How to market professional services like consulting, degrees, hospitals, R&D firms?

You probably know that the marketing of Products and Services is different. In this article I am giving thoughts on how the marketing of professional service firms is different than that of other services. Please do write your comments at the end by clicking on the comment button.

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Generally the term “Professional Services” covers 5 types of firms

1. Law and Accounting firms characterized by high knowledge intensity, professionalized workforce, and low capital intensity
2. Hospitals and Universities (Campuses of experts and teaching ) characterized by high knowledge intensity,  professional workforce and high capital intensity
3. IT service firms (Campuses of getting process done) characterized by high knowledge intensity,  professional workforce and high capital intensity
4. Consulting Firms characterized by high knowledge intensity and a low capital intensity
5. R&D and Biotech firms characterized by a high knowledge intensity and a high capital intensity.

Do not be embarrassed to do marketing!  

1. They would secretly like to market in order to expand their revenues and yet, for the sake of maintaining their “professional stature”, they would not like to be seen marketing!  
2. As a result most firms ignore marketing in the belief that "our work speaks for itself" or "Marketing does not go with the dignity of the profession". Of course there are few professional service firms that hire ‘marketing people’ but leave them to their own devices and essentially expect them to be busy with developing websites and brochures and designs.
3. And yet, the very same people secretly admit they are worried what is happening behind their back. They know there are competitors out there who are soliciting their clients and undercutting their fees. They know that there are competitors out there doing well even in depressed markets because they “market”. There are competitors who have the right relationships with their clients and have good referral sources.

Do not market as if it is a product

1. They often use a “Product Marketing” model and express their expectations from marketing as “getting the name out”, “put the information into the hands of the buyers”, “build company reputation” etc.  When people buy products, they do so because of what they can see, see, hear, feel, taste and smell in the item. The item!
2. But in professional services, there nothing to see or taste or feel. It is not an item! Howsoever well known your firm may be,  you will get hired (or not hired) only  after they meet you – in person ! The fact is that people buy other people, not firms.
3. Professional marketing is about the trust that the clients have in the people, their expertise and their network.

Do not forget your existing clients

1. Sometimes the professional service firms consider their existing clients as “annuities” on which they can live without measuring their satisfaction, communicating with them, seeing if they can mine them for more business and to exploit their reference potential. Ideal mix of business should be :   
• 50% “existing clients” and their referrals
• 25% “referral sources" like alumni, people in the field
• 25% from "strangers"  seminars, articles, speaking, ads, direct mail
2. Unfortunately, most firms don't even know what other services their customers buy and from whom. You must be wary of others who may be providing a different service to your existing client because there is a scope for infection. The relationship is now at risk because they themselves– or can bring their buddies into your client relationship - can compete with you. It secures their position and pays back referrals received.
3. It's also important to continue to market to your clients to let them know how valuable they are and why using you is such a good idea.

 Do not ignore your own employees

1. Successful professional service firms know that their marketing -  no matter how great – will be useless if the employees back at the firm who will need to deliver it – are not on board. They must involve everyone at the firm in marketing of the firm's services.
2. They must know that everyone is conveying a message all of the time to the outside world? How is your phone answered? What do your finished reports look like? What does your office look like? How do your people dress and talk? How do they come across to your clients?
3. If your firm and your people aren't in alignment with the kind of client you're trying to attract, marketing can't work. Everyone in the firm needs their own "personal marketing plan" . Even the receptionist. Everyone needs to know what's expected of him or her as his or her part of the marketing effort.

Do not aim for too many different customer types

1. Most professional service firms want everything! They say; “You want it? We got it!”. But in reality, if you cannot be good at everything for everyone. You need to be good at “vital few” things  which people really want. That is where you must invest and focus on. And for this you must know your market very well. 

Do not forget : Marketing is a process, not an event

1. Marketing  process is slow to start. Do not let there be a gap. It needs to be done not only when you need new business but when you are doing your existing business. If you do it sporadically, you will need to restart the process all over again - almost start from scratch – and that reduces the morale.
2. That is why successful professional service firms set aside a percentage of gross revenues for marketing.  
3. Most professional service firms (and individuals too) don't take the skills of personal marketing and selling seriously enough nor are willing to spend enough on making them bring in more business.
4. There is time in everyone's day to go to market: it's called lunch (or breakfast, or dinner). Most people eat lunch, even when busy. However, we usually eat lunch by ourselves or at our desks or with our friends at the firm. We suggest not less than two lunches or breakfasts or after-work meetings a week with clients, referral sources, prospective clients, etc. even during busy season.

