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MAY 09, 2008
MARKETING FIRMS - BRAND THYSELF
Marketing, advertising and PR firms all work to brand their clients. But how important is brand to these firms themselves? We sought to answer this question in the Wellesley Hills Group and RainToday.com's latest research report and found that brand does indeed make a difference for the firms whose very business it is to brand.

In the Fees and Pricing Benchmark Report: Marketing, Advertising, & PR Industry 2008 published in April 2008, 343 respondents described their company's reputation in its target market as either "very well-known" (brand leaders) or "not very well-known." Exactly one-quarter of the responding firms said they were "very well-known" and three-quarters indicated they were "not very well-known."

Here are four undeniable benefits the self-described "very well-known" companies enjoyed.

1. Brand leaders have increased their fees over the last two years.

Brand leaders were more likely to have increased their fees over the past two years: 79% of them have increased their fees, compared to 63% of less well-known firms.

2. Brand leaders have experienced annual revenue growth.

Along with an increase in fees, brand leaders were more likely to have seen their annual revenue grow in the past two years, while the lesser-known firms were more likely to have seen their revenue levels stay the same:

  • 79% of brand leaders "grew" versus 65% of lesser-known firms
  • 23% of lesser-known firms "stayed the same" versus 12% of brand leaders

3. Brand leaders receive higher fees by up to 33%.

Brand leaders not only priced their services higher than their lesser-known counterparts, (41% of brand leaders are premium-price firms vs. 24% of lesser-known firms), but they also got higher fees for their services.

The percent increase that brand leaders actually realized versus non-brand leaders by level of professional is as follows:

  • Highest-level professionals: 33% higher
  • Upper-level professionals: 13% higher
  • Advanced-level professionals: 4% higher
  • Mid-level professionals: 20% higher
  • Entry-level professionals: 27% higher

4. Brand leaders are more profitable.

Brand leaders were more likely to have been profitable in the past year: 69% of brand leaders were profitable versus 56% of lesser-known firms.

Making the Financial Case for Branding

Arguments about brand are common. Brand advocates tout the need for, and the value of, brand. Skeptics decry the value of branding, with calls of "show me the data," "prove the case," and the occasional "branding is fluff and puffery and doesn't do anything."

Lest there be any further argument about the value of brand, our research shows that firms that are well-known in their target markets receive higher fees, see their revenue grow, and earn higher profits than lesser-known firms.

This is not to say that lesser-known firms can't generate premium fees, grow, and profit. They can and do. But it seems the brand leaders have a better chance of doing so and have an easier time of it.

APRIL 16, 2008
CONSULTING FIRM PRICING CHALLENGES FOCUS ON VALUE

In the recently released Wellesley Hills Group and RainToday.com research Fees and Pricing Benchmark Report: Consulting Industry, 2008we researched the top challenges facing consulting firms regarding setting their fees and pricing their services. The top challenges consulting firms face when it comes to pricing are:

  • Uncertainty about what price a particular client will accept
  • Pressure not to leave money on the table
  • Pressure to compete on price from prospects / clients

Each of these challenges fall under the general category of client value, whereas the next seven challenges mentioned were internal – focused on the firm itself. 

Should a firm be able to increase its perceived and real value to clients, then:

  • Clients will likely be willing to accept higher fees (though, granted, with each client you may never know the exact fees they will actually be willing to accept).

  • The firm will be less concerned with leaving money on the table because it will be more confident in the fees it is charging.

  • Clients will pressure the firm's prices less because they will have confidence in that firm’s ability to deliver additional value.

 

MARCH 26, 2008
DO WELL BRANDED FIRMS REALIZE HIGHER FEES?
The recently released Wellesley Hills Group and RainToday.com research Fees and Pricing Benchmark Report: Consulting Industry, 2008focused on the consulting industry, will be the first of five industry reports to launch. The other industries of focus are:

  • Marketing, Advertising, and PR
  • Architecture and Engineering
  • Legal Services
  • Accounting and Financial Services

Over the course of the coming weeks, I'll be posting various pieces of data and commentary from the research here on the Services Insider Blog.

