How do you differentiate a law firm?
What makes an ad agency relevant?
How can you tell one accounting firm from another?
Can brand-building really help a consulting firm win more business?
Professional services take away problems and capture benefits. This is why they exist. This applies to law firms, consultancies, advertising agencies, architects, wealth management or private banking services, creative agencies, and accounting firms. If they do it right they are rewarded with long-term, mutually beneficial relationships.
Professional services are fascinating. Tom Peters, management consultant and author, has said, “The professional service firm – with its obsession with clients and projects – must be the new organization model.” Yet, professional services are tough businesses to brand because the promise is intangible and requires a leap-of-faith purchase.
Professional Service Essence
Whether it be a consulting, accounting, advertising or architecture firm, common characteristics apply. Each involves a specialty that demands highly talented people (who can be highly demanding). Most firms pursue deliver services that are repeatable and trainable to efficiently and effectively grow revenue. And though these services are offered to a variety of clients, they must be delivered in a customized way demanding high levels of face-to-face interaction.
The essence of professional services is that they prepare clients for the future, preempt the undesirable, control what can be controlled, and identify new opportunities.
Because of these commonalities, firms tend to share the same business model. They rely on leverage in organizational design for profitability, structure and process, and career path strategies.
In terms of business development, they become hunter or farmer. Then they endlessly debate how best to go-to-market and usually arrive at an unnecessarily complex matrix involving a combination of service, geography, industry, and/or client segmentation. They bore the market because they are talking to themselves.
The vast majority of firms are too flexible when it comes to strategic positioning. They react to any new opportunity or chase any expression of interest from a prospect, making them quite willing to deviate from “strategy.” They are known to chase fads. Or they bluntly apply defined service offerings to a broad range of client business problems, epitomizing the maxim, “If you only have a hammer, everything looks like a nail.”
In my experience, these strategic flaws produce six challenges for branding and marketing.
Challenge 1: Are We One Brand?
Looking at a global consulting or accounting firm, one immediately assumes all offices work in lockstep, processes are uniform, services and methodologies are consistent, and information is shared in real time across the organization. In reality these firms are loose-knit confederations linked only by a logo. The reasons for this include:
- Many firms have grown through acquisition and acquired entities retain their own culture
- Entrepreneurial leaders in the region bristle at (if not outright ignore) corporate mandates
- Language, culture and practice demand local customization
- With growth, it is difficult to maintain attributes that first made the brand successful
- Financial and organizational policy create more division than unity
Firms often get caught up in their own machinations and lose sight of serving the client. James Brian Quinn wrote in Strategies for Change: Logical Incrementalism , “A good deal of the corporate planning I have observed is like a ritual rain dance; it has no effect on the weather that follows, but those who engage in it think it does. Moreover, it seems to me that much of the advice and instruction related to corporate planning is directed at improving the dancing, not the weather.”
An interesting example is McKinsey & Company. The firm is driven by a common mission, aspirations and guiding principles. This has allowed them to stay true to a sound yet evolving positioning that provides for changing conditions. It sets us what I call “the guardrails and goalposts” for communicating a long-term vision while allowing for strategic flexibility.
McKinsey makes it’s promise internally and externally. They strive to deliver on the promise and, therefore, their professionals and staff know, understand and live these values with every interaction. This drives a client experience model that instructs all at McKinsey on how to behave in order to distinguish themselves from others in the “how” things are done, as well as the “what.”
Challenge 2: The Tangible and Intangible Divide
Professional services are largely intangible and because of that intangibility, what is actually being sold is a promise. This makes them hard to market and sell. Often common marketing and sales approaches do not apply.
Intangibles are difficult to define, package and measure and therefore require active and creative management. The challenge to the professional service marketer is to constantly promote tangibility. To do so, Philip Kotler suggests addressing the inseparability of service from provider, the variability in the quality of delivery, and the perishability of services (e.g., a strategy today is irrelevant next week).
Tactically, firms can invest in thought leadership with white papers, speeches, webinars, books or other methods that help make more real the firm and what it offers.
Increasingly this is difficult because what have historically been differentiators are now commodities; strategic advice is being disbursed at no charge just to get in the door, quality is a given, and everyone has great people. Today, marketers only succeed if they know their audience’s chief concerns and marry capabilities to meet them.
