Growth has returned to the professional service sector but the dynamics of the market have changed. The economic crisis strained all relationships and many were found wanting. Client demands continue to increase in scope and sophistication with widespread use of aggressive procurement processes to reduce fees but more fundamentally the old assumptions about effective ways of working and value actually delivered are openly challenged. More active engagement of the “star” partner, a project team with substantive relevant experience, and real knowledge transfer to sustain the improvements post assignment are reasonable expectations but have major economic and operational implications for the firms.
Work is being won but a closer examination shows that the effective marketing that is being undertaken with clients often bears little or no relationship with the formal “Marketing” that firm’s marketing function seeks to promote. And this gap extends beyond “go to market programs” to include key areas on messaging and branding where specified language, concepts and behaviours that leadership believe are being used are simply ignored in the pursuit of winning work. As the markets have got tougher, “formal marketing” has been found wanting. It is most telling that as the marketing challenge has grown, formal marketing budgets have been significantly reduced.
At the heart of this problem are two conflicting developments. On the one hand the demand from clients is for increasingly customised and technical solutions. Most global companies have capable internal resource and know that their challenges while similar, are each unique to themselves. In dealing with the issues they face, Clients are increasingly demanding more granular responses. The account teams serving them are focused on developing a bespoke insightful dialogue that highlights their deep understanding of the specific client, its sector and unique operational challenges so that they can respond quickly to opportunities – hopefully without competitive tender.
The marketing function, however is heading in another direction. The trend for several years has been to build bigger programs that address broader issues, ideally crossing multiple sectors and countries. The focus has been on measured cost control rather than unmeasured value creation. The move to professionalise marketing has seen a growth in specialisation matched by a fragmentation of the function both in organisation and reporting. As partners have scrambled for revenue in the market, they have found their marketing resource transformed into a fragmented shared service model and its output too generic for effective use. Disconnected from the market, often distant from the local practice, marketing has lost its place in strategic decision–making and struggles to articulate its role or add value.
Does the gap matter?
The gap between formal and informal marketing may not trouble short term revenue; bright people with good current client relationships can normally find new things to do. But the gap causes three serious problems for an organisation; it is hugely inefficient, it undermines the firm’s control of its reputation and it prevents the firm from learning and improving its performance.
Formal marketing budgets in professional services are often unrealistically low compared with the goals that are set. Typically firms report that they spend just under 2% of revenue on formal marketing, aggregating to some $5 to $8 billion worldwide. Yet if these programs are not deployed, such spend is simply wasted – a saving that would go directly to the bottom line. And formal budgets are but a shadow of the real cost of winning work. Expenditure, both cash and time, on the informal programs is inherently inefficient where each account team has to develop its own approach and has a far bigger impact on earnings than either measured or understood.
The gap between formal and informal programs risks significantly damaging the organisation’s ability to manage its reputation and go to market activities. The disconnected formal programs, often developed with little involvement of the client facing professionals, can send out messages to the market which at best confuse expectations and at worse hinder business development. Equally a myriad of un-coordinated and disconnected account specific programs have the effect of fragmenting and undermining the wider brand that the firm is seeking to develop.
Most significantly, perhaps, the gap is a barrier to improved performance for the business. The effective marketing undertaken on accounts is rarely recorded. Opportunities to learn, to sharpen and to reuse across the firm are therefore missed. The formal function, however, frequently lacks direct access to clients, sometimes even account teams, and is dependent on anecdotal feedback to assess its performance. Programs are launched but rather than being improved through learning, the same mistakes are repeated again and again.
What should be done?
For any level of investment, there are four areas where management – both of the business and the marketing function – should invest time in order to quickly improve performance. Sharpening focus, restoring coherence and supporting deployment lie at the heart of the response. This is best achieved through explicitly re-establishing the strategic marketing process within the firm.
Sharpening Focus – who, what and why
Lack of focus– both as to target and service proposition – is a major cause of marketing ineffectiveness. In a competitive and increasingly granular market, answering who to target in which company and for what purpose are the fundamental marketing questions that organisations need to solve. Apply this as a filter in reviewing most of today’s marketing programs and you will find a disconnection. Who is the buyer for a program on the capital agenda or urbanisation and what exactly is being sold? These programs are too broad, the purchaser uncertain and the proposition unclear.
