ignored because everyone is expected to feed firm’s institutional competency.
These firms' engagements have less diagnosis and more implementation of predictable, off-the-shelf solution. At this level there is some collaboration with clients, but work is largely based on "doing it for you" approach.
There is quite a bit of leverage. The senior “consultant” (consultant? Gag me with a spoon!). The senior peddler just enough grey on temples comes and closes deal, and then an army of junior staff descends on poor client to implement project and bump up billable time.