Marketing & Branding a Professional Services Firm

Presented by : Robert Sawhney – SRC Associates LtdVenue: Hong Kong Institute of CPAs, 27/F., Wu Chung HouseDate: 24th Oct 2012

2

Disclaimer

The materials of this seminar / workshop / conference are intended to provide general information and guidance on the subject concerned. Examples and other materials in this seminar / workshop / conference are only for illustrative purposes and should not be relied upon for technical answers. The Hong Kong Institute of Certified Public Accountants (The Institute), the speaker(s) and the firm(s) that the speaker(s) is representing take no responsibility for any errors or omissions in, or for the loss incurred by individuals or companies due to the use of, the materials of this seminar / workshop / conference.

No claims, action or legal proceedings in connection with this seminar/workshop/conference brought by any individuals or companies having reference to the materials on this seminar / workshop / conference will be entertained by the Institute, the speaker(s) and the firm(s) that the speaker(s) is representing.

3

State of Play

• Financial crisis• Globalization• Demanding clients• Dissatisfied professionals (Gen Y)• Opening of emerging markets• New competitors• BPO• Technology • Challenges of knowledge generation and

sharing• Social media and user generated content

4

How PSFs are different?

• Product resides in the structural, social, and human capital of firm (IC)

• Key marketer is the professional who interacts with client• Differentiation is harder to achieve – ‘we do better audits’• Branding at the individual, practice group, and firm level• Marketing and BD coupled together – misunderstanding?• Professionals don’t take easily to being ‘managed’, strategy

bottom up and involves all or no one (are they interested)?

5

The Power of Context

Experiment at Princeton University in the US Good Samaritans (seminarians of The Princeton Theological

Seminary) were asked to deliver a short talk on the bible at a nearby venue

The Samaritans split into two groups: one told they were late, the other told they were a few minutes early

Variable: ‘victim’ outside building 68% of the early group stopped to help, only 10% of the late

group? (Source: The Tipping Point by Malcolm Gladwell)

6

Marketing is dead! – the wrong context

7

The right context!

What do clients want??• Client focus. • Commitment to help by suggesting strategies and demonstrating

interest. • Understanding the client’s business. • Providing value • Responsiveness and proactiveness• Advise on business issues. • Unprompted Communication • Keeping clients informed. • Show skill in expertise, experience and outcomes. • Quality work, show attention to detail. • Ability to deal with unexpected changes. • Handling problems quickly and effectively. • Meeting client-imposed scope of work and deadlines. • Anticipating client needs..• Firms and professionals which are empathetic, reliable, and flexible

8

What stops this? Hourly billing that does not recognize value and creates

conflict of interest between client and firm Focus on billable time and utilization rates Associates trained in technical skills but not in management Professionals with high IQ and little EQ Firm structure that inhibits cross functional sharing of

information Professionals with little formal business training Senior partners with high resistance to alternative ways of

working Fixation on practice areas as opposed to client problems Focus on cross selling without understanding client needs Lack of understanding/acceptance of marketing techniques

such as research, segmentation etc

9

Quick Case Harrex Group, NZ (source: J of Accountancy, 2008) Founded in 2007 by Brendan Harrex, first chief value officer at his former firm He says focus on time and cost only creates illusion of managing a PSF What really matters is value creation No more hourly billing, a change of culture Key Performance Indicators for Harrex:

* Ability to think strategically on behalf of clients* Client Communication

* Delegation* Turnaround Time* Client Feedback

* Effective Listening and Communication Skills* Knowledge Elicitation/Coaching

* Risk Taking, Innovation and Creativity* Continuous Learning

* Passion, Attitude and Commitment* Team Player

10

What Does it Mean to be Market Oriented?

• Marketing is a business philosophy that puts creating and delivering customer value at the heart of all that an organization does

• It is an organization culture that acquires and disseminates information-cross functionally and across hierarchies, and acts upon that information

• This sharing and information coordination tolerates no functional silos

11

Bed rock of firm performance

Client value, satisfaction and

firm performanceMarket based strategy and strategy

implementation (based around the 17 factors)

Client orientation

Competitor orientation

Inter-functional coordination

12

Marketing and client value

• Firstly – what marketing is not:• Promotion• Clever logo and new brand name• Run by the marketing/BD people• Something that can be turned on and off according to

prevailing conditions• In its entirety, something that cannot be measured using ROI

13

Cont’d

• What it is:• A business process about creating client value• A firm culture that has the most significant impact on firm

performance• The guiding force for strategy and strategic management • The bed rock of firm performance (market orientation)

14

Now You See

This is what we mean by adopting a marketing culture Peter Drucker said years ago that firms have only 2

functions: marketing and innovation, the rest are costs But when he said marketing, this is what he meant. The

adoption of the marketing concept into the very fabric of a firm

15

Branding PSFs

• Branding in PSFs is not about logos, advertising, or new stationary, it is about the skills, knowledge, and interactions that the human assets of the firm have in the market place. Branding in PSFs is different because: 

• Professional services are essentially intangible and hence differentiating the firm is both different and difficult

• The professionals in the firm hold all the capital, if they don’t ‘buy into’ the brand, there is no purpose in branding at all

• Clients will not choose a provider due to a new promotional campaign based on a new logo or image

• Clients choose the individual as much as the firm, hence there should be a balance between firm brand and individual brand

• Consumers in Asia are much more critical of professionals advertising than those in the west, hence advertising is less effective

• Branding is about the values, people, and work processes of the firm, in this case, branding and marketing are almost synonymous

16

Branding and Fees

A recent research study from RainToday.com and the Wellesley Hills Group titled Fees and Pricing Benchmark Report: Consulting Industry 2008, finds that while brand leaders (27% of responding consulting firms) and “not very well-known” firms (73% of responding consulting firms) have similar standard / book rates, the hourly rates brand leaders actually get were always higher than their counterparts. The increase by level of professional is as follows:

•   Highest-level professionals (CEO, Principal): 20% higher •   Upper-level professionals (VP, New Partner): 11% higher •   Advanced-level professionals (Directors): 29% higher •   Mid-level professionals (Managers, Post-MBA): 20% higher •   Entry-level professionals (Associates): 35% higher

17

The Branding Process

• Vision, mission, and business strategy• Marketing strategy• Firm culture and values• Firm history and background• Staff perceptions and needs• Clients and industries served• Client perceptions of firm• Services offered• Competitive environment

18

CHANGE!!!

Its about a change of mind set and perception

19

Thank You!

If you want any of the full references for work cited or have any questions, please feel free to contact me:

bob@srchk.com, www.srchk.com Blog: www.marketingasia.typepad.com Twitter: http://twitter.com/robertsawhney