Professional Services Marketing
The professional services industry encompasses a wide variety of businesses whose offer is based around specialist skill or knowledge. The one thing they have in common is that knowledge is the barrier to entry into their business.
Whilst using many mainstream marketing techniques, the nature of the organisations in the sector, particularly professional partnerships, and the services they provide has seen different approaches to marketing and marketing organisation develop. Laurie Young contends that “Some of the world’s most successful, enduring and profitable practices have, through experience, common sense and brilliance, evolved a number of common marketing approaches (even though they don’t call them that!)”
Professional services marketing is characterised by:
An approach to revenue generation which enhances the natural reputation of the business.
The two main drivers of revenue growth in this industry are the technical excellence of the work and the quality of client service. For a number of reasons clients talk about a professional service after it is finished. This creates a strong reputation (which may eventually turn into a brand) and this, in turn, draws in more work.
Strategies are developed in a manner appropriate to the style and culture of the firm.
The ownership of an organisation determines its approach to business. Partnerships, for instance, work through mutual ownership and consensus. They tend to use a “situational approach” to strategy development with actions agreed by consensus.
The systematic, procedural style used by many publicly owned companies is seen in the professions; both in those who have floated and some private firms. Single owner practices, on the other hand, tend to follow “Extant strategy”. The owner is so busy winning, delivering and running the business that direction is created in their head and rarely committed to paper.
These business dynamics make many of the recognised strategy tools difficult to apply. For example, the Boston Matrix’s two axes (revenue growth and market share) are not always success criteria in the professions. Very high market share may not be possible, in small markets, where conflict of interest is an issue.
Decisions about direction are based on insights into their market.
Professional service firms examine their markets by profiling client relationships and methods to stimulate more work from them. This might include cross-selling other services to contacts or deliberately encouraging referrals. Tools such as the “Boardex” database or the “activities, actors, resources” model can be used to create a relationship profile of the firm’s market.
They turn their competitive reputation into a brand.
Most services include a process through which users must surrender themselves to the service provider, and this yielding of control creates anxiety. In professional services the high value of the purchase, and the buyer’s lack of technical knowledge, increases this anxiety. As a result buyers reach around the proposition itself to seek emotional reassurance from the entity in charge (without being aware that they are doing so). As a result, the best-known service brands tend to be corporate brands. This has implications to many aspects of brand development and naming strategy.
There is also a symbiotic link between the brand of a professional service firm and the reputation of key practitioners. The brand of the firm and the reputation of key partners become inextricably linked. The firm’s brand consists of the experience that clients receive from the partners more than the design concept or value set. Partners must therefore feel that the brand represents them.
They use distinctive and relevant marketing communication techniques.
There are generally three levels of marketing in a professional service firm: (i) Contact marketing: activities at the client interface such as proposals, events, account management, business development and so on. (ii) Credibility marketing includes industry skills, technical skills (professionals often take their skills for granted and fail to tell the market about them), and thought leadership. (iii) Corporate level marketing encompasses: brand, go-to-market strategy and specific reputation initiatives like CSR.
Whilst some traditional marketing tools may be less applicable to professional services marketing, or may be prohibited by the restrictions of professional governing bodies, a number of successful marketing approaches which have been pioneered by this industry. Viral marketing has been used for many years as a marketing tool to increase word of mouth whilst “Thought leadership” - the publication and dissemination of ideas for commercial advantage - is often the source of NPD for the industry.
References
Laurie Young – Marketing the Professional Services Firm – Applying the principles and the Science of Marketing to the Professions (John Wiley & Sons 2005)