Expertise Marketplace - Professional Service Firm Marketing Blog

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!   

Pay attention to anomalies and other nuggets from a conference

I went to a conference on Measuring Innovation Performance yesterday.  It was the first time in too long that I was an attendee, not a speaker, and so I enjoyed myself immensely. 

Some of the content related to classic business strategy, some to differentiation.  Some of the best nuggets related to professional service firms (PSF) included:

• When assessing the viability of any particular business strategy, make sure you understand the risks involved. There are three types of risk:  1) technical, 2) executional (can I do it?), and 3) market/competitive risk. Ask yourself the risk of pursuing the strategy and the risks of NOT pursuing the strategy.
• Quality is directly linked to innovation.
• Assess opportunities as well as risks. Most companies forget to do this. But when thinking about opportunities, remember there are COSTS to pursuing opportunities. (“This opportunity will cost us $x.  What other things could we be doing with this money that might be more important to us?”)
• Industry knowledge is a key differentiator.
• When thinking about differentiating with your people, hire TALENT over experience.
• Innovation ROI should be thought of more broadly than many firms do:  it’s more than CASH, but also indirect benefits.
• Pay attention to anomalies. (My favorite!)
• Most firms operate from a budget mentality. Too few operate from an investment mentality.

I found, once again, that most of the presenters and examples were product- and manufacturing-focused.  The professional service firms in attendance were left to extrapolate the models, concepts and frameworks.

 

Wouldn't it be great if content could be pertinent and readily available to the global, $3+ trillion professional services sector?  Or that thought leaders would GET it that we are unquestionably in a SERVICES economy?  Maybe I'll have to write another book, or develop an institute targeted especially to PSFs.

Could be fun.   

Money's pouring in; why are these people crying?

Just today, I had conversations with two people in different levels of seniority and in different professional sectors about a scenario I had hoped would never occur again: as a firm rakes in the revenues and profits, resistance builds to investing in tomorrow's marketplace advantage. 

Conversation #1

A marketing manager in a very prominent professional service company called me today to ask for advice about how to defend her firm's investment in relationship management technology.  Some of her colleagues, she reported, are questioning the large level of effort being made to hone the firm's contacts management and relationship intelligence applications.  At what point, they ask, does the return on investment start to diminish on developing marketing technologies for all this future business development?   "Money is flowing in, aren't we being just a little too focused on all this targeting and segmenting stuff?"   

Here's what I told her:  Yes, it's tempting to reduce spending time and money to refine your marketing technology infrastructure. Sure, someone should keep an eye on the internal marketing "spend," and it's inevitable that questions arise when a significant effort is made.  But your investments today will make it more possible to proactively manage when the next marketplace downturn occurs.  Respondents to the "Increasing Marketing Effectiveness" study soundly endorsed targeting, segmentation and relationship management programs as "best results" marketing initiatives (even the technological aspects of it!).  Don't overengineer your marketing and business development technology, but don't forget why you decided to invest in this arena to begin with.      

Conversation #2

The president of a small but well respected professional service firm called to ask for help on defending some branding strategies that he believes will help the firm attain market leadership in the future.  Unfortunately, his early trial balloons on his branding idea have met with significant resistance.  The firm is in the midst of a blockbuster year, making more revenues than ever before.  With all this money, his colleagues see no reason to make a change in the brand strategy at all. 

Here's what I told him:  You should be glad that your brand strategy decisions from several years ago have led your firm to the point that it's able to capture the marketplace gains it enjoys today.  Nevertheless, any professional service firm must be prepared to evolve its brand strategy in order to grow in the future.  (Isn't that the very point of developing a strategy in the first place?)  Equity owners owe it to their shareholders and partners to anticipate growth, and to develop a brand architecture that fosters that growth.  If the current brand strategy shows signs of limiting that growth, it's time to re-think it!  In my book Marketplace Masters, there are numerous examples of professional firms that forgot to pay attention to their journey in the marketplace.  Don't be one of them.

The bottom line: Don't let the waterfall of today's money wash away your critical thinking about tomorrow's competitive advantage. 

