The Marketplace MasterTM is a monthly email publication on professional service marketing from Expertise Marketing, LLC. About This Issue Last month we discussed whether data mining is competitively smart or not worth the effort for professional service firms. Naturally, we feel that data mining is well worth the investment, but one has to understand that it takes focus, effort, and commitment. One of the payoffs with data mining is that it allows you to get closer to your clients. Read on for our explanation, and be sure to download the data mining case study. Suzanne Lowe Author, Marketplace Masters: How Professional Service Firms Compete to Win President, Expertise Marketing, LLC Get Closer to Clients with Data Mining Data mining is a natural fit for professional service firms because it taps into their knowledge – the critical source of their unique added value to clients. It can be deeply ingrained in their cultural style. And they can use it to learn how to exceed their clients’ expectations, and do so uniquely. One of the most compelling reasons to use data mining is to get closer to clients. By learning more about client preferences and habits, a firm can then align its strategic direction to capitalize on fruitful opportunities. Our research found many ways that professional service firms are using data mining to get closer to clients. Below, we examine the five methods that we found work for many firms:

Subscribe Did a colleague forward this newsletter? Sign up to receive your own copy: You can order Marketplace Masters from Barnes & Noble, Amazon, or your favorite online bookseller. News & Events Press Release: Interface Software Customer, Numerica Group, Featured in New Book on Professional Services Marketing Strategy The Working Manager book review of Marketplace Masters CMO Magazine article by Suzanne Lowe: The Five Pillars of Wisdom Management Consulting News interview with Suzanne Lowe. The Marcus Letter book review of Marketplace Masters Environmental Design & Construction article by Suzanne Lowe: Marketplace Misery, or Marketplace Master? The Marketer magazine article by Suzanne Lowe: Beauty is Only Skin-Deep, Does Your Firm Truly Embrace Differentiation? (see p. 13 of PDF file) BusinessWeek Online article by Suzanne Lowe: Professional-Services: Innovate from the Inside Recent Issues Data Mining – Competitively Smart, or Not Worth the Effort? (Oct 2004) Break out of the Pack (Sept. 2004) Top Ten Differentiation Approaches (August 2004)

1. Service Delivery – data mining can highlight a shift in the way a firm’s clients purchase its services. With this knowledge, a firm can become more flexible or offer customized services. For example, it might prompt a firm to start offering on- and off-site project and work teams to foster new perspectives between clients and consultants.
   
   
2. Innovation – by noticing a decline in profit margins for a particular service, a firm can focus on improving its pipeline in that area. It might, for example, pilot a new service with selected clients.
   
   
3. Client Relationship Management – the data may uncover relationship patterns between clients and members of the firm. For example, perhaps more clients are beginning to prefer a particular method of communication such as extranets or opt-in email newsletters. By identifying client preferences, a firm can use these technologies to get closer to them.
   
   
4. Competitive Practices – learning how clients interact with the competition can help a firm increase its effectiveness in final interviews (aka “beauty contests” or “shoot-outs”). In response, a firm may choose to offer free solutions or even collaborate with competitors in order to win engagements.
   
   
5. Market Research – the revelations from even the simplest data mining can spur a firm on to further market research, thereby augmenting its database with better information and creating the potential for even more fruitful data mining.

In addition to relevant information gleaned from the data, data mining can offer deeper internal rewards: the effective practice of data mining actually encourages professionals to think less about their own personal success and more about their organization’s overall success. The result can be a significant shift away from the individual “don’t-touch-my-client” silos that exist in many professional firms.

Often, professionals hide behind the excuse of “I’m serving my client; I don’t have time to enter data into a database!” Yes, the idea of taking time away from client work to give up your knowledge about that client can seem antithetical. Yet, by doing so and by analyzing previously unnoticed client patterns, a firm can formulate difficult-to-copy strategies that ultimately benefit the client – and the firm – in new and unanticipated ways.

Data Mining in Action

The most effective data mining occurs when technology systems are linked to each other, which allows for the simultaneous analysis of separately tracked but highly relevant relationship, financial and operational information.

Numerica Group plc, a U.K. based accounting and business consultancy, built its entire competitive strategy around this type of data mining. Numerica built links between its contacts management, practice management and financial accounting systems to create a deeply integrated process of information capture and management.

Numerica found that its data mining commitment helped it increase its effectiveness in winning new business opportunities, cross-sell services to targeted clients, and rapidly integrate new staff and allocate them appropriately to client projects. Results are increased profitability, streamlined sales and marketing processes, heightened service quality, and increased ROI on marketing and sales.

Read the complete Numerica case study (PDF file)

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