Regarding pricing, we wanted to know what brand leader firms do differently than the rest of the pack. Do they have different challenges? Use different pricing strategies? Do brand leaders grow faster? Are they more profitable? Have higher fees? Do they consider different factors when pricing?  

While both brand leaders and less well-known firms have similar standard rates, the median actual rates realized by the brand leader firms were always higher than the not-very-well-known firms – by up to 35% for entry level professionals.

Hourly Billable Rates
Brand Leaders vs. Less-Well-Known Firms

% Increase in Fees Realized by Level of Professional

The next time someone says that brand doesn't make a business and financial difference, show them the data.

MARCH 11, 2008
TAKING ADVANTAGE OF MARKETING AND WEB TECHNOLOGIES
This week's BtoB Magazine, The Magazine for Marketing Strategists, features a story on 5 trends worth watching regarding marketing technology. The "big five Web/tech trends worth watching" include:

  • Widgets
  • Social Feeds
  • Data Portability
  • Mashups
  • Open Mobile

So how much should most professional services marketers pay attention to these trends? For most firms, not much.

I can think of examples of how you might use them, but for the majority of services firms the opportunity is to take advantage of Web/tech trends...from years past. Here are four areas regarding marketing technologies and Internet marketing I'd like to see services firms employ before they start using Data Portability and Open Mobile...

Basics: In 2004 and 2005, we published two articles Services Marketing is Moving Online - Are You? and Five Effects of a Website on a Service Business Brand. These articles cover basics such as how professional services buyers are influenced by websites, how what you put on your website and how up-to-date you keep it affects both lead generation and brand, how websites affect referral patterns, and how websites affect the results of all your online and offline marketing activities.

These articles also cover common web marketing pitfalls firms should avoid. I've been pleased to see a number of firms over the past several years get better on the basics, but there's still a lot more work to do, and a lot of firms haven't yet caught on.

Value: Service firm leaders are proud of the value they add to their clients' businesses and typically aren't shy to talk about it. What they should do more of is demonstrate the value. It takes little technology effort to produce articles, podcasts, blogs, white papers, research, webinars, etc. on your website. The hard work lies in committing dollars and people to the regular production of  high quality content. Should you commit here, well established web and email technologies can be your best friends in disseminating the value.

SEO and Online PR: If a tree falls in the woods and no one is there to hear it, did it really make a sound? If your website is live on the web, and nobody sees it, does it really make a difference?

Search Engine Optimization (SEO) is the process by which you get found in the natural search results in Google and other search engines. A major misconception in SEO is that you need to simply put the right keywords on your site, build in the right "metatags", and submit the site to search engines to be indexed. If you think this will work, you're right! Assuming it's still 1996. Today, not only is this not enough, much of it isn't even that helpful anymore. 

Big picture, the three keys to SEO are having the strongest 1) Keywording, 2) Site Technology, and 3) Site Popularity, that you possibly can. With help from a good search engine marketing consultant, you can get your site keyworded fairly easily and get your website on the right technology so it's spiderable by Google. Once you're there, you're
just getting started.

Now you must get other reputable sites to put links on their site and point them to yours! To do that, you've got to have a compelling reason for them to do so, and you've got to work hard to get them to do it. One compelling reason to get other sites to link to you is valuable content (see previous point). Just having the content won't get them to link to you, but if you have it and do the work of Online PR, you can get them to link to it. Your online PR success will drive traffic and improve your site popularity...so critical to get Google to give you good search rankings.

Segmentation, Targeting, and Communication: Here's what we know: the more specific and customized you can get with communications for individual buyers, targeting their areas of interest, specific need sets, geographies, industries, or any other segmentable areas, the more you can interest them in engaging (or re-engaging) your firm for services. CRM technology available today (and last year, and two years ago) can allow us to get this done and get it done well.

There are lots more technologies out there that you can take advantage of. Have a look at www.vtrenz.com, www.eloqua.com, www.exacttarget.com, www.plurapage.com, and www.nimblefish.com. It would be easy to fill a page with more...all different types of technologies and web applications to help you market and grow your firm.