Listen to me! Part 3

Here are excerpts from a further exchange between me and Bruce about how to measure a professional service firm's listening activities. 

Bruce: if I understand the description of qualitative research correctly, this survey is conducted in a manner that allows interaction and follow-up questions, as opposed to a typical mail-out survey that asks customers to fill out a questionnaire and return it.

Suzanne: yes, but it can also include the mail-out kind of survey; I just don't think those are as useful when one is dealing with the marketing of complex and intangible services such as architecture and engineering.

Bruce: is it possible that soliciting customer comments on our web site (then acting on those comments wherever appropriate) also constitutes listening?   

Suzanne: yes, but be careful.  First, this audience self-selects, so you don't hear from all the rest of your targeted clients.  Second, it's one way, and not as conducive to real listening.  Third, the real crux of the listening metric is that it's supposed to evolve ahead of the clients, and not be a static initiative that doesn't change for years.  Remember, the game is not to assess customer satisfaction -- it's to improve your marketing effectiveness. 

Bruce: assuming I understand listening correctly, what makes this approach any more objective and fact-based then the more traditional/conventional type of survey? 

Suzanne: this actually is a question about how to conduct qualitative analysis, as I mentioned in my "Listen to me! Part 2" post from a few days ago.

Bruce: is it the ability to interact and refine their response based on follow-up questions? 

Suzanne:  You can set it up this way, yes. 

Marketing ROI: getting started

Last week, I co-presented a webinar on my 2006 study with research partner Larry Bodine, "Increasing Marketing Effectiveness," for The Society for Marketing Professional Services.  One of our slides showed the paltry sum (1/10th of one percent!) that professional service firms formally budget to monitor their marketing effectiveness. Right after that, we showed them one of our boffo findings:  a significant statistical connection between having a formal marketing measurement budget (even a small one) and competing extremely effectively.

Since the webinar, we heard from gotten numerous questions about how to properly set up a formal marketing measurement program. 

I gave Marcella and Heather and Karen and Maria some quick advice on how to get started.  Here's an expansion of my thoughts about what you should do and not do:

• DO use your good judgment to conceive of a few potential marketing measurement projects.  make sure they are well-defined and well-framed. Consider, if you have to, a pilot measurement project that you'll lead under the auspices of one of your firm's marketing champions. 
• DO NOT plan a massive, complex, multiple-office or practice-wide marketing ROI project.  Starting too ambitiously can set you up for a hard fall. 
• DO show your professional passion about the importance of marketing and developing business more rigorously.  Show your senior colleagues the factual connections between marketing measurement and competitive success.  Use our study findings.  If you have to, go elsewhere for additional evidence.
• DO NOT back down when naysayers tell you they already know how well the firm is doing.  Tell them about the evidence that anecdotal and subjective measurement techniques are associated with less-than-extremely-effective professional firm competitors. 
• DO prepare your senior colleagues for a formal measurement initiative for 2007. Tell them you're going to require a specifically protected sum of money and/or people resources in order to undertake measurement.  
• DO NOT underestimate the importance of internally marketing the firm's commitment to measuring itself, even if you don't yet know exactly what will be measured.  You will have to overcome internal resistance. Be reassuring that measurement will lead to increased competitive effectiveness.  Don't give up. 
• DO seek the input of your firm's internal influencers about which meaningful marketing or business development initiative they feel the firm needs to measure.  Make the case for your own suggested initiatives, from your preparations above.  Make sure you help them choose an initiative that is clearly related to the firm's revenues with clients.
• DO NOT let your measurement project be derailed when budgeting time comes. Continue making the case for formal measurement.  Don't be afraid to use some of your personal and political capital to ensure that your measurement project will go forward. 
• DO position your measurement program as an objective look at the firm's marketing strategies and tactics.  A marketing department is not solely responsible for the success or failure of a marketing initiative.  Let's say you want to measure an upcoming seminar.  Ensure that your metrics are related to client outcomes, and that they focus on tangible facts, unequivocal elements and non-ignorable input.  Make sure you measure significant client feedback.  It may not be important to know that they liked receiving their invitations six weeks in advance; it's more important to determine how highly your attendees rated the content. 
• DO NOT fall prey to the temptation to measure individual performance. In this case, you are measuring marketing initiatives on the merits of the initiative themselves. 
• DO position your measurement initiatives as being objective enough so that improvements can be made in the future.  Communicate clearly that you intend your measurement initiative to be the beginning of small but significant measurement initiatives that will have a positive impact on the firm's marketplace growth.
• DO NOT be afraid to call something a "failure."  “Failures” should be positioned as opportunities to challenge the firm's strategic assumptions and make appropriate competitive changes.
• DO communicate about the measurement results and your "lessons learned" after your first marketing measurement project.  Repeat the initiative, and revise your measurement metrics to provide continuously more meaningful and actionable information.
• DO NOT give up on measuring.  Even if some of your senior colleagues express skepticism about the value of formally measuring marketing and business development, make sure you stay on target.  Cultural change will happen. 

