Professional Services Marketing Part 3
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For example, you might conduct a seminar or webinar and want to fil the room with decision makers, but in reality you generate little or no attendance. Or you manage to generate some attendance, but then you do a poor job of delivering content that wil help you connect with potential clients. (Try a hard-sel approach; most decision makers real y despise that.) Then you can ruin your fol ow-up by not doing it, doing it too late, or doing it poorly.
Maybe you set out to support lead generation and client communication with a web site; but you end up with a web site that no one can find, no one can use, is hard on the eyes, provides no value, is not client focused, and general y reflects poorly on your company. You might then employ direct mail for lead generation and generate no response-with no idea why it didn't work, and no way to find out!
Leave out the tactical expertise, and the terrible marketing outcomes you can achieve are endless.
Look Only at Your Own Industry and Compet.i.tion.
If you want your marketing strategy to never reach beyond average, make sure you look only at your own industry and compet.i.tion.
Let's say your company is an accounting firm. Make sure you look only at what other accounting firms are doing for growth. Ignore law, management consulting, technology, and consumer products companies. This is a great way to miss out on al the newest marketing trends, technologies, and possibilities. Plus, if you look only at your own industry for inspiration, you'l never be a leader. Being late to the game is a great component to a terrible marketing strategy.
Make sure that, when you're studying the compet.i.tion to see what they're doing, you look only at your direct compet.i.tors. Folowing the accounting example, let's say you're in a 50-person accounting firm outside of New York City. Focus only on other midsize accounting firms. Don't even think about considering what KPMG LLP or PricewaterhouseCoopers are doing, and don't worry much about what the 200-person firm might be up to.
They're too big for you to care about, and you don't want to get too much inspiration from companies that have grown wel or are larger than you.
Don't Create an Environment of Fervent Execution.
Even if you al ow your leaders to craft the company and practice area growth plans and if you have the tactical expertise to get things done, by fostering a culture where marketing and business development are second fiddle, you wil stay in the land of terrible marketing. A great way to get started here is to set action steps and goals and not hold people accountable to them. Professional services cultures are often good at making nice and not wanting to stir things up when someone isn't pul ing their marketing and business development weight.
You might think this is a tactical versus strategic issue. It's not. Company strategists and leaders must make sure the environmental factors that support performance are not in place: Don't set clear expectations or give feedback, don't make tools and resources available, and don't put incentives and consequences in place to guide people's behavior. (Or, dear CIA disinformation operative in training, set incentives that wil guide the wrong behaviors. See what that does.) To end up with the terrible strategy, it's also contingent upon leaders.h.i.+p to ensure that the people tasked with executing do not have the skils and knowledge, are not motivated to perform, and are not, indeed, the right people for the job.
Execution must not be made a strategic priority by leaders.h.i.+p-if it's not a priority, your marketing strategy has a chance to be not only terrible, but tragic. It's a fantastical y terrible and devious marketing strategy that has everything in place that could al ow it to succeed, and then fails because no one gets it done. These kinds of good intentions gone bad warm the little black hearts of many a terrible marketing strategist. Bril iant times two!
Don't Plan for Behavioral or Organizational Change.
Professional services firms are products of the col ective behaviors of the people within them. That's a mouthful; but, in essence, it simply means we are what we do. Marketing strategies are most powerful when they are bold, venture into uncharted territory, are creative and new, and require lots of energy and enthusiasm to be implemented wel .
Thus, almost without exception, a marketing strategy's success is contingent on some level of change, be it evolutionary or revolutionary.
Regardless of what you set forth in your plan, if the strategists and leaders aren't bent on making behavioral and organizational change happen, you'l end up with the same thing you had last year and the year before. Doing nothing different than what you have done in the past is sometimes, al by itself, a terrible marketing strategy.
Form a Marketing Committee, Then Take Them to Abilene.
