Book review: Spiraling Up: How to Create a High Growth, High Value Professional Services Firm
The best book about business growth that I’ve read all year is Spiraling Up: How to Create a High Growth, High Value Professional Services Firm, by Lee W. Frederiksen, Ph.D. and Aaron E. Taylor.
The book focuses on research culled from a group of professional services firms that grow nine times faster and are 50% more profitable than average, yet spend slightly less than average on sales and marketing. They focused on professional services firms in accounting & finance; architecture, engineering, and construction; management consulting and outsourced services; technology; and government contracting.
Are you high growth or average?
High Growth Firms . . .
- Focus on client needs and priorities.
- Generate leads by pushing their message to a well-defined group of target clients within a limited marketing budget.
- Rely on their website to inform and persuade, and they hire outside experts to help them perfect their marketing approach. They also train non-marketing staff to deliver their message.
- Emphasis on building awareness, generating leads, and maintaining a high performing website stimulates referrals.
- Tend to have a clearer, easier to understand message.
- Specialize, have a narrow focus, and carefully target as part of their strategy.
Average Firms . . .
- Preoccupied with themselves and their expertise.
- Focus on the economy and competition.
- Address revenue problems by hiring additional sales staff and widening their range of products, rather than leveraging their existing resources through training and partnering.
- More likely to add new services and expend more energy on current clients.
80% of your competitors aren’t even on your radar.
“We invited a group of firms to list their competitors. Then we called up their clients and asked them to identify other companies they believed offer the same service. What we found what a real eye-opener. In most cases, there was less than 20% overlap in the two lists.”
Buyers just want you to start a dialog about solving their problems.
“Specialists have a real advantage. The high growth firms we discussed earlier can market so efficiently in part because their narrow focus on a well-defined target group gives them a competitive advantage over their less focused peers.”
It’s upper management’s job to expand client relationships.
Project managers will always be most focused on operations, not development. “Clients aren’t inclined to discuss their needs with project managers, anyway. They are far more likely to to open up to a firm’s upper management [about their challenges]. Few clients want to be sold to.”
Our Favorite Part
When a firm appears no different from its rivals, it’s forced to compete on price alone.
The book points out that high growth firms are almost three times more likely to have a very strong differentiator than average growth firms. As a result of differentiating yourself from others, you will be able to define your client in a detailed, specific way. Therefore, you can put more resources toward converting a very specific audience, thereby building efficiency and profitability.
They cite four different ways that businesses can differentiate themselves from their competitors.
Your firm offers a wide range of services to a single target group (i.e., teenagers with mobile phones).
Your firm solves the problems relevant to a single group (i.e., military families).
Your firm specializes in offering services to a niche (i.e., high risk, high reward Fortune 500 clients).
Your firm differentiates itself by using a different billing model from your competitors, for instance.
That takes us about halfway through Spiraling Up and doesn’t even scratch the surface. If you’re a business owner struggling with growth or simply wondering how high growth companies get to where they are, this is a must read! Download the ebook for free from the Spiraling Up website or purchase the paperback from Amazon.com.
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