Business to Business (B2B) marketing is about individuals where Business to Consumer (B2C) marketing is almost always about types. Where sheer numbers force B2C marketers to create archetype buyer types with aggregate tastes and preferences, the B2B marketer can actually focus on real individuals with specific challenges within specific companies. Real people have names, histories, homes, families, hobbies, preferences for reading or communication style. Relationships can be built; understanding deepened and bespoke solutions developed. Yet few marketing programs being developed today achieve even close to the focus needed.
Much of the blame lies outside the marketing function with the underdeveloped strategy many firms operate. If good strategy is about choice and resource allocation, this is very hard to achieve in firms where every partner feels they have a voice and every business unit believes it has a right to reinvest its earnings. The strategies that exist are consequently written in very broad generic terms that form meaningless marketing goals.
A goal of “targeting the C-suite in mid-market companies in the consumer goods sector in emerging markets” is but the starting point in developing an effective marketing strategy. Each of the terms – C-suite, mid-market, consumer goods sector and emerging markets – begs the question of who is to be targeted. The C-suite is a leadership group of individuals with different needs and perspectives. Mid-market companies are all of those which are neither very large nor small start-ups. The consumer goods sector is an aggregation of many different markets with significantly different characteristics. And emerging markets – a very dated term – seems to cover all national markets which are not yet “developed”. The more that a firm, and specifically its marketing, can push past these general labels to develop specific and agreed targets – which countries, which sectors, which segments, which actual companies, which buyers – the greater the chance of marketing effectiveness.
An equal focus is required on what the firm is seeking to sell. Much of marketing is focused on programs that seek to build reputation for a firm or to deepen relationships, both critically important but, as the technical demands of the market have increased; there has been a tendency to reduce attention on direct revenue programs. If reputation programs need to attract the media to shape perception, relationship programs need to support conversation and revenue programs need to relate to the skills and services that the firm sells in a language that the client understand. The picture is sometimes painted of mindless “product marketing” – partners travelling around trying to sell a defined methodology regardless of the distinctive needs of the client. If you only have a hammer, chances are that most things will look like a nail.
But while remaining client centric, there are occasions when “product” marketing is exactly what is required. For example, when Sarbanes Oxley was passed in the US, the right marketing response was to get in front of clients and say we can implement Sarbanes Oxley rather than a general approach based on risk management. Clearly stating the service proposition in client language is a core marketing competence that has been allowed to wither.
Restoring Coherence – together we might just succeed
We live in a world of noise and distraction, bombarded by messages wherever we are. Some are clear, some confused, some relevant but most irrelevant. We tune out the noise as we get on with our daily lives – especially at work. The challenge facing a business is how to achieve cut though so that its messages receive priority from its target market. The chance of being heard is increased if your message is strong, relevant, distinctive, but most importantly repeated and reinforced overtime by related communication. But as effective marketing has become more account focused and informal, the resulting activity has tended to fragment and undermine the shared brand proposition that is needed to create coherence.
Immense marketing effort has been invested in trying to develop distinctive messages for firms – a challenging task given the increased transience of staff and fundamental homogeneity of both staff and services across the sector. Experience has shown, however, that it is not only clarity of message but frequency of repetition that actually determines success. A rule of thumb is that a company needs to effectively communicate with a target seven times over a 12 month period in more than one way if it is to be successful. And this is a conservative estimate as companies selling to consumers recognise the need to get much higher levels of repetition.
Yet professional services firms don’t recognise this need for repetition or intensity of communication and are organisationally challenged to deliver it. Their plans are built on separate programs and their ambition satisfied with single client engagements. Coherence is further undermined by scope of service, the high number and fragmentation of internal decision makers, and weak planning processes. Very few professional service firms actively manage the coherence of their go to market activities.