Do not rely only on the marketing people

1. Many professional service firms  allocate someone to the marketing function (sometimes a clerical person with no real knowledge or background in marketing) and expect him or her to be the ones to bring in business. This does not normally work.
2. Everyone must be involved in the marketing effort! The partners can't pass it on to the staff and to the marketing person.  All that a marketing can do is to provide the bigger and more frequent opportunity. Somebody still has to show up and get the work done. The biggest complaint of the marketing people in professional service firms is "I can't get our people to do anything."

Do Not Forget to use leads generated by marketing

1. Good leads are hard to come by for most of us. So you must jump on referrals and hot leads immediately before they cool off. The longer one waits, the colder that lead gets and the harder to convert into business. 

Running a business of selling services is different from that of selling products

You need to be a fundamentally different manager and you need to very different approach and priorities and assets to run a service business. Click here to understand major differences. And do write comments on the blog !!

How B2B marketing differs from B2C marketing

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Here are 71680 marketing strategies - which is yours?

A marketing strategy has 7 elements as follows

1. Target Customers : 8 ways of defining target customers
2. Value proposition : 7 ways of defining your value proposition
3. Locating target customers : 5 ways of locating them
4. Accessing these target customers : 4 ways of accessing them
5. Persuading these target customers : 4 ways of persuading them
6. Transacting with them : 4 ways of transacting with them
7. Servicing these customers : 4 ways of servicing them

By picking one from each of these 7 elements, you will get 71680 combinations. Each of them is a POSSIBLE STRATEGY. Which of this is THE RIGHT STRATEGY FOR YOU ? That is THE KEY QUESTION and the answer is not easy. The question cannot be answered unless you do the most important part of formulating marketing strategy - the situation analysis - Remember 5 Cs ? Company, Customer, Competitors, Context and Collaborators. 

Nevertheless you will feel amply rewarded even if you went through each factor and write down your position against it. It will jog your mind and bring many useful points to the surface of your mind. Spending 30 minutes will be highly useful.  

I am also giving an example for a simple object. A screwdriver. How many different ways can I formulate a strategy ? See at the end of this post.  

TARGET MARKET : This is the most important part of marketing

1. Number of customers 
2. What application they are using the product for
3. What are they doing now for the same application
4. What price point will appeal to them if any
5. Where are they on their "Buying Journey"
6. What are their expectations
7. What is their Decision Making Unit, who are members, roles
8. What are their buying habits 

VALUE PROPOSITION : What value do you plan to create?

1. all applications :
    better marketing mix at a slightly higher price
2. all applications :
   slightly less attractive marketing mix at a lower price
3. Specific application :
   better marketing mix at a slightly higher price 
4. Specific application :
   Slightly less attractive marketing mix at a lower price
5. Specific Customer segment :
   To wean upper end customers away from all competitors
6. Specific Customer segment :
   Slightly less attractive marketing mix at a lower price
7. Which of this value will be created by you
   and the rest by your business partners and channel members

GO TO MARKET :  How to locate, access, pursuade and transact?

Locating target customers :

1. By generating walk-ins at the outlets
2. By prospecting and lead generation
3. By taking appointments
4. By cold calling
5. By channel members

Accessing them

1. through e mails or net
2. through personal contact
3. through mass media
4. through channel members

Persuading them

1. through e mails or net
2. through personal contact
3. through mass media
4. through channel members

Transacting with them

1. through outlets
2. through channel members
3. through direct sales force
4. through portals

Servicing them

1. through outlets
2. through channel members
3. through direct service force
4. through portals

Formulating a marketing strategy for a screwdriver. 

TARGET MARKET : 

1. Number of customers : Almost every household needs a screwdriver. In urban India alone there are 30 million concrete houses and can benefit from a screwdriver. 
2. The application we are targeting is giving a useful gift to males in these houses. The product we have in mind is a screwdriver packed in a box as a gift. It will be priced at under Rs 100. 
3. Currently people give clothes, ties, belts, pens as gifts to males. Our product at Rs 99 will be cheaper than all these items and will be attractive.
4. Since the idea of giving a screwdriver as a gift is new, we will need to make people aware. Currently our product may not be on the "Buying Journey"of our target customers.
5. The expectation of the customer will be a showy and good looking gift box and the screwdriver should look polished and attractive. 
6. A Rs 99 product will be purchased by an individual on his own but since the idea is new the person may cross-check the decision with others. 
7. The buying habit will be from a gift store or department store.  

VALUE PROPOSITION : 

We want our screwdriver to look polished and good. We shall therefore use high quality stainless steel and will make special arrangements to ensure that the product will not have finger marks.  The handle of the screwdriver will be transparent and molded in high grade plastic and will be avialable in different colors. We will design a gift box with a see through window. The box will be very attractive.