A family in Coleman, Texas, was having a nice afternoon playing dominoes outside, when the father-in-law suggested, "Let's take a trip to Abilene for dinner." No one real y wanted to go, but they didn't want to seem disagreeable; so they hopped in the non-air-conditioned car and made the two-hour trip to Abilene.
Five hours later the family returned, tired, sticky, cramped from the drive, and recovering from the underwhelming cafeteria meal they had in Abilene. "Wasn't that a great trip," one of them remarked, thinking that everyone else had a good time but her. The mother-in-law then said, "Actual y, I didn't real y want to go but you al seemed to. I didn't want to spoil everyone's fun, so I didn't say anything." It turned out no one wanted to go, even the father-in-law who suggested the trip, but they al hopped in the car and went to Abilene anyway.7 Service firms tend to employ smart people, most of whom like to involve themselves and weigh in on important decisions, such as marketing strategy. Marketing committees form. When these lovely decision-making bodies get nice and big, two things happen.
First, innovative and interesting ideas get squashed before they can gain momentum. With anything new or visionary, it's difficult to get everyone to agree, and it's easy for people to say no and poke holes in ideas. The tired, less exciting ideas remain on the table.
It's kind of like getting 20 people to agree on the same dinner to eat. So many interesting possibilities get excluded for this reason or that.
Everyone ends up with macaroni and cheese and a wedge of iceberg lettuce posing as a salad.
Second, people begin to agree with watered-down and uninspiring ideas because they think other smart people agree with them so they must be okay, they're sick of the ongoing committee discussion, and actions eventual y need to be taken. They also know better ideas won't make it very far, so they publicly swal ow the pil and declare, "I agree. Let's go!" Privately they think, "This is a terrible idea, but I guess it's where everyone wants to go."
In other words, the committee decides to take the firm to Abilene and doesn't look back, sometimes until they've spent a year and a half on the trip.
What you're hoping for here, if you want your terrible marketing strategy to come out in ful force, is to encourage pluralistic ignorance, the phenomenon that occurs when several people in a group disagree with the norm of the group but don't say anything because they think everyone else agrees. Since no one says anything even when they disagree, even if everyone has second thoughts, the room stays silent and the trips to Abilene get spot numero uno on the priority list.
Even marketing strategies that could be good can become terrible marketing strategies if you set your mind to making them so. If you're wiling to do what you must to keep innovative ideas off the table, let other companies exploit opportunities in the market faster than you do, and structure your organization to stifle frank discussion, commitment, and execution, you'l be able to come up with the best terrible marketing strategies on the block.
The Seven Levers of Lead Generation and Marketing Planning.
Concentrate all your thoughts upon the work at hand. The sun's rays do not burn until brought to a focus.
-Alexander Graham Bell.
Over the past several years we've seen a s.h.i.+ft in thinking about how marketing dol ars are spent at professional services firms. No longer is the quarterly ad spend or the "we have done it every year" trade show getting automatic sign-off. The question asked more and more, and one you should ask about al of your spending on marketing and lead generation, is: "If I spend X on this marketing tactic, what should I expect in return?"
Unfortunately, too much of marketing spending-in both dolars and time-is stil wasted in professional services firms. In the same vein as "Who Was the Ad Wizard?" in Chapter 12, if you were to open up your local business journal, without a doubt you would see advertis.e.m.e.nts for professional services firms (some wel -designed, some not so much) aiming to TEN TACTICAL MISTAKES MADE BY PROFESSIONAL SERVICES FIRMS THAT GOOD PLANNING CAN SOLVE.
1. Spending on marketing activities that don't produce ROI or that are vanity exercises (e.g., over-the-top graphic design and image advertising).
