Expertise Marketplace - Professional Service Firm Marketing Blog

I'm tracking others' insights - on Pricing and Value Propositions

I've been watching Chris Marston's blog.  At first glance, it appears he's just one more of many law-firm-management commentators.   But take a closer look.  For you non-law-firm professional service marketing leaders, Marston is one of the few who talks about PRICING and VALUE for clients. 

I love his comments on his late-summer post on the 4 C's of value pricing:  "(Say it with  me now) The Price of work has NOTHING to do with time."  Or this post, even earlier in the summer: "Outside in pricing is about looking outside of the four walls of your office building to determine what your work is worth to the client. Did you ever think to ask your client what it is worth? Why not? "

I still can't believe how often professionals -- even marcom consultants with whom I work -- are still using the hourly-pricing model, or who haven't pushed clients to re-think it themselves.  (If they did, they'd have to address their own value propositions. ) 

Marston is right on; as professionals, none of us should be afraid to find out the REAL perceptions of our value to our clients. If it means we have to push ourselves to improve, so be it. 

It's no fun otherwise. 

I'm tracking others' insights - on Innovation

I've been watching how other bloggers address topics that I think are critical to the marketplace leadership of professional service firms.  Take a look at what I found recently, followed by my own remarks. 

High-fives to Michelle Golden, whose blog mostly focuses on law and accounting firm marketing, for providing a close look at how she advises clients on integrating service improvements (both to the offering itself and to its delivery) into a marketing plan.  Golden does a great job of illustrating the link between Marketing and a firm's Operations side, as well as the role of the individual fee-earning professional to ensure a focus on this critical area.  How many consultants put illustrations like this on their blogs?  (Only the ones who are actively generating their own innovations, that's who.)

I'm tracking others' insights - on Value Propositions and Differentiation

A tip of my hat to Brian Sommer for his Services Safari blog, which has a focus on "improving professional services." 

He's got three great posts that all address the links between a firm's distinctiveness, client-perceived value, competitive advantage, and targeted marketplace focus.   Each one has a unique angle:

• Resurgence in Big 8 - Sommer comments on a CFO Magazine table that outlines revenue and staff shifts in accounting firms from 2001 and 2006.  Regarding the table's data on revenue per professional, he remarks:  "Buyers of these services should question though the real value they get from an audit staffer billing out 3-6+ times their fully burdened cost though. I’m not convinced that true value is accruing to the clients and that these costs are appropriate."   Brian, you're looking at the power of well-conceived and well-implemented branding to drive pricing UP!
• What Do Clients Want / Like?  - Here's a real gem for marketing leaders trying to find a way to start a conversation with colleagues about analyzing clients' emerging needs and satisfaction.  Referring to a graphic in Global Services magazine, Sommer says it "shows that offshoring is more satisfactory to executives than outsourcing while the latter is used more frequently."  He concludes, "More consultancies should survey their client base like Bain did if only to find out what clients want and how well their services are satisfying clients."  I think I've died and gone to heaven!  And what if these consultancies and other professional service firms went further than that, and also analyzed the relationship of satisfaction to profit margins, and then to innovation opportunities?  Someone get me the smelling salts.
• Building Moats Around Service Firms -- Sommer unveils a key insight about the cultural influences within most professional service firms.  He says,"Service firms are more often known for fast following of someone else's ideas. In fact, fast followers are experts at breaching someone else's moat."  Oh so right!  When it comes to building a durable and pre-emptive competitive advantage, most professional service firms fall back on copying the first movers, many of which didn't build a big enough edge in the first place.  Why?  Because it's hard, and harnessing groups of people to do hard work takes time and cost (gulp!) money.  But the cost of not building a pre-emptive edge is BIGGER. Sommer also says, "When you do see moat building in professional service firms, it often takes the shape of trying to ingratiate oneself to a client and keeping out other service firms via fawning and client entertainment."  Right on again, Brian.  Client relationship management initiatives are smart business, but can only take a firm so far.  The "value" game always wins. 

I'm tracking others' insights - on Marketing Roles

Here's a roundup of some important insights I've found on others' blogs, with my remarks about why you should read their posts.  These posts are about the evolving role of Marketing.

Check out Bruce MacEwen's blog about a McKinsey article on the evolving role of the CMO.  MacEwen adds his observations to a discussion I've been leading for a long time: the shift that's already underway (but that needs to be managed more carefully than it is now) in the role of Marketing and Sales in a professional firm.  Bruce recaps and makes his own astute observations about how this shift can be better conducted in a law firm. 

Gerry Riskin, in his Amazing Firms, Amazing Practices blog, offers his own thoughts. He writes "ask your Managing Partner to ... have a meeting with you to discuss the benefits the two of you can achieve from selectively implementing David Court’s suggestions.  I am well aware that many CMOs do not have the influence they deserve inside their law firms..."

Mark Beese offers his own insights, from his law firm's work in structuring a marketing/business development team.   

Bruce's, Gerry's and Mark's remarks touch on part of a deeper look I plan to take in my upcoming book on reinventing the marketing and sales function at professional service firms.  But why does it appear that only law firm observers and consultants are talking about this subject? 

I'm tracking others' insights -- on Economics

Here's a roundup of some important insights I've found on others' blogs, with my remarks about why you should read their posts.  These posts are about economics, which is a terribly under-considered subject in the professional services arena.