Listen to me! Part 2

Larry Bodine and I published an article on measuring the effectiveness of branding ("Branding: Let's Not get Fooled Again!") (Download smps_marketer_june_06_research_.pdf) in the June issue of the Society for Marketing Professional Services magazine, Marketer. 

One of our readers, Bruce asked:  "How does listening to the client get manifested in a way that is objective, fact based, and produces tangible outcomes?" 

The first part of the answer involves having skills in qualitative research.  People can be trained to find and analyze critical themes in qualitative research that, if outlined and agreed upon amongst a group of qualitative analysts, can then be turned into an objective, fact-based analysis.

I’ll give you an example of how this is done. For our 2006 study “Increasing Marketing Effectiveness in Professional Firms,” we asked the open-ended question, “What are your measurement approaches?”  For our first review of the answers, we looked for and grouped common themes. My statistician and I reviewed those common themes, and found that they fell into seven categories.  (This kind of collaborative analysis increases the possibility of objectivity).

From there, we reviewed the open-ended answers again, and assigned numbers from one through seven to each open-ended answer.  When we were done, we were able to see the relative frequency of use amongst each of the seven categories. From there, we were able to cross reference these 1-through-7 numbers with a whole host of other open-ended questions, some of which were also assigned objectively-based numbers. With this kind of analysis, we were able to correlate “competitive effectiveness” with the kinds of measurement tools being used.

I realize this may sound somewhat pointy-headed. It’s actually not that difficult, and I’ve seen an increasing number of professional service marketers using qualitative research and analysis to achieve more objectivity and more factual bases for making strategic decisions.

As for the “produces tangible outcomes” issue, this also perhaps requires a longer answer, but I’ll give it a try: I encourage professional service firms, when asking clients for feedback or perceptions, not to simply ask an opinion-oriented question.

Instead, client-listening initiatives should be pre-screened for their ability to tell the company what it should “do” next!  For example, why would it be important to ask a client what his perceptions might be of your firm, when there is no possible change you might make as a result of learning the information?  Instead, wouldn’t it make sense to ask clients a perception-oriented question whose answer gives you guidance on an activity that you can take next?

Too many professional service firms embark on client-listening initiatives, and pat themselves on the back for doing so, only to find out later that the client was hoping they would do something differently after answering the questions.  I think client listening is entirely too static in today’s professional service firms.  The “tangible outcomes” should be built-in to the listening activities from the beginning!

To learn more about the qualitative, motivational research techniques, take a look at the following link:  http://www.qrca.org/whatis_QR.asp, which might help you learn more.

Listen to me! Part 1

I had several great questions following last week's co-presentation with Larry Bodine at a Society for Marketing Professional Services webinar on our 2006 "Increasing Marketing Effectiveness" study results. 

Erin wrote:  “Could you comment further on the 'listen to your client' metric? What exactly do you mean by that?” 