Challenge 3: How Clients Buy
Sir Arthur Conan Doyle’s famous detective, Sherlock Holmes, once remarked, “The client to me is a mere unit, a factor in a problem.” That sounds cold but many in professional services do call clients “accounts,” effectively removing the human complexity of the relationship. Peter Drucker opined, “The aim of marketing is to know and understand the customer so well the product or service fits and sells itself. Ideally, marketing should result in a customer who is ready to buy.”
No one goes out daily to shop for a lawyer or advertising agency. Clients purchase the service when they have a real need, and it is the job of marketers to position their firm in the first consideration set or ideally as the sole choice. From the client’s viewpoint suppliers of professional services are numerous and largely undifferentiated.
Kennedy Information wrote a study on the criteria used for selecting consultancies. The top criteria involved expertise. The balance covered price and prior indicators of performance. The study missed the critical human elements involved in purchasing professional services.
David Maister, author of Managing the Professional Service Firm, pointed out that when buying, clients feel insecure, threatened, assume personal risk, and are impatient, worried, exposed, ignorant, skeptical, concerned and suspicious. That is an incredible array of emotions that firms must recognize in their marketing.
The skill of listening becomes absolutely critical. Many professionals suffer from the flaw of talking too much about themselves and their firm. I tell all clients to, “Be interested, not interesting.” This was deftly illustrated in an episode of NBC’s The Office, when during a sales call Michael complimentes the prospect on the size of a fish he had caught. Unfortunately, his ignorant companion, Andy, tells a competing and overwhelming fish story of his own in an effort to impress. They lose the sale.
Clients engage professional services to improve their business performance. To either take away a pain or capture an opportunity. Yet, clients actually choose a firm based on a mix of rational and emotional factors. Chemistry is huge. Prospects are looking for empathy, trust and integrity as much as expertise.
Clients keep mental checklists of every interaction with you. They ask themselves, do they understand my industry and my business, recognize my personal drivers for decision-making, are responsive and proactive, tell me things I do not know, and do they advise me in language I can understand? In short, do they care enough to make me successful?
While at Interbrand, I led the rebranding of a global consulting firm. Our research supported the points made in the previous paragraph. We found that professional services must exist in humble but proud support of their clients. We used the analogy of Tenzing Norgay, the man behind Sir Edmund Hillary’s successful ascent of the summit of Mount Everest.
Norgay said, “If it is a shame to be the second man on Mount Everest, then I will have to live with this shame.” This epitomized the insight that professional services help make the client successful and that they find satisfaction and reward through the accomplishments of those they support. We even went so far as to suggest renaming the consultancy “Tenzing” (which obviously did not happen).
Challenge 4: Marketing is a Dirty Word
You would think this should be easy stuff: define your market, identify prospects, find out what they need, present and sell the service to them, deliver to their full satisfaction, and never lose them as a client. Sounds easy, right? Of course it isn’t. Over the years I have seen professional service providers oversimplify their marketing to the point of irrelevance or overcomplicate it to the point of confusion.
You cannot dabble in anything you need to do well and professional services need to market excellently. For years law firms and accountancies disdained the word, “marketing.” It was uncouth to proactively seek clients, and though that legacy has largely been eradicated, there is behavioral hangover.
All now “market” but what has resulted are efforts that are largely ad hoc, flavor of the month, or copycat. Seth Godin has remarked, “Professional service marketing is certainly among the ‘safest’ I’ve ever seen. [But] because it takes no risks, it’s actually quite risky.”
The risk is even greater today. Clients are skeptical and fickle. According to a study on client propensity to switch, particularly in management consulting, 72% of purchasers are ready to do just that. These statistics come from raintoday.com. Potential switchers in other categories include:
- IT consulting and services (67%)
- Marketing, advertising and PR (63%)
- Training (61%)
- Architecture, engineering and construction (54%)
- HR consulting (53%)
- Legal services (52%)
- Accounting and financial services (52%)
Peter Drucker says that “the aim of marketing is to make selling superfluous.” Based on the high desire to switch, there is an environment of frantic selling because service quality and marketing are obviously not fulfilling their promise. It is good to be reminded of “Seven Fundamental Principles” from the book, Management Consulting: A Guide to the Profession:
- Regard the clients’ needs and requirements as the focal point of all marketing
- Remember that every client is unique
- Don’t misrepresent yourself
- Don’t oversell
- Refrain from denigrating other consultants
- Never forget that you are marketing a professional service
- Aim at an equally high professional performance in marketing and in execution
The last point supports the notion that you cannot dabble in marketing or make it ad hoc, or follow fads or imitate. A firm must find out what works for them through consistent experimentation married to their culture and supportive of their strategy. Most firms do not establish that strategy. Instead they chase tactics and do a great deal of irrelevant busywork.
