You don't have a demand problem.

Story time...

The day that referrals stopped rolling in for my first agency is seered into my mind. Things were going so well - until they weren't. I hung the shingle and my network came out in droves to request my help or refer me to those who did. I doubled the size of the agency in less than a year and had to hire people to keep up with the demand. But then the referrals dried up. My initial thought was that I need to increase awareness because nobody outside my network knows who we are.

But while that was a true statement, no amount of awareness helped. I went to networking events, launched more ads, sent more emails, but nothing happened. And to boot, this was happening during a time when demand for digital marketing services was growting strong - the category was growing, but my firm was no longer keeping pace.

I have yet to come across a boutique firm that does. Yet when I speak to many of them, their initial thought is that they need to "generate more demand" or "drive more brand awareness".

In most markets for professional services, there is no shortage of demand. There is plenty of demand for AI strategy and implementation. There is plenty of demand for accounting and fractional CFO services. There is plenty of demand for environmental consulting. There is plenty of demand for digital transformation. There is plenty of demand for... well you get the point.

So I say again... you don't have a demand problem.

What you actually have is a positioning problem.

Increased Category Demand = Increased Buying Risk

Demand for professional services doesn't exist in a vacuum. Demand usually incrases as a particular business problem becomes more prominent and more painful for a bigger and bigger group of businesses.

Think about Cybersecurity and Data Privacy  in the Mid-2010s to the Present. A wave of high-profile data breaches (e.g., Target in 2013, Equifax in 2017) exposed millions of customer records. At the same time, new regulations like GDPR (2018) and CCPA (2020) imposed heavy fines for non-compliance. Yet as cybersecurity firms multiplied, some grew exponentially, while others struggled to attract clients beyond their immediate networks.

Or think about Digital Transformation around that same time period. Legacy on-premise systems, manual processes, and siloed data made it difficult for mid-market firms to innovate. Customers began demanding mobile, on-demand experiences, and competitors, especially digital-native disruptors, started eating their lunch. Again, many digital transformation firms sprung up, but many later entrants struggled to grow.

Many other examples exist: remote work enablement in the 2020s, ESG and sustainability consunsulting in the late 2010s, risk management consulting post 2009 financial crisis.

As the competitive set increases along with the prominence of the problem at hand, the risk for chosing the wrong partner increases exponentially. As the problem becomes more prominent, it receives exposure and pressure from the upper eshelons of executive leadership. As the competitive set increases, we run into the paradox of choice. This is also why so many enterprise deals are lost to "no decision". The risk is too high and they choose to stay with the status quo.

Symptoms vs. Diagnosis

Maybe your inbound leads have dried up. Or maybe your close rate has plummeted, especially in competitive situations. Looking at these symptoms in a vacuum, may lead you to believe that you have a demand problem.

But we have to remember that we all operate within markets. So the only way to properly diagnose the root cause of your problem is to understand how your performance compares to the broader market trends and ecosystem.

If the market is moving up and to the right while you are facing declining performance, that isn't a demand problem. It is a sign that you have a positioning issue and that you are being left behind by the influx of competitors. Positioning without differentiation doesn't convert. As more firms come into the market, many of them become completely interchangeable from the prospective client's perspective. But differentiation, for the sake of being different, without context, actually makes the problem worse. This is why anchoring your positioning on actionable intellectual property (frameworks and methodologies) is the way to de-risk the buying decision for your ideal clients.

Want to know if your firm is positioned for growth? Take the Positioning Risk Assessment.

The Trap of "Doing More"

In response to these symptoms, the common knee jerk reaction is to "do more". More blogs. More newsletters. More conferences. More webinars. More, more, more. But doing more, without the appropriate positioning infrastructure is the equivalent of trying to scream louder in a crowd of others who are also trying to scream louder. You are just increasing the overall noise level, but none of the potential buyers in that room want that.

Sure, maybe you will get more awareness, but it won't translate into affinity, which is what you really want. You see this happening a lot right now with thought leadership. Many in the consulting firms are saying "we need more of our ideal clients to see us as thought leaders in the field" and their knee jerk solution to that is doing more of what they believe "thought leadership" is. Even though most of it is just self-promotion disguised as thought leadership.

You Have a Positioning Problem

Probably.

There are of course situations where ther market is actually shrinking. In those cases, you need to be looking at expanding and pivoting to adjacent markets, while identifying ways to capture more market share from the existing shrinking market. But that's a conversation for another time.

The vast majority of the clients I work with, are operating in stable or growing markets, yet they come to me because they have plateaued - usually for multiple years. Most of them have tried to "do more". Many have tried to "differentiate", but more superficially. And now they feel stuck.

This is what a positioning problem looks and feels like.

Positioning is how your ideal clients see your brand, in the market you serve, in relation to other competing services. This definition addresses three core elements:

1. Ideal Clients - this is the WHO, but it is very specific; it is the IDEAL WHO. Too many firms have a very loose definition of their ICP for their positioning to be effective.
2. See Your Brand - this focuses on trust and credibility; is what you say credible and can they trust that you will deliver?
3. In Relation to Others - this focuses on risk and differentiation; how you are seen in relation to others can either increase risk perception, or decrease it.

Again, this isn't just about awareness and visibility. It's about owning a unique space in your ideal clients' mind. So first things first, you need to get crystal clear about who you are ideally serving - your ICP. Then you need to extract, develop, and synthesize your intellectual property into contextually relevant and valuable methodologies and frameworks that get your ideal client's to think differently about their problem. Last, but definitely not least, you need to evangelize your IP within your target ecosystem. That's your growth engine.

Want to know if your firm is positioned for growth? Take the Positioning Risk Assessment.

This post is one of seveal in a series. Are you gelling yourself any of these other lies?

1. Hiring for Pedigree Will Fuel Growth
2. Our Work Speaks for Itself
3. I Don't Want to Build Anything Big
4. We Have No Competition

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