All you need to do to take advantage of them is understand what you want to do from a strategy perspective, understand the landscape of technologies available to help you put your strategy into action, and then get it done.

 

FEBRUARY 20, 2008
WORKOPOLIS TV INTERVIEW ON COLD CALLING

The media likes cold calling. I got a call from Bruce Sellery of Workopolis TV a few months back and he asked me to give an interview on cold calling for his show. It aired last week on BNN, the Canadian equivalent to MSNBC, with approximately 4.2 million viewers per week.

The interview was conducted at the NASDAQ in New York City. This sounds glamorous, but like all TV interviews, I was stuffed in a tiny room, given an earpiece, and Bruce jumped into my head and asked me questions. I answered them to a camera, and that was that.

Enjoy the interview!

FEBRUARY 05, 2008
THE DIFFERENTIATION MYTH
Last Wednesday the first part of my article The Differentiation Myth ran in RainToday.com. Although only the first half of the article was published so far, it received quite a number of responses (even one guilt/shame trip!)

Here are a few of them (responses, not guilt trips):

While I found your article “The Myth of Differentiation” entertaining and somewhat interesting, you unfortunately fell flat in the valiant attempt to prove your point. While you hooked your eager readers like me in the opening paragraph, there simply was not enough substance that followed to solidly prove your underlying premise. 

Where’s the beef? The companies you cited as examples of poor differentiation strategy clearly deserved criticizing. They were indeed off the mark by a mile. But those weak examples alone did not “destroy the myth.”    

Honest differentiation is a powerful marketing tool when properly applied. I’ve used it in my business and have done extremely well financially. It can, and often does, set a service or product apart, giving it an edge in the “positioning of the mind” (Troutt and Reiss). 

Many of us out here love reading your anti-traditional thinking, but back it up with concrete evidence that truly sways opinion.

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Thank you for a clear, common-sense rebuttal to the over-used, over-simplistic differentiation planning framework. The issue that I have with this approach is that differentiation becomes the goal. Being or sounding different for the sake of contrast carries the risk of choosing an ineffective path. Taking the thought to the next level, differentiation isn’t a valid strategy. If competitors are failing to meet market needs, then the strategy is to align products and services to better meet needs. The strategy isn’t to be different, it’s to address voids. 

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Mr. Schultz' blog on the Myth of Differentiation was thought provoking, possibly because I just spent two hours yesterday at a networking event. I often ask prospective clients and agencies how they differentiate, and typically I get similar answers, stated in different ways. After reading this article, I reflected on my ‘elevator pitch’ and quickly realized I can also be placed in the category of uniquely stated sameness.

I do however believe that organizations can and do differentiate, however that differentiation is often based on actual client experiences, not on product or services. It is difficult to articulate in a short elevator pitch, however these experiences can be brought out through examples i.e. “clients tell us they were surprised and delighted by our….” Time for me to rethink my own elevator pitch and website copy and focus more on actual client experiences then interesting and ‘unique’ ways to state what everyone else is already doing. 

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The "need" for differentiation grew so strong because companies thought that customers needed a way to to see them differently from their competitors. For some companies this worked but there are only so many USP's. Eventually all the points that companies used to differentiate themselves actually made them all look the same. Perhaps they should just have asked customers what they wanted in the first place. 

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Your article on differentiation is misleading for small businesses looking for guidance. Being unique, which we all are - and articulating it are two different things. The low quality promotional copy used in your article to illustrate your point is most often written in-house or by hacks. Generalizing from there is...misleading to your readers, particularly when nothing is being offered as an alternate or better way to go. Shame on you!

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In the first part of his two-part “Myth of Differentiation” series, Mr. Schultz muddles the meanings of the words “unique” and “different” and narrowly defines differentiation as a communications process (“differentiating to the client”), ignoring the value of differentiation as a process of introspection—figuring out what makes you different from the competition so that you can better position yourself to your market or client.