The following tactics all can be valid and comprise a marketing strategy:
- Email alerts
- Social media accounts
Yet, they must support the business and brand strategy, be chosen and applied with an understanding of how each tactic works with the others, and keep in mind frequency and relevance to the desired audience. This last point raises the question of how much is enough when marketing? Too much and the prospect or client feels spammed and harassed. Tara Lemmey writes, “There is a very fine line between good customer service and stalking.” Too little, however, and clients or prospects do not feel loved.
Broderick & Associates conducted a study that identified the number of touches needed for a prospect to be aware and even predisposed to professional services. They arrived at 17. That is 17 times in which the client had some combination of contact with the firm through proactive marketing (e.g., keynote speaker) or just passive existence (e.g., website). It is an art to stay top of mind and a valuable resource rather than an intrusive annoyance.
Undoubtedly the best marketing tool is the referral. Referrals require more effort than cold calling; that is, consistently delighting clients. The same, of course, goes for up-selling and cross-selling to an existing client. They all demand time, money and people resources. Interestingly, the majority of firms have no formal program for marketing to existing clients. This is difficult to understand when as incumbent you are harder for competitors to dislodge, the sale has a higher probability of success, and a relationship is already in place that allows for honest communication.
This can be attributed to the fear of asking for more but it is also because the majority of firms I have encountered honor, celebrate and reward business gained from new clients far more generously than they do the maintenance and growth of existing ones. A client in business development bemoaned the fact that his boss “got more excited when we sold a $500,000 consulting project to a new client than when an existing client awarded us $1,000,000 a year in recurring revenue.”
Challenge 5: Knowledge Is the Product and Knowledge (Shared) Is Powerful
Brands in professional services are built on intellectual assets, whether creativity in communications, analytical processes in research firms, or strategy methodologies in consultancies. McKinsey, BCG and Bain have used thought leadership to propel their brands. In his book, The Wealth of Knowledge, Thomas A. Stewart writes, “Intellectual assets have become more important than any other because only by means of knowledge can companies differentiate their work from their competitors.”
We hear certain terms in professional services: intellectual capital, thought leadership, and knowledge management – impressive but not entirely plain speak. Let’s break them down:
- Intellectual capital is the expertise of the firm’s experts (present and past) that embodies the knowledge and methods they use to solve client problems
- Thought leadership is intellectual capital codified and marketed – and that the market views as superior
- Knowledge management is the process used to capture, package and disseminate intellectual capital and thought leadership
Once you remove the jargon and “consultese,” the main take away is that professional services can articulate and differentiate themselves through the quality, uniqueness and frequency of sharing their knowledge. This produces actual sales leads and, even better, sole-sourced relationships.
In a survey of 179 professional service professionals, The Bloom Group found that the key factors in marketing effectiveness include:
- Strong intellectual capital
- Referenceable client work
- Strong business development capabilities
- Sound marketing strategy
- Strong brand and image
A key finding from the study reveals that those professional services businesses with strong intellectual capital are far more likely to generate substantial market awareness and business leads. Supporting these findings is The Economist Intelligence Unit’s 10 Megatrends in B2B Marketing: “Thought leadership becomes a top priority” is megatrend number one.
Unfortunately most firms fail when attempting to promote their novel ideas. They do not package and distribute them creatively. Or day-to-day operations are given priority and institutional knowledge is never completely captured nor shared, which is a shame and costly.
Case studies are the currency of professional services, but precious few firms capture every case or do it in a way that instructs internally or is well merchandised externally.
Challenge 6: The Business Development “Cycle”
A few years ago I was the keynote speaker at PwC’s marketing retreat. The goal of the offsite was to address friction between the marketing and sales groups. The conference was themed, “Marketing is from Mars – Sales is from Venus.” Through the years, I have seen every possible model for the acquisition of new business in professional services:
- Distinct marketing and sales groups
- Merged functions
- Practice-specific marketing leads
- Dedicated sales people
- Professionals who take on marketing and sales functions
- External “rainmakers”
- Faith in the phone ringing on its own
I think of business development as spanning marketing and sales, not as two separate groups or departments. Firms inevitably succeed or fail based on constancy of purpose not a specific model or process.
Business development is dependent on many factors, including market, service, culture and economic conditions. Key to this is not to run solely with a sales-driven marketing strategy because it is subject to the vagaries of the market. Instead, firms should focus on a thought-leadership marketing strategy because it insists on the firm leading rather than reacting to the market.
