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Are your firms marketing efforts producing the results you want? The only way to find out is to measure the results of your firms marketing initiatives. A recent study challenges many professional services firms to establish measurements that truly assess the effectiveness of their programs.
In recent years, CPA firms have increasingly taken a structured
approach to marketing their services. Many firms have increased
their client base and revenues by tapping resources inside and
outside the firm to expand their marketing efforts. Even so, many
CPA firms and other professional services firms need to do more
to improve their marketplace effectiveness to bring in more revenues.
This is a conclusion of a study, “Increasing Marketing Effectiveness
at Professional Firms,” recently published by Concord, Massachusetts-based
Expertise Marketing LLC and Glen Ellyn, Illinois-based Larry Bodine
Marketing. Suzanne Lowe, president of Expertise Marketing and
a professional services consultant, has over the years conducted
several studies of professional services firms. The focus of each
study was based on an advisory group's request that certain issues
be studied with the aim of helping firms market more effectively.
With this 2006 study, once again, Ms. Lowe and research partner
Larry Bodine spotlight specific steps that will strengthen firms'
efforts. The report focuses on the relationship between measurement
and marketplace success. Firms need to ensure that their marketing
and practice development efforts have been as effective as possible.
To do so, they need to establish measurements that will tell them
how well or poorly their marketing strategies are working.
To help professional services firms enhance their structure
for improving marketing effectiveness, the report offers, along
with commentary, “specific data about the highest ranked
marketing and business development practices, the most effective
measurement metrics, how firms monitor their effectiveness, how
they perceive they're doing in measuring their marketing and business
development initiatives, and how they overcome obstacles to measuring
and improving their marketplace effectiveness.” The survey
respondents included 127 marketing directors and 91 managing partners
and CEOs. In addition to 72 CPA firm participants, the respondents
represented law and engineering consulting firms.
The study results suggest that professional services firms are
more than willing to extend their resources needed to achieve
marketplace effectiveness. The results also suggest that a lack
of marketing metrics hampers these firms in doing so. Among the
study's findings is that, although firms may be willing to spend
money on marketing, they have spent “a paltry sum on measuring
marketing” less than one-tenth of a percent “of an
aggregate $94 billion in gross.” In a telephone interview,
Ms. Lowe suggested that firms need to demonstrate their commitment
to achieving marketplace effectiveness by formally budgeting funds
for measuring this effectiveness.
“Most firms talk a good game about being better than their
competitors,” Ms. Lowe said. “They may claim that
they can exceed their competitors, but it's mostly hot air if
they don't have a distinct process of measurement. The attitude
of clients and prospective clients is —if you can't prove
to me that you're superior, don't tell me you are. “Because
proof is important to win clients, firms need to have an evaluation
process in place. For example, they could demonstrate the results
of their emphasis on professional qualifications and development
to assure clients of receiving superior services.”
Self-delusion?
“ Extremely effective” was the self-reported choice
that 20% of respondents made about their effectiveness against
rivals. But the report's findings challenge professional services
firms not to delude themselves that they are extremely effective
against competitors just because they have some form of measurement
program in place. In fact, some measurement programs have no teeth
in them. The study found a statistical correlation between the
level of self-reported competitive effectiveness and the use of
what the study authors called “Client-Metrics”-- measures
that are “obvious, tangible, objective, and identified with
clients.”
Along this line, the report concludes that —Benchmarking
is not well-understood and is sparingly applied in professional
services marketing. Benchmarking means setting a “highest
achievable level of measurement” and evaluating the firm's
progress toward attaining it. The report contrasts benchmarking
standards that are specific measurements and, therefore, would
provide a meaningful assessment of progress with vague standards
that lack tangible and objective measurements.
The contrast is demonstrated in the following list of measurements used by survey respondents:
Examples of good benchmarking measurements
- Average 9 proposals submitted per partner per year. Win 40% of all proposals. (Win 60% of those where we have a formal presentation of or meeting about the proposal.)
- We try to use the leader in our sector and our region in terms of market share as our benchmark. We try to replicate and perfect their strategies.
- Fifty percent increase in traffic from 2004.
- Want to win more than 30% of bids (industry average).
- 5% overall growth, with 25% margin at the manager level
Examples of bad benchmarking measurements
- Success in building a national brand will be our goal.
- We have no idea other than we hope the fees won are a multiple of the cost of the campaign.
- Maintain or improve turnover [revenue] rates from year to year.
- Higher revenues.
- Increase number of speaking engagements every year.
The full report discusses the importance of measuring marketplace effectiveness and how to measure real progress in the marketplace. To obtain the 80-page report, along with a 68-page case study, go to www.expertisemarketing.com/marketing_study_results.html.
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