2. Holding unrealistic expectations for which marketing tactics can produce which results.
3. Not implementing marketing because of inefficient decision making (committees).
4. Not sustaining implementation over the long term-giving up too soon.
5. Relying on one tactic to do the job.
6. Poor implementation (e.g., poorly written marketing copy, poorly designed web sites, or poorly targeted campaigns).
7. Dropping leads and failing to nurture leads.
8. Not communicating value in your marketing.
9. Not integrating the various marketing tactics.
10. Planning poorly for lead generation-al the steps in the process.
"generate awareness." While there is nothing wrong with using marketing to generate awareness or brand, these organizations are generating awareness among tens of thousands of readers who are not likely to be the best targets for their services. The funds to create such an ad and to run it week after week would surely be much better spent on reaching out to the smal er, more targeted pool of, say, 1,600 prospects the firm would actual y like as clients. For the most part, spending on ads like this is a waste, as are so many il -conceived marketing endeavors. Il -conceived advertising campaigns are, of course, just one example of waste that sneaks into marketing plans and campaigns. It's easy to waste a lot of money in web site development, direct marketing, thought leaders.h.i.+p development, business development, public relations, and virtual y any other tactic you can think of.
How does any company get rid of this kind of waste, whether it be in marketing or in other parts of the business?
The company focuses on it with keen eyes and manages its business as processes with inputs and outputs. Your marketing and lead generation efforts should be no different.
Make Outcomes a.s.sumptions You can plan the desired outputs of your efforts using calculations based on what you know about your firm's typical pipeline success. For an example, consider the "Metrics of Services in Demand" chart we use with Wel esley Hil s Group clients.
a.s.sume that: * Your targeting activities yield 2,000 prospective clients with whom you'd like to work.
* Over the course of a year, you implement a lead generation program (this means multiple outreach efforts and campaigns, not just a single effort) that yields 160 leads, or 8 percent of 2,000.
* Of those leads, 30 percent, or 48 prospects, are qualified (i.e., they're the right company and the right person, they have needs, they have the financial ability to buy, etc.).8 You close 30 percent of the qualified leads, yielding 14 new clients. Therefore, 9 percent of your initial leads close for this example.9 METRICS OF SERVICES IN DEMAND-EXAMPLE 1.
Average revenue per client per year: $150,000.
Retention of revenue from year to year: 60 percent.
Growth rate10 per retained client: 5 percent.
YOUR REVENUE RETENTION IS UNIQUE TO YOUR FIRM.
What should the revenue retention from current clients be for a professional services firm? That al depends on the nature and type of your service. You might think for an accounting firm that anything less than 90 percent retention would be bad; whereas for a firm that has a turnaround or workout practice, any client retention over zero percent would indicate trouble. As a law firm, you may retain a client from one year to the next, but revenue might be $100,000 one year when the client company buys another business, and $15,000 another year when al it needs is your review of a few contracts. While your industry may have averages or rules of thumb, your revenue retention target should be unique to your firm.
Given these a.s.sumptions, here's what your returns look like: REVENUE RETURN OVER TIME BASED ON EXAMPLE 1.
It doesn't matter if your budget is $60,000, $1.6 mil ion, $10.6 mil ion, or more. Spending on advertising and marketing with no clear expectations of adding leads to a pipeline (such as outlined earlier) is inefficient at best, and more often just crazy.
Stil, it happens. Spending gets a green light al the time because of the wrong reasons: * Your compet.i.tors have big spreads in the trade magazines and business journals: "We need to triple our advertising budget to keep up!"
* Your compet.i.tors got mentioned in the Wal Street Journal again: "We need a PR retainer fast!"
* You need more leads: "Let's hire a cold cal er . . . let's hire a big-gun business developer . . . let's buy search engine ads . . . let's sponsor the big conference and send everyone to network and bring home some bacon!"
* Your firm final y agrees you need to get serious about marketing: "Let's start with a new tagline, a new logo, new data sheets, and a new web site!"
What does al of this spending get you? Wel, it definitely gets you spending. And maybe you get other benefits, too, but probably not what you could be getting if you approach building a marketing, lead generation, and business development engine that wil work for you in the right way.
