Today I want to share the top 3 reasons why ‘specialization’ is the preferred business model of the 21st century.
We’ll also be looking at how ‘specialization’ helped one Architect land a spot on the Oprah Winfrey Show!
Let’s start with a question – what does the term ‘specialization’ really mean for design firms?
What is Specialization?
Specialization is the practice of concentrating your design services on a specific sub-market rather than offering to serve the whole market.
At first glance this strategy seems somewhat counter intuitive – how can limiting your client base to a sub-market be a more successful business model?
The short answer – because sub-markets are easier to penetrate and dominate!
However, that’s not the whole story, so let’s take a step back so we can get a better understanding of why this strategy is so successful.
Specialization and the Design Industry:
Traditionally in our industry specialization was not required. The business model followed by most design firms during the early stages of the 20th century was remarkably simple.
Before the invention of the personal computer most Architects could set-up shop, hangout a shingle, and rely on word-of-mouth referrals to win work.
Why? Because competition was limited, and fees were, for the most part, fixed.
Things all started to change, however, in the late 1970’s when fee scales began to disappear, and technology revolutionized the way we do business.
Clients now have access to more choice than ever before, and with choice comes competition, and with competition comes the need for something different… a ‘Unique Selling Proposition’ (USP)!
One of the easiest ways to communicate your Unique Selling Proposition is to specialize.
Design Professionals who specialize automatically communicate their USP because being a specialist is, as the name implies, special (or unique)!… and when given choice, Clients will always choose specialists over generalists.
For example, let’s say you want to convert your basement into a comfortable living space. Which one of the following advertisements would you contact?
We’re an award winning firm of Architects with 20 years experience.
We’re a boutique firm of Architects with a focus on client satisfaction.
We specialize in converting basements into beautiful living spaces.
… and that’s why specialization is such a powerful business model. Design firms who specialize have a clearly identifiable USP and can therefore achieve three very important goals:
- easily identify their target audience, and thus communicate with them directly
- reduce the competition and become recognized as an expert (USP), and
- charge a premium fee for their expertise.
This all sounds too good to be true so let’s dig a little deeper.
What Happens if I Pick a Sub-market that is Too Small?
Many Design Professions are concerned that if they choose to specialize in a sub-market they may not have enough potential clients to work with.
According to the marketing guru, international bestselling author and business expert, Seth Goddin:
“There’s no such thing as a niche that’s too small if the people care enough.
If you think you need a bigger market, you’re actually saying that the market you already have doesn’t need you.
You might not need a bigger niche. You might only need to produce more value for those you already serve.”
Okay, so maybe choosing a niche isn’t such a bad idea… but why do experts get paid a premium?
Why do Experts get Paid a Premium?
Experts get paid a premium because they’re unique!… and people place a higher value on things that are unique (The Principle of Scarcity – Rule 7).
For example according to information published by Kaplan, specialist Doctors in the United States earn on average forty percent more than Primary Care Physicians.
Likewise, according to statistics published by the PFA, Premier league Football players in the UK earn on average six times more than their counterparts in the next league down.
And according to CNBC, the Tour de France winner can expect to receive twice as much prize money as the second place cyclist, and five times as much as the third-place cyclist.
Winners and specialists are unique so they get paid more – even in the design industry!
For example, according to the Sunday Times Rich List, the world-famous Architect Sir Norman Foster is worth over US$200,000,000. Meanwhile most Architects can expect to earn a median annual salary of around US$80,000 (U.S News 2018).
In summary, it pays to be the best at what you do… and it’s much easier to become the best when you reduce the competition and specialize in a sub-market!
To help you become the best at what you do we’ve created a free Starter Kit packed full of useful resources CLICK HERE for details:
How do you Become a Specialist?
So if specialization is so highly prized how can you become a specialist?
Let’s take a look at a residential architect who dominated their sub-market and achieved incredible success.
Case study – Sarah Susanka (Residential Architect)
Sarah Susanka is an English-born, American-based residential Architect who used the specialization business model with great success.
Ten years into her career she decided to specialize in designing custom homes for a specific type of client – clients that value quality over quantity.
The idea behind her new business model was quite simple – become recognized as an expert and build a loyal group of followers.
To achieve this goal, she started lecturing on the benefits of designing for quality, not quantity, at local home and garden shows and events where her potential clients would typically frequent.
These events not only gave her a platform from which to demonstrate her knowledge, but they also provided her with an opportunity to learn more about her clients.
The hard work soon paid off and it wasn’t long before clients were attracted to her expertise and scrambling for the opportunity to work with her.
By the time she had published her first book ‘The Not So Big House’ Sarah’s practice has grown to 45 employees and her expertise was being noticed on an international level.
Many major television and radio shows, including Oprah Winfrey, NPR and Good Morning America were inviting her to share her knowledge.
This is a great example of just how powerful the specialization business model really is – as a recognized expert, Sarah no longer has to compete on fee to win new work.
She is in the very enviable position of being able to choose her clients from a pool of interested parties – something most Architects would love to achieve.
When clients have choice, they’ll choose experts over generalists. Specialization helps Design Professionals become experts because it allows them to:
- Identify their target audience,
- reduce the competition, and
- charge a premium fee.
If you want to become an expert then follow the Sarah Susanka model.
This has been a quick look at the specialization business model. Thank you for reading and please don’t hesitate to share this post using the share buttons below.
Let us know what you think:
Have you already chosen your sub-market? Let us know in the comments section below by saying “Yes”, if you have, or “No”, if you haven’t.
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• Marketing for Architects – The Most Important Rule (blog):
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