And the more global the firm aspires to be, the greater the chance of incoherent messaging. Within Europe, for example, a major piece of research may show companies expect market conditions to worsen, while at the same time a global team publishes research that shows in aggregate that “globally” companies are expecting things to get better. Both are “right” and both published but what is the target meant to conclude? The pursuit of global consistency supported by “global” research can result in programs which are paradoxically globally true but inaccurate or even irrelevant in any actual given market or client situation.
It is popular to perceive the problem to be volume of production. Many of the larger firms are producing many hundred, if not thousands, of marketing initiatives each year often within a very tight timetable. Production is also frequently fragmented. The response has been to centralise and cut back – “fewer, bigger, better” is the mantra – but this has huge risks on delivering both the relevance and frequency required by the market to be effective. Less may be more, as they say, but it is only guaranteed to be less. It is not how much is produced that matters, but how frequently a specific audience is reached with related material.
The 12 month budget and planning cycle also results in a tendency for firms to change their message and programs too frequently. As the budget cycle arrives teams are confronted by the desire to do something new, partly to justify new funding but partly because the team working on the project have become immersed and bored by it. By the time the program has reached the market, the marketing function has moved on to the next.
What is needed is a coherent positioning – a bigger picture that underlies and provides support to all the marketing programs and their users – translated into a robust plan. This, at its essence, is the challenge for brand and no term is more misunderstood than brand in professional services. Brand is the collections of associations – good and bad, which live in the mind of people whether they be potential clients or current or future employees. It provides a short-hand summary to help clients in their purchase decision, underlying both the professional credibility and the price premium that some firms can earn. It needs to be founded on benefits to clients that the firm feels it uniquely is able to deliver through its competencies, experience, values and way of working.
But faced with the complexity and scope of the real brand, marketing teams have narrowed their focus onto what they control – tag-lines, logos and the visual identity. As companies struggle, their brand claims have got more ambitious yet the substance of their brand difference has weakened. And the brand is rarely embedded into the wider marketing plan. It can be a disciplinary offence to misuse the logo, but the wider brand experience sought for clients is often neither articulated nor managed.
Strengthening deployment – making it happen
However brilliant the idea or innovative the campaign and collateral, the value of marketing is created only when it is deployed in the market. But the marketing function itself controls only the direct to market deployment which typically makes up only a small proportion of what professional services firms do. The vast majority of marketing activity within professional services is undertaken by the client facing professionals and most firms still operate under the concept that a partner owns his or her client and should lead marketing initiatives.
Yet client- facing staff can make poor partners in this process, often ill-equipped in time, skills and mind-set to execute marketing programs. The typical partner has never been busier in dealing with their clients increased demands nor faced such internal pressure before. The days of life long tenure are long gone and most partner performance is highly measured – even if the connection between measurement and reward constantly challenged. If you miss your goals one year, you may simply have your profits reduced, miss them twice and you may be fired. An 80 hour week, paradoxically, gives very little time to think or learn.
And overwhelmingly such partners are technical experts – they are typically in their position because of technical expertise and, in their daily work with clients, they are asked to adopt a position of expertise where they deliver an answer. The deeper the technical competence, however, the narrower is often the area of confidence in which a partner is prepared to have a discussion with a client or target. Programs addressing major strategic or macro-economic issues can generate significant media coverage for a firm but very few actual client discussions. Lack of confidence in using marketing can often translate into a disdain for the programs and a reluctance to participate.
The actual support provided by the marketing function to partners in the field has reduced with budget and is typically determined by the seniority of the partner concerned rather than the size of the market opportunity. No firm can now afford to provide one to one marketing support. Instead the partner is expected to adopt a self-service approach, drawing from a menu of events, services and programs such as thought leadership and taking the relevant material to their clients.
Such an approach requires a different approach to marketing planning than is currently typically used. Too often today, the marketing plan is simply a budget allocation across internal stakeholders broken down into a list of activities that will be undertaken over the course of the year to justify that spend. A good marketing plan, however, needs to articulate the goals and related measures of effectiveness, the programs and their constituent outputs that will deliver required frequency and a firm commitment as to when such outputs will be delivered. But it also needs to go further and seek to weave all the planned initiatives into a coherent and interconnected whole. Such a final review will reveal those programs which sit outside the focus of the wider firm and where further review may be required.