Playing with the a.s.sumptions Back to our example. Now you have an initial set of overal goals you expect to achieve though your marketing and business development activities.
What would happen, though, if you could make incremental improvements to your conversion rates?
Suppose, for example: * Your target-to-lead ratio moves from 8 percent to 10 percent.
* Your ratio of leads to qualified opportunities moves from 30 percent to 35 percent.
* Your ratio of qualified opportunities to client wins moves from 30 percent to 33 percent.
Your client revenue retention moves from 60 percent to 65 percent. Therefore, 12 percent of your initial leads close for this example.
Client Data Average revenue per client per year: $150,000.
Retention of revenue from year to year: 65 percent.
Growth rate per retained client: 5 percent.
METRICS OF SERVICES IN DEMAND-EXAMPLE 2 Here's what happens: * You win 23 clients instead of 14.
* Revenue in the first year is now just under $3.5 mil ion, or about $1.4 mil ion higher than in Example 1.
* The four-year revenue stream from one year of lead generation activities is now $8.5 mil ion, or $3.7 mil ion higher than before.
REVENUE RETURN OVER TIME BASED ON EXAMPLE 2.
Results have moved up quite a bit as a result of proactive choices you've made to improve how many leads you generate, how many of those leads become qualified opportunities, how often you close new business that's in your pipeline, and how wel you do getting those clients to come back for more year after year.
"The marketing department should help local offices understand and identify the importance of targeted marketing. Our offices are located in large metropolitan areas-the population is often in the millions. Yet, our target markets-our collective network of groups and individuals-may only be a few hundred individuals. What people think of as "public" visibility isn't necessarily what we need to achieve in professional services. Creating high visibility among our targets requires a different set of tactics."
-Kevin McMurdo, Chief Marketing Officer, Perkins Coie You also could have increased: * Your overal target pool, which, a.s.suming the targets are the same quality as the original set, would have yielded you more leads to move into the pipeline.
* The average size of your deals.
* The annual revenue growth rate per retained client.
Note as wel that if you typicaly get referrals from current clients, every new client you win increases your referral base. From the perspective of the model, this is something you should keep in mind as you factor in how many leads you plan to generate.
Only Seven Levers Matter Boil it down, and only seven levers matter to increase your revenue: 1. Number and/or quality of targets.
2. Number of overal leads.
3. Number of qualified leads.
4. Number of pipeline opportunities converted to clients.
5. Revenue per client.
6. Revenue retention.
7. Growth rate per client.
Everything you could possibly do in marketing should be viewed through the lens of these levers. You shouldn't pursue any tactic in marketing and business development that doesn't move one of these levers up, or keep one of these levers from fal ing.
Here are just a few paths you could pursue to move the levers in the right direction. Note that each successive point builds on previous points.
1. Increase the Number and/or Quality of Targets Preparation * Create a universal definition of what a good target client is for your company overal , for specific geographies, industries, or functional specialties within your firm (see Chapter 20 on targeting).
* Research the overal universe of good targets for your firm. (Are there 200 of them, 2,000 of them, 200,000? Who are they? Where are they?) Strategy * Launch new services to existing clients or existing services to new industries, geographies, or functional areas.
* Launch or package existing services for targets outside of your current target definition (i.e., package services for smal er or larger companies).
Database Population * Identify companies and people through available list-building sources, such as data compilers, a.s.sociations, and third-party list sources.
* Identify target companies one by one.
* Identify decision makers, influencers, and referral sources one by one.
* Increase house list with: * Stepping-stone service offers and stepping-stone marketing tactics.11 * Conversion of offers through direct outreach (mail, e-mail, telephone); semidirect outreach (speeches, seminars, teleseminars, trade shows); and broad outreach (search engine optimization, search engine advertising, traditional advertising, public relations, social media marketing).
Professional Services Marketing Part 3
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Professional Services Marketing Part 3 summary
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