How to grow your professional services firm – Part 1

 What do financial advisers, accountants and lawyers have in
common?

They all want to grow their business, yet have trouble
differentiating themselves from the competition. 
What can they do to change this picture?


In Positioned
To Win
, written for CA Magazine, co-authors Bob Angel and Hugh Johnston argue that old style marketing strategies
don’t work for professional services firms.

“The winners and losers in
this new competitive market will be those firms that truly practise branding
and positioning strategy […] especially around market share, market
segmentation and competitive differentiation tied to such factors as client
needs and service innovation.”
Yet there’s a definite “me-too” feeling about professional
services marketing, and it’s not hard to see why. Differentiating one firm from
another isn’t easy for a number of reasons. “It is hard for professional firms
to standardize the brand since they are mostly a collection of individual
brands [the individual practices] and are not really institutionalized,” says Bruce
McAlpine, president of Fulcrum Search Science Inc., an executive search and
human capital firm that supports professional services firms. “Most marketing
plans tend to look the same, they offer the same platitudes.”
Marketing is still
considered a black hole by those who matter most: CEOs. When the Fournaise
Marketing Group interviewed 1,200 chief executives, they discovered that a
whopping 80 per cent of CEOs Do Not
Trust Marketers
. “CEOs feel marketers are too distracted and sucked into
the technological flurry (and jargon) related to system integration, funnels,
processes and scores, and have forgotten that technology is only a support tool
that does not create demand per se – only accurate strategies and campaigns
pushing the right products, product benefits, content and customer value
propositions do.”
“Accurate strategies?” “Customer value propositions?” These
sound familiar. Maybe it’s time for marketers – especially marketers at
professional services firms – to get back to basics.
What do clients look
for when hiring a professional services firm?

A recent study may hold the answer. The following table,
courtesy of APQC[i],
shows the relative importance of 17 criteria that clients evaluate when
selecting management consulting firms:
Source: APQC (American Productivity and Quality Center) blog[ii]
Surprisingly, size doesn’t matter much to corporate clients –
it’s at the very bottom of the list. Neither does the firm’s location – it’s
next to last on the list. So what matters most?
Experience.

Experience – a combination of business and technical
expertise – occupies the top two spots and five of the top seven. Which brings
us to the marketing dilemma facing many professional services firms. If
expertise/ experience is the key differentiator, why would prospects choose one
firm and not another, given how similar their websites and their expertise? (This
assumes most firms are not big enough to be “brand names”.)
Freek Vermeulen, an Associate Professor of Strategy and
Entrepreneurship at the London Business School, may get us closer to the answer
thanks to a blog post
he wrote for the Harvard Business Review called You Can Win Without
Differentiation
. Vermeulen
believes that under conditions of uncertainty (which, for buyers of
professional services, is most of the time), “buyers rely on other signals to
decide whether to purchase, such as the seller’s status, its social network
ties, and prior relationships” and these signals should be as much part of your
strategizing as analyses of differentiation, value propositions, and customer
segments.

Interestingly, although he decries differentiation, I think most people
would say “status” and “prior relationships” are differentiators. But for me, the most crucial word is status. Virtually every business professional wants to achieve “expert status” within
their peer group and ultimately the business community at large. But expert status is
not easily achieved. It is realized through merit: hard work and persistence
over a prolonged period of time. But once achieved, expert status can be leveraged
through referrals and word of mouth to generate high quality leads. The trouble
is, these are very much one-on-one, and as such, they can only grow a practice
so far and so fast.



What can be done to plant the right seeds to accelerate
the growth of a practice, and do so in a professional way?


First, it’s helpful to remember that there are experts, and
then there are recognized experts. The
latter, through their exposure to the business community, have the ability to
move the needle very quickly. There are hundreds of thousands of PhDs but there
are far fewer “authorities” on a subject. Most experts toil in relative anonymity.
Recognized experts are known authorities on a given subject. Being acknowledged
as an authority in their chosen field can be a huge difference maker for the head of
a smaller or mid-sized firm, and even the largest firms can benefit.
So how can
professional services firms differentiate themselves? They need to start
taking advantage of their most underutilized marketing weapon: thought
leadership. A thought leader is an individual or firm that significantly profits
from being recognized as such, say Russ Alan Prince and Bruce Rogers in Forbes.

Part 2 of this post will examine:

  • why thought leadership is the great differentiator for professional services firms
  • why firms fail to take advantage of it
  • how they can make their knowledge more visible
  • how they can leverage this visibility generate growth 


[ii] APQC
is the American Productivity & Quality Center, a non-profit consulting
organization and one of the world’s leading proponents of business
benchmarking, best practices, and knowledge management research.

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