This “constancy of purpose” mitigates the ups and downs experienced in business development. When times are good business development either coasts or is an afterthought. When business conditions are challenging firms experience chaos because they are without process and accountability. A concerted and sustained focus is the answer, so that business development becomes more predictive.
In professional services, clients buy; they are not sold. The most successful firms position themselves for the sale without pushing it, and this is something that cannot be delegated because it is about establishing a relationship. You cannot change the client’s business without knowing the client’s pain points and opportunities, and that requires time and energy.
Professional services attempt to codify and train their people in repeatable processes because this produces profit. But every client is different, so every client approach must be, too. Customization is critical and it is important to note:
- Your unique selling proposition may not be all that unique. H. Igor Ansoff wrote in his groundbreaking book, Corporate Strategy, “It is important to avoid mistaking an abundant competence for an outstanding one.”
- Client prospecting programs are valuable for providing guidance for identifying the clients you desire, but they need to be incredibly specific and identify fewer rather than more prospects so each can receive authentic and valuable attention. This adage is so true, “a sale is not something you pursue, it is what happens when you are deeply immersed in serving the client.”
- Clients are skeptical of professional service sales. That is because it has been dominated by up-selling and cross-selling This is why listening is a critical skill in business development.
Broderick & Associates found that generally one third of revenue comes from existing clients, one third from clients who purchase periodically, and one third from new business. Others have put it at 60/30/10 and I have seen other splits. The best exercise to go through to determine business development focus is to identify:
- The overall revenue target for the year
- The percentage of that revenue from existing clients that will recur with little effort
- The percentage of that revenue to come from increasing focus on existing clients
- The percentage of revenue that will come from new clients
The last one gives direction on the effort required to engage new markets. However, if the firm is in a position to decline business because of demand, one should ask, will this client and engagement:
- Allow practitioners to learn new skills?
- Allow us to command higher fees?
- Introduce us to a new market?
- Lead us to other work with this client and potentially provide referrals?
- Unseat a competitor’s long-term relationship?
Peter Block said, “The personal interaction between the consultant and the client during the initial contracting meetings is an accurate predictor of how the project itself will proceed.” Business developers cannot be allowed to provide the following rationale for not winning the work:
- They weren’t ready for our solution
- They “bought” an individual at our competitor
- We are too big/too small for them
- It was a setup −we never had a chance
- We are too expensive
- They were just kicking the tires
These are excuses. The real reason clients buy or not is chemistry.
In terms of gaining work from existing clients – why not just ask them? When asked directly or through satisfaction surveys and other methods, clients love to instruct firms on how to improve their value. The problem is, firms are afraid to ask or are not actively listening.
Clients can be honest (sometimes brutally so) but there are lessons to be learned from them all. Research has shown they value proactivity and interest in their business. They want their professionals to lead their thinking through an objective lens, join them for brainstorming sessions about their business, provide analysis of competitive moves, and suggest any and all areas for improvement.
These six challenges are independent and interdependent. One method of managing their entirety is to consider a model called “Win−Deliver−Capture”. It is very simple:
- Firms win work based on their track record of results and insights into the client business
- Firms deliver a fantastic experience and have a positive impact on the client’s business
- Firms capture knowledge from every engagement and package and promote the resulting intellectual capital, which leads to ever-more wins
The intention of the model is to be self-perpetuating to drive new business, increase client satisfaction, and promote brand building. The model though simple in concept is incredibly difficult in practice – it takes significant investment and focus in even just one of the main areas to make it perform successfully. However, if that commitment is made, adhering to this model can pay extraordinary dividends.
There are many more than just six challenges when it comes to branding and marketing professional services. Branding and marketing are practices, not sciences, and demand patience, commitment and ongoing investment. Firms that understand this do well because they:
- Ensure both the quality of the relationship and the quality of the solution with consistent delivery
- Marry the brand and business strategies
- Recognize and respond to emotional and rational aspects of client decision-making
- Experiment with marketing but do so with clear constancy of purpose
- Package and promote intellectual capital as a tangible, prime differentiator
- Commit to business development as a core process, not a cycle, and strive to be excellent at it
This is tough stuff. Tough to strategize and tougher to execute. Yet, there is no option. Demand does not happen by itself. Or as Harold Geneen put it it, “It is an immutable law in business that words are words, explanations are explanations, promises are promises – but only performance is reality.” That sums the role of marketing in professional services…mitigate the intangible and position the performance.