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About the Book
How to Order
Excerpt
Eleven Competencies for
Professional Service Firm Marketplace Mastery
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Overview Excerpt from Marketplace
Masters:
How Professional Service Firms Compete to Win
Are you interested in an excerpt for your publication? Please contact
Andrea Harris at 978-897-1616 or andrea@expertisemarketing.com.
Mastering the Professional Service Firm Marketplace
By Suzanne Lowe, Author, Marketplace Masters
Today’s professional service firms’ marketing efforts have
become inverted. Rather than being proactive marketers, most compete by
“trying not to fail” rather than by trying to win. They rush
to enter what seem to be lucrative new arenas. They sell what their competitor
sells: their array is at least as wide, their palate as interesting. Professional
service firms as a group – ranging from accountants, to consultants,
lawyers, architects, engineers, construction managers, and virtually every
business-to-business service provider—too rarely allot the time
and resources to gain an understanding of the entire marketplace context
in which they compete.
They shy away from truly organic “work” – that involves
out-of-the-box soul-searching, learning more about their clients than
they already know, operationally stretching to attain new competitive
advantages, measuring the results of their strategic initiatives (and
making the required adjustments) or actively aligning their go-to-market
strategies with their culture. By doing this, they avoid real innovation,
sticking instead to the seemingly safer path of innovation through acquisition,
or to step-improvements on existing products and services.
Marketplace Masters, based on a five-year study involving thousands of
firms, teaches readers how to effectively study, measure and learn from
their marketplaces, and to truly compete to win.
Putting the short-term first has served many firms well in the past.
We’ve seen some stellar success stories. But we’ve also seen
more than a few debacles: Arthur D. Little, The Washington Group, firms
in the executive search sector, Arthur Andersen, and the high profile
dissolutions of two law firms on opposite coasts of the United States.
Each of the firms above reached a decision-point and went ahead without
the benefit of an infrastructure that fostered a real understanding of
its marketplace, guided it to make strategically effective internal efforts
to compete, and served as a framework for systemic innovation. Each moved
forward without the benefit of constant self-assessment and market-assessment
built into its modus operandi. Each underperformed its marketplace potential.
The Causes
One of the root causes of marketplace misfortunes is that professional
service firms, by and large, have difficulty understanding (and adapting
to) the changing roles of their clients. “Customers,” in the
professional service sector, are not merely consumers. They are also competitors
of a sort. Clients’ knowledge of the service, and their needs regarding
the service, literally change as they “consume” the service
they’re purchasing. Those changes can be significant.
Another root cause is the historical reluctance to engage in “competition.”
In many professional service firms, asking the question “how will
we compete” borders on the heretical.
The final cause is under-differentiation. Firms ask themselves, “Why
are we losing proposals to competitors?” The answer: to many competitors
selling the same thing the same way for the same price. Attributes like
customization, responsiveness, and accuracy have become “givens.”
Many firms have, without realizing it, taken the “mile-wide, inch-deep”
approach to understanding themselves vis à vis their market. Reading
too much into some information and not enough into the rest, firms find
themselves trying to make decisions on range of services, competitive
distinctions and innovation without doing the deeper work it takes to
achieve truly robust differentiation.
Professional service firms can move beyond their understandable marketplace
nearsightedness. They can enact more deeply strategic initiatives to influence
their business arena and their own competitive trajectory within it. They
can move beyond their all-too-random acts of marketing to deliberately
work on mastering their marketplace.
The Three Building Blocks
Over the course of a five-year study, a distinct picture has emerged
pointing to 11 competencies that respondents were using to garner positive
marketplace results. These 11 competencies fell into three groups: Looking
Out, Digging Deeper and Embedding Innovation. Together, they form a compelling
market-driven infrastructure for professional service firms to compete
more effectively, as Marketplace Masters.
Looking Out
Essentially, Looking Out means using research on clients, competitors,
and markets to look outside of professional or internal organizational
confines to detect market shifts and opportunities. Put another way, Looking
Out is the ability to pull up out of the day-to-day operating challenges
and take a hard look at what’s coming down the pike. Looking Out
competencies are: 1) studying clients using outside qualitative and quantitative
research; 2) researching the market using economic forecasts and trend
analyses; and 3) researching competitors by gathering competitive intelligence.
Digging Deeper
The professional service sector, whose very foundation is based on intellectual
capital, has yet to apply its collective brainpower to truly dig into
its marketplace. Digging Deeper means doing the targeted organizational
and analytical work it takes to compete more effectively. Despite the
availability (and increasing affordability) of powerful software applications,
few firms conduct formal data mining to discover the unmet needs of clients
and prospects. Digging Deeper means capturing, organizing and mining valuable
client data to the point that one can discern past and potential client
and marketplace patterns. The five competencies within Digging Deeper
include: 1) embracing competitive differentiation; 2) mining client data;
3) using account planning and relationship management programs; 4) aligning
marketing strategies with culture; and 5) using measurement to increase
strategic focus and competitive advantage.
Embedding Innovation
As a whole, the professional service sector relies too heavily on technology-based
“knowledge management” and promotion-based “thought
leadership” as platforms on which to develop new services. Our findings
uncovered little evidence of, support for, or implementation of, other
formal innovation initiatives. Innovation must be institutionalized as
a critical element in every professional firm’s strategy. First,
building an R&D framework, which means recognizing those services
that are rapidly becoming commodities, and then programmatically steering
internal efforts to build new services. A second competency is how firms
use technology not to enable a new service to be delivered but as a basis
for a new service itself. A third competency is how firms use incentives
or rewards to stimulate professionals to innovate in alignment with the
firm’s strategy.
Small Changes, Great Gains
None of these 11 practices are new. None are particularly hard to do.
So what is the “disconnect?” The answer is twofold: first,
most maturing professional firms have long since established a pace that
is linked to whatever opportunities or challenges the market is currently
serving up. In their founding days, they never created an explicit market-driven
infrastructure. What’s more, they’re not at all sure that
it will help their situation; investing the time and resources necessary
seems too dangerous. Second, any new change effort – be it an organizational
or cultural overhaul, or a simple improvement in research practices –
can seem daunting. Firms fear the paralysis that comes from biting off
more than they can chew.
Despite these concerns, all professional service firms can learn to look
out, dig deeper, and embed innovation – without too much pain. What’s
more, if they tackle and succeed at only one of the three, the other two
will follow more naturally. Taking baby steps -- albeit deliberate ones
-- will create significant gains that are felt firm-wide, and on a large
scale, over the long term. It all begins with the intention to become
a Marketplace Master, and with making the commitment to building a marketing
infrastructure.
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