Expertise Marketplace - Professional Service Firm Marketing Blog

Pricing: An Elephant in the Professional Services Room?

Kudos to RainToday for launching a study on pricing in professional services (even though it only covers U.S. firms).  Some of the things the study will cover include:

• firms that have been able to charge higher prices to see what they do differently than those with average and lower fees
• how brand recognition affects the ability of firms to charge higher prices

But for me, especially as I dive into writing my next book about erasing the silos between marketing and selling in PSFs, the really big questions are these:  How do firms go about coming up with their fees, and what's the role of pricing research? I wonder how much PSFs are doing, at the executive or practice level, to understand where the market is (clients' feelings about prices, competitors' pricing practices and oh, of course, THE ECONOMY).  Do business developers and marketers actually work together on this issue? 

The answer is, I'll bet: NOT ENOUGH.  Complete the questionnaire and please prove me wrong.

I think the findings will corroborate my own research that there's not nearly enough rigor being applied to this huge marketing and selling integration issue.  Talk about a functional disconnect:  Most PSFs' pricing policies aren't policies at all.  Prices are still set too tactically.  Many hard-working business developers are charged with the huge responsibility of morphing their firms' fee structures on the fly, and justifying their decisions later.  And there isn't enough focus on the marketplace ramifications of shifts in pricing.

Do PSF practitioners WANT to market and sell?

I hope you can take a minute to help me with research for my upcoming book.

Are your professional service firm's (PSF) Marketing and Business Development functions operating as disconnected silos? Could these functions be more effective at collaborating and sharing accountability?

Let us know how your firm is doing at integrating its Marketing and Business Development functions, and then find out how your firm stacks up against others on erasing its organizational disconnects in Marketing and Business Development.

Here's the first of our quick surveys whose findings will be featured in my upcoming book, The Integration Imperative™: Erasing Marketing and Business Development Silos - Once and For All - in Professional Service Firms.

Please take this super-short survey and we'll give you a chance to see the results before anyone else. (Later, we'll post the results here and in The Marketplace Master™ newsletter.) If you have a blog of your own, you're welcome to post the results. 

Take our short survey

Can PSFs "PSF" themselves?

Tom Peters has invented a new verb: to PSF.  I love it! 

Tom Peters has a slew of posts this week here, here, here, and especially here, about how companies can PSF themselves, essentially creating a new internal department or initiative that brings new and very unique value, and innovation to an enterprise and to the marketplace. 

Peters writes breathlessly about what's happening at Schlumberger:

As I see it, and you doubtless know my longterm, noisy bias toward the "PSF-as-center-of-value-added" (PSF = Professional Service Firm), Schlumberger is transforming itself into the biggest and most powerful "PSF" in history. Moreover, paths like this, from IBM and UPS and Best-Buy to Schlumberger, are open to many firms.

So right!  Now, can PSFs bring this same excited professional passion to transforming THEMSELVES?  Do you see this happening at your PSF?  Could you outstrip your rival if your PSF "PSFs" itself, as Peters urges?  Is your PSF doing Peters' WWPF - Work Worth Paying For?  Is your PSF "destroying organizational barriers?  ... Wholly reimagining the entire enterprise?"   

It's an exciting, yes, even thrilling, notion.  (Or do I need to switch to decaf?)

Do tell, readers and fellow bloggers: Are PSFs PSF-ing themselves?   

Are you "cup half-empty" on Marketing ROI?

Paul Dunay is.  I just received his latest Buzz Marketing for Technology newsletter, which featured a link to an intriguing post entitled "Is ROI Killing Marketing?"

Dunay's got a special facility for exaggerating to make a point  (he even says he does this on purpose!).  This is a technique that actually DOES make people stop and think. But when he cited his very first example of how ROI may be killing marketing, I found myself in disagreement.  He wrote:

"... consider internal branding campaigns. With little to show other than happy employees, this initiative would fall to a second tier initiative since lead generation activities would normally be needed to calculate your ROI. As a second tier initiative it is fine. But who can afford to have that as a first tier initiative anymore if you are only judged on ROI?"

This is a simplistic portrayal of both ROI initiatives and internal branding campaigns, and, although Dunay's readership is broadly targeted, it's especially simplistic for professional service firms (PSFs).  For the PSF sector, employees ARE critical embodiments of the brand promise, so internal campaigns are crucial, and happy employees are not the sought-after result (although of course happy employees are also critical, but it's likely not because of an internal branding campaign). 

And it's simplistic related to ROI initiatives in the PSF arena too, since the connection to the marketplace is highly nuanced and complex.  I don't know ANY PSFs that only judge people on ROI.  The truth is, they don't measure ENOUGH on ROI, even as part of other performance standards.

Despite my critique, I think Paul Dunay does a great job of reminding us to look at where we should put our emphasis -- and make deliberate choices to make our efforts count!   

From "Out of the Box" to "Zero Gravity" Thinking

I'm humbled to be mentioned as being a valuable non-lawyer resource for lawyers by Patrick McKenna.  

In his December 30, 2007 post # 271, McKenna cites me among a number of other professional service bloggers who "will break some windows and let in some fresh air."   Amy Campbell picked up McKenna's post, and cites a great New York Times article that "offers anecdotal and scientific support for bringing people with different skill sets — even (gasp) outsiders — to the table." 

Thanks for the mentions, Patrick and Amy! 

I told the truth -- and got hired anyway

Liar, liar, pants on fire!

For those of us -- ahem -- seasoned pros, we're supposed to have handled every type of engagement, right?  Our prices are set to match our marketplace tenure, right?   We want to be recognized for our experience, right?   

OK.  Tell the truth.  You HAVEN'T done it all, have you?  There are some types of assignments you HAVEN'T actually worked on.  Professional service marketers and business developers know that seriously UNCOMFORTABLE feeling when a potential client asks: "Have you ever done this type of work before?" or "Have you worked for a firm like ours before?"  (And we know how critically they need us to proclaim, "OF COURSE!")

Last month I had two such moments.  Prior to the inevitable questions, I had made a decision not to try to fake it in any way, but to tell the unvarnished truth.  (Which is good, because I'm a lousy liar.)  I said, "Well, no, I have not worked for a firm like yours before."   

Both times, I forced myself NOT to rush ahead with a too-anxious, too-glib explanation.  I waited and waited, for what seemed like eons, for the inevitable replies, "Uh ... well ... then, what makes you think you could help us?"

Both times, I had carefully prepared my answers.  I tried to think ahead about what would reassure these potential clients that I could indeed help them.  I addressed my shortcomings with my heart in my throat. 

And, incredibly, both times, I got hired for important marketing strategy engagements -- without having to give references (another shocker).

OK all you professional services marketing and selling gurus -- why did these great clients hire me?