LOCATING TARGET CUSTOMERS

We shall rely on our channel members ( gift shops and departmental stores ) to stock, display and recommend our product to all customers who come in to buy gifts for male friends.

ACCESSING TARGET CUSTOMERS

The counter sales persons at the outlets will access the walk-in customers. Attractive displays will be put up on sales counters.

PERSUADING TARGET CUSTOMERS 

Since the pursuation will be done by the counter sales personnel of the retailers, we shall organize a special training program of an hour for such personnel. There also will be an incentive plan for them.

TRANSACTING WITH THE TARGET CUSTOMERS

The outlets have adequate facilities to undertake transactions.

SERVICING THE TARGET CUSTOMERS

There is no need for any servicing arrangements.

What really is the real difference between marketing and sales in practice ?

The textbooks say that sales is a part of marketing. But that is only on paper. As Philip Kotler himself says, the economics and culture of the marketing and sales departments is very different and it is very difficult to get a person to head and lead both the departments at the same time! Actually it gets much more complex than that because the exact job description of marketing and sales varies significantly from company to company and industry to industry. 

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Are you making these mistakes while launching new products ?

The fact is that these marketing mistakes are easily avoided; and yet people make them all the time. Are you sure you too are not committing these mistakes in your own business?

Your new products are conceived 
in a wrong place and in a wrong sequence
Your new product process starts with an "idea" but you forget whose idea is it. Is it your internal idea or is it from an external customer? Unfortunately, many companies start with what they think is good and is based on internal inspiration / reason : it is "the latest", "it can be made on our existing machines", "we know how to procure the main material at a good price", "how can we not have this product?", "we already know the customer so half the job is done already", "the CEO himself likes it" etc.   You should invert this process and start by asking which customer's what need is strong and urgent and this is likely to make you succeed more often. This is called as market positioning. Doing things in the wrong order is delightful but a proper way produces better results. 
 
You treat casual feedback 

from untrained sales force as facts.

Sales people are not always right about what the market wants. Their 3 standard formulas are "improve the product", "reduce the price" and "spend more on promotions".  The sales people are focused on "how to sell more next month and exceed targets"; everything else is secondary to them. In any case, many times the sales people do not get to meet the people who truly influence or make decisions. That is why you should not consider the sales force feedback as undiluted truth. I suggest you put a good salesperson on a team along with  marketing and technical colleagues and (a) train them in the methods of ferreting out facts (b) establish direct contact with the customers.  How to listen to the market is an important skill and needs to be developed in the organization - not as a specialist discipline - but as general skill that is needed widely.
 
Your managers  taking marketing decisions
have no direct contact with customers
Your managers rely on "gut feeling". Your marketing managers think they are the "market" themselves. They conceive new products and services based on books, discussions and fads alone without input from the live customers. Probably your managers avoid complaining customers like a plague. If this is true, you definitely need a develop a "customer culture". You must encourage all in the company to take every opportunity to interact with the customer and learn what are their needs and "pain points" and how do they go about purchasing. One low-cost approach is to train yourself and all of your employees to routinely interact with customers for the explicit purpose of gathering intelligence about their needs or handling their grievances . Sometimes the best information can come through casual comments. Soon you'll begin thinking like your customer - which is the first step in overwhelming your  competitors.

You do not know your business, customer, purpose.
You blindly copy methods.  

There is only one universal truth in marketing  - "KNOW WHO IS THY CUSTOMER AND LISTEN TO HIM";  everything else is situational and need not be done under all circumstances : better product is not needed in all circumstances, lower price should not be the objective in all situations, wider distribution need not necessarily result into better results, you do not need to advertise or promote all the time, you need not appoint dealers for everything. For example, B2B customers tend to be more measured and rational in their approach to purchasing, and they are far fewer in number. They're smart and will make you smarter if you engage them in a peer- to-peer dialogue. Let them lead you to their areas of interest, probe with skill, and you'll be shocked at how much you'll learn. In such situations do not use surveys because they are used by B2C companies selling mass consumption standard products. 
 
You gather only qualitative customer feedback.

The partner of a business spent months interviewing customers, only to hear his partner say that he didn't believe what customers were saying. Managers and owners often hear what  they want to hear and then parade some customer quotes for support. What you need is quantitative data, which measure customer importance and satisfaction on key outcomes. Skip quantification and your new product will be based on assumptions, bias, and wishful thinking. 


You listen only to existing / immediate customers. 

Unlike B2C producers, your product might become part of your customers' products, your customers' customers' products, and so on. It's a mistake to interview only your direct customers, because they are usually unable or unwilling to disclose downstream needs. It is also very important to know why your non-customers are not buying. Or why your competitors' customers are not buying you.