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News
Upcoming
Speeches:
Measuring
Marketing Effectiveness, Control System
Integrators Association conference, Sante Fe,
NM, April 27, 2007
Convert
Your Marketing Role into a Strategic Firm Leadership
Position, SMPS-PSMA Build Business 2007
National Conference, Washington DC, August 27,
2007
Articles
and Publications:
Suzanne
Lowe contributed to: Marketing
Metrics De-Mystified: Methods for Measuring ROI
and Evaluating Your Marketing Effort, by Sally
Handley FSMPS, President of Sally
Handley, Inc.. Sally is an adjunct faculty
member at Pratt Institute in Manhattan, where
she teaches Marketing /Communications for design
firms.
Practice
Management: Re-evaluate how you evaluate your
marketer (PDF), by Suzanne Lowe and Sally
Glick for Accounting Today, September
2006 (also published with permission on The
Marcus Letter)
Why
You May Not be Truly Differentiated, Consulting
News, September 2006 (available to CN subscribers
only)
Hallmarks
of an Effective CMO (PDF), The Marketer,
August 2006
New
from the Expertise Marketplace Blog
Lawyers
ahead of management consultants
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new to say?
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me the money
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all the posts at the Expertise Marketplace blog
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Recent
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or CEO-READ.
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The
Marketplace Master™ is a monthly email publication
on professional service marketing from Expertise Marketing,
LLC.
Pushing
back on a "push back"
For
most privately held professional service firms (PSFs),
leadership requires a delicate balancing act between
cajoling, building consensus, and weeding through the
inevitable sycophants to work with real team players.
This balancing act is especially tricky when one tries
to lead a group of highly intelligent, independent thinkers
to do something they perceive to be difficult: like
measuring marketing.
A
little more than a year ago, Larry
Bodine and I published our 2006 study "Increasing
Marketing Effectiveness at Professional Firms."
Our findings confirmed the nascent state of marketing
metrics in most professional service firms. As we catalogued
the respondents’ early successes, one thing was
clear: in PSFs, there is no small level of professional
passion being applied by individual leaders to make
cultural shifts toward being more results-oriented.
These
leaders' efforts have to be considerable, partly
because most professional practitioners are passionate
about serving their clients; their focus is appropriately
external. And the work required to measure marketing
and business development initiatives requires an internal,
sometimes very personal, focus. Again and again in our
study, respondents cited "pushback" from their
colleagues who questioned the ROI of measuring ROI.
In essence, their colleagues said, "Prove it to
me that undertaking all this measurement effort will
bring an obvious benefit to our firm. Otherwise, please
leave me alone."
This
month's Marketplace
Master™ issue features two service firm leaders
who exemplify significant professional bravery. Even
though the results from the effort weren't immediately
clear – and are still in process – they
urged colleagues to "do things differently"
toward an outcome that they believe will benefit the
entire firm and its clients.
Their
names are Carl
Roehling and Susan Arneson -- president and CEO,
and corporate marketing director, respectively -- for
architecture, engineering, interiors, and planning firm
SmithGroup.
Roehling and Arneson have led, for the last two years,
the most thoughtfully planned, well coordinated and
deeply integrated embrace of marketing measurement I
have seen for an enterprise of their size. As you read
their story, it will become clear why Roehling and Arneson
are succeeding in overcoming their own colleagues' measurement
"pushback."
Suzanne Lowe
Author, Marketplace Masters: How Professional Service
Firms Compete to Win
President, Expertise Marketing, LLC
No
More Spinning Wheels!
In
my experience, there are two reasons why organizations
pursue change: after encountering a significantly negative
crisis, or after being presented with a rational case
that makes it compellingly clear change must be
embraced, or else the organization will suffer a significantly
negative crisis.
Carl Roehling |
Susan Arneson |
Historically,
at SmithGroup,
as with many other professional service firms, practitioners
spent a large amount of time working under the amorphous
billing code called "Marketing." When pressed,
most professionals could explain their activities as
somehow related to bringing in new business, but it
was challenging at best to track results related to
their efforts. In response, Carl Roehling and Susan
Arneson have formulated a plan to build a better framework
for measuring marketplace effectiveness.
Roehling:
It was a common assumption among our partners
that if you spent time and money on marketing,
you would necessarily bring in more revenue.
However, there was no direct correlation between
marketing dollars spent and how effective we
were. It doesn't mean our partners weren't busy.
They were just not generating the kind of return
on investment that we had targeted.
" …if SmithGroup wants to be
strategically competitive, we will have
to get smarter about measurement."
- Carl Roehling, SmithGroup |
For
me, it's critically important to spend time
effectively. I've had strong feelings about
being results-oriented for a long time. I knew
I had to make the case that if SmithGroup wants
to be strategically competitive, we will have
to get smarter about measurement.
It
was like going through a battle. Starting about
two years ago, we got all our partners to agree
that marketing money is the most strategic resource
we have to spend. More than training, more than
information technology, marketing is the way
we will realize our vision and strategy for
the future. From there, it was a case of providing
our partners with meaningful and credible feedback
that would allow them to correlate their decisions
in marketing with their successes in strategic
planning.