First of all, the words “unique” and “different,” while synonyms, do not have identical meanings. In order to be “unique,” something must be different from every other thing in existence. Answering the question, “why are you unique?” is nearly impossible, because the comparison set is so huge—the entire universe. So I think that the word is usually used poorly in marketing, to describe a firm that isn’t really unique (or, at least, probably couldn’t tell you how it’s unique).

But the word “different” sets the bar lower, on a scale we can deal with. Something is different only in terms of how it compares with other things in the same limited category. In thinking of what makes a firm different, we consider the direct competition, and think about what makes us special.

This is an absolutely necessary part of positioning your firm for a market or a specific client. Otherwise, you’re just talking about yourself, without a competitive context, and you have no way of anticipating how effective your words will be in reaching your client. Once you know how you’re different, you don’t necessarily need to say to the client “We’re different because…” but your understanding of how you’re different can inform ALL of your communications.

I agree with Mr. Schultz that calling yourself "different" or "unique" does not make you either one, but I do believe that an introspective process (informed by research, of course) about how you compare to your competition is invaluable in developing client-focused messages that differentiate your firm from the competition. The real problem isn’t with the words, it’s with using them incorrectly to describe things that aren’t actually different or unique. 

JANUARY 22, 2008
MARKETING AND SELLING MAKE NICE
Marketing and selling should work together. I don't think you'll find too many people who would disagree. Still, marketing and selling departments at companies far too infrequently play nice with each other. The Yankee Group studied the handoff of leads between marketing and sales and found that 40% to 80% of leads were dropped or lost.* See their "Causes of Lost Leads" graphic below.

They also found that an 11% reduction in dropped or lost leads, combined with a 1% improvement in lead-to-client conversion rate, increased annual gross profit by 136%. At first glance this seems unrealistic. It's not. Read this article and see why.

So what's going on at your firm? Do marketing and sales work together? Could you be more effective at collaborating between departments and teams? How do you stack up with other professional services firms?

Suzanne Lowe, esteemed industry colleague and leading thinker on professional services marketing, is conducting a survey on the topic. Take the survey here: 

http://www.surveymonkey.com/s.aspx?sm=2x080TxYwXC2Tx0DS5NX4A_3d_3d

She'll feature the results in her upcoming book The Integration Imperative™: Erasing Marketing and Business Development Silos - Once and For All - in Professional Service Firms and share the results with survey participants.

* Increase Revenue by Optimizing Lead Management, Sheryl Kingstone, The Yankee Group, August 2002

 

JANUARY 18, 2008
TO DISCOUNT OR NOT TO DISCOUNT YOUR SERVICE FEES
You never see this one on a consulting or professional services firm website:

"We offer excellent services and deliver superior value, but our prices are negotiable. What you'll pay really depends on whether we're hurtin' for business this month, whether you're a marquee client we want to have on our roster, and whether or not you pressure us."

Yet, that's what's happening. Just a day out of the gate, the first several hundred survey responses are in for the Wellesley Hills Group and RainToday.com Pricing and Fees in Professional Service Businesses benchmark research study. With an initial but already significant percent of precincts reporting (love that presidential primary season):

  • 61.4% of professional services firms report that they discount their fees from their internally standard or externally published rate or fee structure.

  • 38.6% report they do not ever discount

What drives companies to discount? Which firms tend to discount and which don't? What are the greatest factors that affect a firm's ability to raise (and get!) the highest fees? More to come as we continue to collect and analyze the data...

Take the survey - open through the end of January:  http://www.surveymonkey.com/s.aspx?sm=uJMDeOD9q69m3HT6VG3RIQ_3d_3d and you can get a complimentary copy of one of the following:

  • The Professional Services E-Guide To Online PR
  • How To Write And Market A White Paper E-Guide
  • How To Become A Thought Leader E-Guide
  • How To Set Appointments Through Cold Calling E-Guide
  • Marketing Strategy, Planning, and Budgeting for Professional Services (Webinar Recording)

JANUARY 17, 2008
INSIDE SALES WITH OUTSIDE SALES
A recent webinar attendee asked the following question: We just started an inside sales position within the last year. Do you have any recommendations on how to best utilize that position with our outside sales reps?

