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.

Here’s how the strategy options break down, highest success rate to lowest:
  1. A single technology offered to a single vertical;
  2. A single vertical focus offering multiple technologies; and
  3. Lastly, far lastly, multiple technologies to multiple verticals.
The lesson here is avoid becoming a geographic generalist, which is to be anything for anybody, anywhere. That is the surefire path to nowhere. For some best practices on how to get specialization just right, check out my recent interview with Jen Sieger:

Specialization can increase your company’s value

After you become a specialized company and the intellectual and financial envy of your competitive set, you become highly attractive to the acquisitive set – companies that will pay dearly for your company and be glad they did.
If you’re among the acquisitive, specialized companies are the ones you should be scouring the country for. They have carved out a very special place in the market and should be acknowledged for their achievements.
Those of us in technology have watched our industry accelerate and become increasingly complex. If making technology decisions feels challenging to us, imagine how it feels to our customers! We’re betting that the real winners in the industry will be those who set a specialization course for themselves, then look to acquire or be acquired by like-minded specialized success stories.
This is the first of three articles on the pathway to profitability for Microsoft partners looking to build their business. Join me for my second article addressing why IP is the next logical step in the constantly evolving partner ecosystem.