Arneson:
Once we got consensus that becoming more effective
was a good business idea, I went out and researched
every metric that we have ever seen or heard
in our architecture / engineering industry.
Repeat work, work-under-contract, hit rate --
I found about 30 metrics in all, all of which
are tossed around in our industry indiscriminately,
and with significant inconsistency on the real
definition of each metric. We realized three
things: 1) we would need our partners’
agreement on a simple set of metrics –
and how we would define them -- across the firm;
2) we would need to incorporate our accounting
department so that our metrics had financial
credibility; and 3) we would need to streamline
our reporting practices, from the highly variable
information generated by each unit, toward a
consistent set of metrics and reports.
Roehling:
We also knew that we would have to employ metrics
that would point to clear actions, and that
would reinforce a change in behavior. Our people
need information that helps them filter out
the noise. We didn't want them dealing with
monthly hit rates, for instance; only hit rates
at the end of a year. We wanted our metrics
to help us see significant trends. With these
guidelines, we picked "Repeat Work"
as a key metric for SmithGroup.
Arneson:
We defined "Repeat Work"
in a way that made sense to our practitioners
and our accounting colleagues. For example,
we learned that if a client exhibits some type
of accounting activity within a 24-month period,
our accounting unit considers that to be an
existing client. If there is no accounting activity
within 24 months, they consider that to be an
inactive client and they archive the related
client records. Therefore, even if we’ve
worked in some way with a client in the past,
but not in the last two years, we view them
as a new client. The rationale is that with
client turnover, and the ins-and-outs of new
decision-makers, we are essentially investing
in developing a new client relationship (with
all its associated costs). By attaching our
definition of "Repeat Work" to an
accounting function, it gives us a basis for
real data. We decided that we would measure
this metric on a quarterly basis.
Roehling:
This metric did a few things for us.
First, by measuring Repeat Work, we are able
to give positive feedback to those individuals
who are not typically directly responsible for
marketing. For instance, our technical staff
also helps to take care of clients. We want
to be able to tell them they are doing a great
job. That's why it makes sense to look at how
much new business we’re winning from our
marketing investment and the volume of repeat
business generated from existing clients. Second,
while our goal is to disproportionately invest
in new business initiatives, we also want to
give principals evidence of why they should
consider allocating some of their marketing
budget to focus on current clients. This real
data helps them make those strategic decisions.
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Persisting
. . . One Step at a Time
As
Roehling and Arneson introduced their new measurement
concepts at the end of 2005, they were clear-eyed about
the magnitude of the mindset shift they sought from
their colleagues. They divided up their internal campaign:
Arneson worked to guide the marketing team, and, at
key meetings, Roehling briefed his partners, executive
committee members and the SmithGroup board members.
Both collaborated with corporate Accounting and the
Director of Operations for each of the firm’s
offices.
At
first, there was consternation. Questions abounded:
"You want me to do WHAT?" Roehling and Arneson
uncovered organizational barriers they never knew existed.
But, convinced that shifting to embrace measurement
would bring positive results, they persisted. They successfully
argued to make changes in the independent, parallel
tracking systems that had been used historically by
the firm’s different offices. Now there is a new
single system which consolidates all relevant measurement
data. Roehling reports: "We made the system support
the process."
Arneson
and Roehling are about to unveil their first whole year
of quarterly reports. The two admit that they have had
false starts, and are still experimenting with optimal
ways to measure and report results. Arneson says, "The
partners have been getting 11 x 17 spread sheets that
make their eyes glaze over. But with the increasing
amount of data that we already have coming in, we are
developing easy-to-read trend charts that will help
them quickly review and interpret information they're
getting."
Roehling
adds: "Ideally, the trend lines will help us move
beyond our previous approach to annual budgeting based
on what people did in the past. We'll wean ourselves
off activities that are not paying off, and start making
wiser, more informed wagers on new markets."
A
New Institutional Memory
I've
written in the past about how important it is for organizations
to act as one entity, with each individual doing his
or her part to move the enterprise toward a favorable
marketplace goal for all. The SmithGroup story is a
microcosm of how individuals begin the ripple effect
outward: from professional passion, to compelling
rationale, to forging common ground, to taking steps
collaboratively, and finally to fostering a new cultural
mindset and institutional memory of "the way we
do things here."
In
our conversations, Arneson and Roehling declared themselves
convinced that SmithGroup’s shift toward measurement
will bring positive results. They called their work
a long-term investment.
I
call it a legacy.
Your
feedback is important to us. Please contact
us with your comments and questions.
Want
to see the results from our study on marketing effectiveness?
More
information on the complete 80-page study and its accompanying
68-page case studies report.
Take
the confidential, web-based Marketplace Masters professional
service firm differentiation assessment test for
instant feedback on whether your firm is doing differentiation
right.
©
2007 Expertise
Marketing, LLC All Rights Reserved |