• Knowledge Management Yesterday and Today -- Bruce MacEwen, writing in his Adam Smith Esq blog, has recently posted another gem.   His focus is on the economics of law firms, but he makes great points on the economics of any professional service firm.  This post, about knowledge management, reminds us again about the critical link between marketing and intellectual capital. If your marketing purview DOESN'T include shaping your firm's intellectual capital, or if no one else at your company is leading this effort formally, it will be increasingly hard to maintain your competitive edge.
• Take a look at the remarks of another law-firm thought leader and blogger, Gerry Riskin.  In his review of an article about the the impact of offshoring for law firms, Riskin cites "sobering information especially for those who hope that it means offshoring will just fade away sooner or later."  I've tried to raise awareness about this issue, too.  How many professional service firms are working TODAY to consider the impact that offshoring will have on their firms' future marketplace position and economic health?    

Nothing new to say?

More great stuff on consulting firms' thought leadership effectiveness (or the lack of it!) from Fiona Czerniawska, featured in a recent issue of Management Consulting News.  Her report, White Space 2007, examines "the most, the best and the worst [thought leadership] material produced by top global consulting firms." 

The focus this time is HR consulting firms, including Towers Perrin, Hay Group, Hewitt, and Mercer, among others.  Czerniawska concludes HR firms "struggle to find anything new to say" about issues on which they focus their attention.

With both the quantity and quality of their thought leadership in decline, the HR firms badly need to invest more time and resources in this business-critical activity. If they don’t, they may lose market share and business to firms with a broader base of consulting offerings.

Czerniawska's point is a strong one, but nevertheless, I hear and see so many professional firms struggling with this issue.  But it's a no-brainer:  figure out what your clients' biggest struggles are, then research cutting edge solutions (or test some that clients haven't thought of!) and publish the findings.   

This is classic Research and Development, but it's a serious challenge for most professional firms.  It requires them to get better at overcoming their internal hurdles, and to focus more externally on their clients.   Many firms are having real problems in this arena! 

But as Czerniawska rightly implies, it usually takes a competitor's encroachment before real muscle is applied to making headway.       

Network your way to success? Puh-LEEZ!

I'm up to my ears with books about how to become more personally effective in making business connections, building relationships, and networking my way to success.  Why, all of a sudden, are there so many books about relationship-building and "connecting?"  I admit I liked last year's book by Keith Ferrazzi, "Never Eat Alone."  I know Keith, and he has the professional services chops to offer credible tips for accountants, actuaries, engineers, lawyers and other professionals to (gather the courage to) engage people in a personally valuable way. 

So, what pushed my puh-LEEZ button?  It was seeing Jeffrey Gitomer's book "Little Black Book of Connections: 6.5 Assets for Networking your way to RICH relationships" featured on the 800CEOread blog.  This book, among other things is ". . . about how to say the right things to the right people in the right circumstances to make the right impression." 

I admit it: I have never heard of Jeffrey Gitomer ("the country’s #1 sales trainer").  He's probably a fabulous expert.  I could probably learn a lot from him.  But I'm put off by what appears to be glib promises, and packaging that seems a bit over-the-top ("The book is small. The cover is classic black cloth. The four-color text graphics makes it attractive and easy to read ").   

Why am I so peevish about this?  I know that getting professionals to become better "people-people" has never been more important in steering professional service firms to achieve marketplace gains.  Most of the senior marketers I know have, at one point or another, had to offer (even require) training for their experts on building relationships.   (And of course there's the inevitable alternative:  not requiring professionals to network at all ("Our professionals simply need to be the most skilled experts that they can be.  We've created a separate sales team to do relationship building and networking!").  But that's for another post.)

So here's the question:  What's the best book you've ever read about relationship building, networking and the like for your firm's professionals?  Why?  What's the best "take-away?"  

To tell you the truth . . .

Whether your professional service firm uses the seller-doer model or a staff-side business development approach (or as many PSFs do, both) the issue of trust in selling professional services is paramount.  That's why I recommend Charles Green's latest book "Trust-Based Selling."

One of the key themes of this book is the importance of telling the truth, and its impact on the eventual depth of the relationship with buyers. 

Come on, we all know how difficult it is to pull the trigger on telling the truth, especially when there's money at stake.  Green offers practical guidance on meaning what you say -- and saying what you mean.  It can be as simple as, "I will call you tomorrow with an answer."  It can be as devilishly difficult as, "Well, no, our firm is actually not the thought leader in this particular methodology."

One of Green's key points is the importance of actually caring about your client, and not faking it when it's not real.  The book, says a reviewer, is about "how to be honest and successful at the same time."

Everyone:  If you have examples about telling a difficult truth but "making the sale" anyway, please send them in here!

Two valuable sources of marketing insights

I'm pleased to be included as one of the authors on two Internet publications. Rain Today features marketing and selling content that is specifically targeted to professional service firms.  Marketing Profs ("Marketing know-how from professionals and professors") has a broader industry purview, but offers valuable content for the professional service sector. 

Both of these Internet knowledge channels feature some level of subscription, but it's generally worth it because the knowledge they feature appears to be quite good.  Here are links to two of my articles, just so you can get a flavor for their offerings. 

On MarketingProfs, I discuss the Five Goals of Effective Chief Marketing Officers (ranked at the moment as one of the site's most popular articles). In my RainToday article, I posit that PSFs could be more effective in achieving their marketing goals if they used more effective ROI measurement techniques. 

Both articles are based on the findings from my recent 2006 study, "Increasing Marketing Effectiveness at Professional Firms," that I conducted in partnership with Larry Bodine.