Too frequently, however, the marketing program arrives like an unexpected and unordered piece of flat-pack furniture, missing its instructions. The team were not aware that it was going to arrive and haven’t had chance to plan its deployment. The program itself is too generic to be made relevant for the client without requiring significant customisation. And there is limited, if any, guidance on how the program is to be used. Such programs never leave the partners desk.
Within the marketing function, the acts of initiation and design are held in high regard. The most senior marketers develop the strategy and design the programs. Deployment is typically the preserve of local and more junior members of the team. Yet in truth, deployment is not posting something to the web or mailing it to clients but working with the account team to help make the program come to life. As the market becomes more complex, effective deployment requires growing amount of skill and experience. The situation is helped if all design works starts with a consideration of the market and how the program is to be used, but it is only resolved if support is actually provided for customisation and use with clients.
The marketing process – giving leadership control
The fundamental reason why so much marketing lacks focus, coherence and effective deployment is that firms have lost sight of the strategic marketing process that links their strategy to execution and confuse it with the marketing function. As the marketing function has been professionalised and centralised, the focus has switched to organisation and specialisation but oversight of the wider process has been lost.
The sustained success of a firm depends on its ability to identify, stimulate, shape and respond to demand more effectively than its competitors. But for such a central process, few firms have a holistic approach. The day to day demands of serving individual clients focuses the mind of leaders on the specific and frequently the short term. The growth of more focused individual performance measures drives accountability and seeks to deliver more equitable returns, but with only the hope that the aggregation of individual achievement will grow the whole. The bigger picture becomes obscure and the annual planning process, typically more focused on budget than market, provides limited opportunity to redress the balance.
As the marketing function has been professionalised it has fragmented into a series of more or less specialist support teams, each with their own focus and sometimes with separate reporting. Critical competencies such as project management, thought leadership development, and writing have now become full-time careers in their own right. Business development used to be the activity that client-facing professionals undertook but now it is often a professional team separate from marketing. Communications skills are a central competence of all Marketing professionals but in some extreme cases is now also a separate function. The overall process has been weakened by structural fragmentation.
There needs to be a strategic managed process at the heart of a commercial organisation that connects the business strategy to the market and which influences many of the other operational processes of the organisation. Ideally it is a dynamic process continuously scanning the market horizon, assessing effectiveness and re-allocating resources as required. It is both central and essential to its future success. We say that what gets measured gets done but in truth “measurement” is a proxy for visibility and accountability. This strategic process needs to be made explicit and made someone’s responsibility.
The marketing process is not owned by the marketing function. It is far too strategic and important to be owned by anyone but the senior business leadership. Indeed, uniquely to professional services, everyone in the firm is actively involved in shaping the brand and delivering the brand promise. But it is a complex process that calls for specialist skills and constant attention and this is the role of the marketing function. To support and shape this process, to ensure alignment and measure effectiveness, marketing needs to have an empowered place at the decision making table. Good marketing cannot be done to an organisation but it equally cannot be done by an organisation without highly skilled and empowered professionals. Organisations get the marketing effectiveness that they manage and empower.
A need to change
There was a time when tobacco and fast food was marketed as healthy. Today we rightly expect consumer marketing to be scrutinized for accuracy and penalise those companies and campaigns found wanting. In the post crisis world of professional services, is it too much to imagine the same standards being applied. When companies review their service experience, have they found “high performance delivered”, “complexity cut-through” or a “better working world” has been built?
The apparent serenity of most senior partners masks growing operational and financial pressures. Swan-like they pass along but beneath the surface the paddling is getting frantic. There is a crisis of purpose, economics and governance that threatens individual firms and could reshape the entire sector. Sustainable success cannot be achieved through cost reduction alone. It can only be achieved in the market through profitable growth. A strong brand and proactive go to market activity are key. Reconnecting the firm’s formal marketing to its actual business development, through sharpened focus, increased coherence, supported deployment and an actively managed process, is central to attaining both goals.