Philip Morgan

The Agency Specialization Struggle

By: Philip Morgan | October 16, 2019 | 
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agency specializationThe whole world seems to agree on agency specialization.

Narrow your business focus to a single market vertical (manufacturing, for example) or horizontal (i.e., crisis PR). 

But when you sit down to work through this decision for your business, all hell breaks loose.

Your mind fights you.

For every one argument in favor of agency specialization, you find three new arguments—good ones, it seems—against it.

I feel so much empathy for you.

For five years, I’ve been helping small digital firms decide how best to specialize.

If you’re struggling with this decision, I’ve got four helpful tips borne out of my experience.

It’s Not a Face Tattoo

Your choice about how to specialize is not a face tattoo. 

In terms of permanence, the agency specialization decision is somewhere between buying a TV and buying a house.

After you’ve specialized and stuck with the decision for a few years, you will have an asset: a market position.

This is your reputation in the market you serve.

This asset is a more permanent thing, and harder to change than which TV sits in your living room.

But early on?

In the first year or two, while you’re gaining traction with the decision?

You can change your mind.

Once you’ve made the initial mindset shift from generalist to specialist, such changes are much more manageable.

Don’t let a false need to make a “perfect” specialization decision right out of the gate hold you back.

And don’t be afraid to experiment, iterate, and tweak in the first few years.

Know Thyself

You have a measurable emotional comfort level with risk.

Your business has a specific physical capacity to sustain a loss.

Together, those define your risk profile.

If you seek risk and can handle a significant loss, then your risk profile permits all kinds of crazy specializations. 

Maybe you think that Large Adult Sons need specialized PR services.

That’s an entrepreneurial thesis, and a high-risk profile permits you to test it.

If you avoid risk, or cannot handle a significant loss, then your risk profile should steer you towards specializing in an area where you have a head start.

This is a space where you have more significant expertise, depth of connection, or credibility.

Agency specialization will make you miserable if you don’t know yourself, and especially your appetite and capacity for risk.

Understand your risk profile before you map out potential specialization options.

Use Accelerants

Agency specialization does two things for you.

One, it addresses marketing inefficiencies.

Two, it makes it possible to cultivate rare, valuable expertise.

I won’t linger on this, but you should know: the default is for marketing to fail.

For prospects to ignore or misunderstand your message.

For them to forget about you as quickly as possible. And for them to not trust you. 

Specialization helps you fix each one of these marketing inefficiencies.

Specialization also makes it possible to cultivate genuinely world-class expertise.

Stacking similar client engagements is an excellent path to that more in-depth expertise, but it’s slow.

There are accelerants you can use.

Accelerant #1: More Publishing

It seems kind of insane, but I recommend publishing three times a week or more to an email list.

Both I and those I’ve guided through this process have undergone an “expertise enema”.

In the first ~90 days, you flush out the trivial low-value stuff.

You hit the wall, and then—if you persist—you start to tap into some genuine insights nobody else in your market is talking about.

Publishing frequently to an email list is a brute force method for cultivating a unique point of view or genuine insight.

It’s worth the pain.

Accelerant #2: What Decisions Do Your Clients Struggle to Make?

Where do you see the heads in a meeting room swivel to look at the senior person who is actually deciding based only on instinct or some other flawed basis?

What independent research could you do to build a decision-making tool for them?

Perhaps you could measure something significant your clients have never bothered to measure, or don’t have the access or independent standing to measure.

Your clients understand certain things like the fabled blind men perceive the elephant.

Maybe from your outside perspective, you could model that mystery for them in a way that provides missing context and leads to better decision making.

There are more than two ways you can build a decision-making tool for your clients.

As you ponder all the possibilities, keep this in mind:

  • Thirty measurements of a consistent sample get you into the realm of diminishing returns. (Source: Douglas Hubbard)
  • Your decision-making tool will never be published in Scientific American, so don’t burden yourself with that level of rigor. Your clients make terrible decisions most of the time and your tool doesn’t test for rare brain tumors. It merely helps your clients make better decisions. Design accordingly.

Both of these accelerants only work if you have specialized in some way.

How Much is Enough?

If a little specialization is good, a lot must be better, right?

Not necessarily.

Here’s how to think about that question:

  • Does a more narrow focus make it easier to find the right clients?
  • Does more agency specialization correlate with more valuable expertise or merely weirder expertise? For example, will the market really value an expert in PR for Large Adult Sons?
  • Is there a more narrowly-specialized competition? If not, there might be very good reasons for that, low or non-existent demand being chief among them.

Why Agency Specialization is Critical

Is agency specialization easy or hard?

That’s the wrong question. 

Here’s the right one: Is running an exceptional firm easy or hard?

Of course, it’s not easy.

If you’re committed to running an exceptional firm, you’ll somewhat paradoxically find specialization—which gives you a relative advantage as you seek to build an exceptional firm—to be easy.

It will be easy, and it will make other things like marketing easier so that you can shunt more effort to the truly difficult aspects of running an exceptional firm.

Whatever fears you have about specialization might actually be deeper fears about running an exceptional firm.

Fears like challenging your clients.

Or separating yourself from the herd and therefore losing the comfort of the herd’s company.

Having the discipline to seek and build truly valuable expertise rather than taking whatever floats your way. 

Those are the more fundamental fears thinking about specialization actually reveals.

Deal with those, and the specialization question will almost take care of itself as a byproduct of you becoming more courageous.

Photo by Laura Smetsers on Unsplash

About Philip Morgan


Philip Morgan helps implementors become advisors. He's also the author of The Positioning Manual for Technical Firms.