There are really two issues to share with you, Erin (with some sub points!):

• Measuring Marketing is not the same as measuring Service Delivery. 
  • Many of our study respondents believed they were measuring their marketing effectiveness with their clients when they conducted post-project interviews or client satisfaction surveys. Instead, most of these initiatives are related to service delivery, and not the effectiveness of their firm's marketing strategies or tactics. For example, when a client satisfaction survey captures a client’s impressions about the company's ability to stay on budget, this kind of a measurement has nothing to do with whether the firm has capably targeted the right client, retained them properly, and grown business with them. Also, this kind of measurement doesn’t capture the clients’ perceptions of the company versus its competitors. 
  • Often a customer satisfaction survey is conducted with an orientation toward the past, when a real marketing-listening activity is aimed toward future competitive advantages. 
• Listening is too often considered a “noun,” and not a “verb.”
  • In our study, we saw numerous examples of professional firms using client satisfaction interviews, end-of-project surveys, and the like, as if they were static and unchanging vehicles. A true marketplace listening activity has to be revised, in order to capture cutting-edge information. Some of our survey respondents used client satisfaction surveys that have not changed in years. 
  • Also, in many cases, professional firms’ listening initiatives were not treated as measurement initiatives; they were treated as communication initiatives! Instead, an effective “listening” activity is built from an “improving effectiveness” orientation. This is what we mean when we included “listening to your client” as one of the Client Metrics that were associated with “extremely effective” respondents. “Extremely effective” professional firms employ “listening” activities to monitor and adapt their strategic assumptions, to track the evolving client perceptions of their firm as a means to maintain a differentiation advantage, to test the acceptance of a new service, etc. All of these listening activities are designed as long-term elements of the firm’s marketing program. The vehicles – surveys, focus groups, interviews, and more – may look the same, but they capture much more strategic marketing information, all designed to fine-tune the firm’s marketing strategies and tactical approaches going forward.

The Baggy-Pants Marketing Syndrome

The June 20 Wall Street Journal "Page One" featured a laugh-out-loud article, "Perpetrator Problem: It's Hard to Run Away In Falling Trousers."  I loved reading the examples about cops catching the bad guys, who keep tripping while running away from the scene of the crime!

I'm not the only one who has wondered about the baggy-pants trend; how could something so uncomfortable, ugly, and yes, dysfunctional, become so popular?  What kind of personal branding are droopy-pants wearers seeking with this kind of style?  (I know, I know, if I have to ask, this branding is not meant to appeal to me!)

You might say it takes a sick mind to think baggy pants are a metaphor for some of the obstacles that most of us have seen in professional service firm marketing.  But just think about it for a moment.  Those droopy-drawer criminals are so enamored with their current style that they prevent themselves from achieving their aims (purse-snatching, stealing DVDs)! 

Could your professional service firm be stuck in "baggy-pants syndrome?"  It is if you hear (or say!) the following excuses:

• Marketing measurement is perceived as too hard, too costly and too time-consuming
• Our marketing leadership is new
• We have no strategic or marketing plan in place
• There are major differences in philosophy, opinions, and cultural approaches to Marketing
• Our firm is too small to have our marketing act together
• We have no marketing or Marketing measurement budget

I wish I could say I made these quotes up!  These are verbatim comments taken from the 2006 research report, "Increasing Marketing Effectiveness of Professional Firms," that Larry Bodine and I published in February. 

All of these obstacles may be reasonable articulations of real barriers that must be overcome. Obstacles are a fact of life in the marketplace for professional firms. 

My main beef here is the complacent acceptance that "this is what things look like here."  This excuse becomes the foundation for the myopia, inertia and lack of accountability that exists in too many marketing programs at firms in law, accounting, management consulting, architecture, engineering, and many more. 

It's the same thing as wearing droopy drawers because you think they look cool.  Everybody else is doing it, but when it comes to running, all you'll do is fall down. 

The Wall Street Journal article ends with a suggestion that all it takes is wearing a belt to keep those baggy pants up.  What will you do to get your firm's marketing program up and running? 

Measuring the results of social media

Bill Neal, a market research guru if there ever was one, offers his insights on the phenomenon of social media, and the pitfalls of measuring it, In a fascinating interview here. 