Keep the following in mind: 

  • Make sure they conduct themselves with strong ethics. No tricks. And if you see tricks, don't look the other way; let the person go.

  • Do whatever you can to help them get good lists and targets.

  • Use direct mail and email to supplement calling activities.

  • Make sure they call with some offer of value. (And make sure there is value in that value proposition.)

  • Be very clear on what you need. Inside sales folks can have one background and skill set and make $10 an hour, and another will have a very different skill set and background and make $100k. If you know what you need, you can find someone who fits the bill.

  • Make sure expectations are clear for what they're supposed to do, measure activity and output regularly, and coach the team to do as well as they can with the calls themselves.

  • Have frequent communication between the inside and outside teams so they know what the other is doing.

  • Don't drop leads. (Seems like a simple comment, but it happens all the time.)

  • Once the outside business developer has the initial meeting or contact, make sure you know what the lead nurturing process is going to be if there isn't an immediate need or sale. 

  • Realize that if your inside sales group is one person or small, any staffing changes will drastically alter your ability to produce.

  • Don't be surprised if someone does really well and leaves, or if someone doesn't do well and you have to figure out what to do with them. Finding someone who's "just right" for your firm, pay level, culture, etc. is harder than most firms think it's going to be with inside sales.

Good luck...

JANUARY 09, 2008
WHAT BRANDS DO FOR BUSINESS
Walk around any marketing conference and you can hear folks talking about brand. Typically much of the discussion centers around brand tactics: how to create a brand identity, how to build brand messages, how to test for brand penetration, how to implement a brand, etc. The question I often get from company leaders is more along the lines of, "What should a brand actually do for a professional services firm?" In other words, “Why bother?” In my estimation:

Brands increase sales effectiveness: If a potential buyer says, “I know your company… you have a reputation for doing a great job and treating clients well,” you’ll be in much better shape than if they say, “Now who are you again and why are you here?” Also, we all know that large buying decisions have multiple people influencing the purchase from the buyer side. When your prospect asks around and hears, “Yes, I’ve been following their research for years. They’re a leader in the space,” or “I’ve worked with them before…they’re as solid as they come,” it’ll be much better for you than if they hear a chorus of “Nope…never heard of them,” or worse.

Brands help generate leads: If a prospect knows and respects your company and reputation, they’ll be more likely to accept when they get an invitation to an event, an invitation to download a new white paper, or a telephone call to see if they’d like to have lunch and discuss business. If they’ve never heard of you, the messages can often go unnoticed and untouched. (Until the messages build up enough over time and they’ve seen them for a while, but then you’re starting to establish a brand…) Research supports this argument.

Brands create premium fees and pricing: It may be basic, but buyers are looking for services firms to do what they say they’re going to do. If your brand and reputation a) creates a promise for what the buyer can expect from you, and b) supports the belief that you deliver on your promises, you’ll garner higher fees.

Brands help you beat competition: If a buyer knows he’s going to get top quality, high output, reduced risk, leaders and thinkers, or whatever your brand is they often value that over the lowest price. Without distinct criteria for them to evaluate what you will do versus someone else, or knowledge that what you say is, indeed, what they’ll experience from you, price often becomes a central factor.

Brands facilitate repeat business: When buyers know what to expect from interactions with you, that you keep your promises, and that you deliver at and above their expectations, they’re less likely to switch or stop buying. Boil it down, and a brand is simply the degree to which a buyer prefers to purchase from you versus other options available to them.                                                                                                  

Brands draw strong labor pools: In good economies and bad, services firms need to hire the best people they can possibly find. Brands are often a force in attracting the best job candidates and getting them to accept positions at your company versus the others.

Brands increase the value of a company: As discussed throughout, brands help create premium fees, new business leads, strong sales, strong labor pools, and other benefits. These are long-term financial advantages. These advantages translate into higher market value and company valuation, especially because of how long it takes to establish a brand from scratch. This point may only be interesting to the owners of a business, but, then again, they often hold the purse strings and keys to success for brand and marketing initiatives.