Marketing Professional Service Firms

Presented by : Robert Sawhney: Managing Director, SRC Associates

Ltd

Venue: Auditorium, Hong Kong Institute of CPAs

Date: 3rd March 2010

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Disclaimer

The materials of this seminar / workshop / conference are intended

to provide general information and guidance on the subject

concerned. Examples and other materials in this seminar / workshop

/ conference are only for illustrative purposes and should not be

relied upon for technical answers. The Hong Kong Institute of

Certified Public Accountants (The Institute), the speaker(s) and the

firm(s) that the speaker(s) is representing take no responsibility for

any errors or omissions in, or for the loss incurred by individuals or

companies due to the use of, the materials of this seminar /

workshop / conference.

No claims, action or legal proceedings in connection with this

seminar/workshop/conference brought by any individuals or

companies having reference to the materials on this seminar /

workshop / conference will be entertained by the Institute, the

speaker(s) and the firm(s) that the speaker(s) is representing.

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The State of Play

GFC

Demanding clients

Regulation

Competition

Globalisation

Consolidation

Social media and Web 2.0

Talent retention and management

According to Ron Baker

The Firm of the Future

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How PSFs are Different!

Product resides in the structural, social, and intellectual

capital of firm – knowledge and learning key

Key marketer is the professional who interacts with client

Differentiation is harder to achieve – ‘we do better audits’

Branding at the individual, practice group, and firm level

Marketing and BD coupled together – misunderstanding?

Professionals don’t take easily to being ‘managed’, strategy

bottom up and involves all or no one (are they interested)?

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And the difficulty of…

Fundamental misunderstanding by professionals of what

marketing is

Growth of 10% per annum, who needs it?

Strong resistance by seniors

Belief in conflict with professional ethics and association

guidelines

Combined role of producer/manager

Short term orientation and lack of longer term strategic

thinking

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Marketing and client value

Firstly – what marketing is not:

Promotion

Clever logo and new brand name

Run by the marketing/BD people

Something that can be turned on and off according to

prevailing conditions

In its entirety, something that cannot be measured using ROI

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Cont’d

What it is:

A business process about creating client value

A firm culture that has the most significant impact on firm

performance

The guiding force for strategy and strategic management

The bed rock of firm performance (market orientation)

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Me arguing with someone!

http://www.thenewlawyer.com.au/article/firm-marketing-

inspires-email-vitriol/493687.aspx#comments

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We are now in the ‘value’ era

Clients want their PSF to be more commercially oriented and

demonstrate the value they provide (i.e. cost savings, risk

mitigation, business improvement)

According to HBR (March 2006): value propositions should

have a resonating focus with clients that identifies a few key

points of difference (with points of parity)

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What Professionals Really Sell According to research conducted at the Centre for Management of

Professional Services (Said Business School, Oxford

University), a firm's ability to differentiate itself and create a

sustainable strategy relies on four factors:

· Expertise - knowledge and experience

· Relationships - clients and other stakeholders

· Reputation - expertise, experience, and engagement

· Service - processes, services, and engagement

According to the authors, a sustainable strategy can be built around

these four factors whereby they create a virtuous cycle of

innovation, organisation learning and knowledge management, as

well as access to new markets. The authors' research

demonstrates clearly that for a firm to create differentiation that

means something (i.e value perceptions to client), a firm must

spend time on factors aside from technical quality of work.

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What marketing really is: Bed rock of firm performance

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Client value, satisfaction and firm performance

Market based strategy and strategy implementation (based around value for clients)

Client orientation

Competitor orientation

Inter-functional

coordination

What Does it Mean to be Market Oriented?

Marketing is a business philosophy that puts creating and

delivering customer value at the heart of all that an

organization does

It is an organization culture that acquires and disseminates

information-cross functionally and across hierarchies, and

acts upon that information

This sharing and information coordination tolerates no

functional silos

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Why firm culture is so important

The recent review and findings by the Accounting & Corporate

Regulatory Authority of Singapore (Acra) that accounting firms in the

region are struggling with audit quality should make firm leaders sit

up and take notice.

Research has shown that auditors are more likely to accept risky

client assignments if they believe it would lead to further work

In a paper published in Behavioural Research in Accounting by

Jenkins et al (2008), the authors set out a number of areas whereby

culture can impact a firm’s governance and the role that seniors

within the firm play through their behavior such as mentoring, client

interactions, communication, and social influence. They highlight a

number of studies and situations whereby firms have engaged in

unethical actions (lowered audit quality) due to the cultural

conditions of the firm. Primarily, those cultures that value revenue

generation over all other activities tend to be at most risk

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What should you strive for? (David Maister)

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Quick Case

Harrex Group, NZ (source: J of Accountancy, 2008)

Founded in 2007 by Brendan Harrex, first chief value officer

at his former firm

He says focus on time and cost only creates illusion of

managing a PSF

What really matters is value creation

No more hourly billing, a change of culture

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Cont’d

Key Performance Indicators for Harrex:

* Ability to think strategically on behalf of clients

* Client Communication

* Delegation

* Turnaround Time

* Client Feedback

* Effective Listening and Communication Skills

* Knowledge Elicitation/Coaching

* Risk Taking, Innovation and Creativity

* Continuous Learning

* Passion, Attitude and Commitment

* Team Player

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Thank You!

If you want any of the full references for work cited or have

any questions, please feel free to contact me:

bob@srchk.com, www.srchk.com

Blog: www.marketingasia.typepad.com

Twitter: http://twitter.com/robertsawhney

LinkedIn – Robert Sawhney

Our New Book: published by Lexis Nexis in 2009) available

from LN in HK and www.amazon.com.

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