In essence, Neal says we should measure the influence of social media participants, but we should do so with the understanding that they don't represent the input of a broad audience.  He says,

I’ve seen too many brand managers observe a focus group or two and then make major changes in their marketing programs based on what they heard in the focus group. Many of those changes are utter failures simply because the focus group was not a reflection of the real world.

You have exactly the same problem with monitoring consumer generated media, except that now you have the equivalent of thousands of focus groups. Does that make the information more valid or reliable? Definitely not!

He concludes:

measures of those phenomena must be both valid and reliable, and most importantly, they must accurately reflect the thoughts and behaviors of well-defined populations.

Wise words for professional services marketers who are considering jumping on the social media bandwagon!

Swim with the tide Part 3

For the past two days I've addressed a critical issue -- defining success -- for professional service marketers at new jobs or with new bosses.  My comments are based on a post about a new book called Sink or Swim, which says (in so many words), "You have 12 weeks to get it right with your new boss." 

Here's the 3rd of three pitfalls mentioned in the book, and my comments about it. 

• They fail to confirm and define what success looks like with their managers or the board. The eagerness to quickly demonstrate competence and results overshadows the critical need to clearly define success metrics and expectations.  Fail to define success, huh?  Now this is a problem area!  See below for my take on this pitfall.

Failing at the wrong goals:  Talk about swimming against the tide!  Many professional firm marketers still don't help their new bosses develop the appropriately strategic marketing goals for the firm.  So no wonder the metrics and expectations are off!  In the last 6 months I've been asked by numerous professional firms (including training and development, accounting, management consulting, real estate services, architecture, and law firms) to pass along their marketing descriptions for open senior marketing positions.  I have been consistently disappointed at how tactically oriented these roles are, and how myopic they are -- still overly oriented toward communication to acquire clients.  It's as if these firms assume they are marketing to the best targets and segments, with the best service offerings, when many are not.  The marketer can't succeed, and knocks himself out trying.  Instead, professional service firms should seek their marketers' help with Five Goals, which capture the true purview of a senior marketer, rather than the truncated set of responsibilities to which most have to agree. 

Unrealistic expectations:  Defining success has to incorporate the appropriate parameters to succeed, not just what the end result looks like ("grow our revenues!").  Many professional service practitioners ask, "How come we didn't get more people at that seminar," when in fact low attendance may have had nothing to do with the marketer's execution of tactics to invite attendees, and more to do with the lackluster content of the seminar.  Unrealistic expectations also come in the form of timing.  Using the seminar example above, let's say there were a good number of attendees, but they aren't ready to pull the trigger on hiring the firm for an engagement yet.  Nevertheless, the practitioner will want to over-communicate to those attendees, hoping to stimulate them to hurry up toward a decision.  Marketers know that over-communicating is held in little favor by decision makers, whose timetable is their own.

Unnecessary personalization:  "You didn't increase our revenues."  This is an egregious example of the pressure under which marketers work, with so little control of the "product" or the strategies that were adopted to market the firm.  Marketers are partially at fault here, because they allow their firm's leaders to take an incomplete look at the marketplace, or let them plunge ahead with assumptions and strategies that worked for yesteryear.  If the marketing strategies aren't working, there's something wrong with the assumptions or facts to begin with, or with the marketing strategies themselves (which are tied to appropriate goals!).  Increasingly, PSFs rely on marketers for more and more implementation for goals that are unworkable, too vague, too broad or simply the wrong goals.  When the results are disappointing, the marketer is viewed as less than personally effective.   

The Sink or Swim point "confirm and define what success looks like" is a huge one for marketers.  They need to get more buy-in for the proper goals:

• Goal 1: Defining and identifying the most strategically important prospects/clients
• Goal 2: Acquiring the most strategically important prospects/clients
• Goal 3: Retaining the most strategically important prospects/clients
• Goal 4: Increasing the firm’s amount of revenues with its most strategically important current clients
• Goal 5: Increasing the perceived value of the firm to all audiences (including suppliers and employees)

My take on the Sink or Swim key point?  You don't have 12 weeks to get it right with your boss.  Try to get it right before you start the job.