During the first part of this year, I’ve written rather extensively about the merits of building a firm that is deeply positioned around expertise. In short, be it an engineering firm, an IT firm or financial services firm, we believe the best clients are those that hire the professional firm for its “proven expert guidance” rather than its “warm bedside manner.” That said, I don’t want firm leadership to misunderstand our opinion in this regard. The best clients hire experts. They stay or leave the firm based on the service experience.

The 2 Sides of the Service Experience
There  are really two components to the service experience that any competent firm must manage:

1. WHAT = Technical Service Delivery: This is the functional part of the service delivery. It’s the technical expertise that the client lacks that your firm provides. If you’re an engineering firm designing an industrial facility, it could be the process of understanding the business purpose for the facility, analyzing the site, making technology recommendations, and developing the physical drawings and documentation necessary to actually begin the build process. It’s WHAT the client hired you to do.

2. HOW = Client Service Management: This is the service delivery itself. It’s the process of setting and managing project expectations, providing clear and regular communication about budgets and timelines, communicating progress updates, and managing the challenges that any complex project inevitably faces. It’s HOW you deliver what you were hired to do.

Client Satisfaction is an 80/20 Proposition
Let’s take each aspect of these in turn:

1. WHAT = 20%. The inevitable mistake that most firms make is falling victim to the mantra that it’s “all about the work.” The prevailing belief is that if the firm provides outstanding technical service delivery, then the client will ultimately be satisfied with the outcomes. The fact is, often, clients are not capable of evaluating this component of the service. If they were able to completely evaluate the technical merits of your work, they might not need you at all. If they are capable of evaluating the technical aspect of your work, chances are they don’t want to. After all, that’s still why they hired you. In most cases, the technical competence of the work is assumed. At best, this portion of the service makes up 20% of a client’s satisfaction with a firm.

2. HOW = 80%. Which brings us to the other half (or rather 80%) of the service experience that clients can easily evaluate and do often: client service management. This is the softer side of the relationship. Was the firm easy to work with? Did the project manager set clear expectations? Was the budget and timeline described clearly? Was it accurate? Were budget and time overruns communicated early and often? Did the professionals communicate themselves clearly and avoid jargon. Were the firm’s documents timely, organized, and well presented. In short, did the firm do what it said it was going to do when it said it was going to do it?

So, Satisfaction = Retention. Right?
So, if you do good work and you manage that work effectively your clients will be satisfied. Satisfied clients come back for more. Not so fast. These are all just the baseline expectations any client has of any service provider. If you don’t do these things consistently, they’ll fire you. If you do all these things consistently, well, they still may fire you. After all, you’ve only delivered what they paid you for in the first place.

Just because the airline got you there on time and didn’t lose your bags doesn’t really mean you’ll fly them again does it?

We will explore the deeper aspects of client retention in more detail in an article later this month.

Over the course of a month, I’ve interacted with a lot of people tasked with the job of marketing professional firms across a variety of industries. Some of these folks have a marketing background, others are professionals turned marketers. Some have high level responsibilities such as client attraction, others are tasked with more tactical issues such as tradeshow coordination or development of promotional materials. Regardless, most struggle with a similar conflict within the culture of their firm: quite often, the professionals they serve don’t understand nor value the marketing discipline within their firm. For the most part, I chalk this up to misunderstanding. As a result, I’ve discerned Three Myths of Professional Services Marketing:

1. Marketing = Sales Support
Often, when I ask firm leaders how many people are in their marketing function, they tell me how many people they have to assist the proposal writing process. While developing project case studies, producing sales collateral and coordinating tradeshow activities are all necessary activities within a firm, if your entire marketing function consists of producing materials to support the business development process, you might as well be running down the middle of a busy street with your eyes closed.

2. Marketing = Promotion + Lead Generation
Most firms task marketing solely with the task of promoting the firm’s experience and previous project work. They ask the marketing team to produce an ongoing stream of direct mail, email, and possibly social media content promoting the work the firm has done in the past. The hope is that this steady flow of “me, me, me” communications is going to drive leads to the desk of the business development team. When this doesn’t happen, marketing is considered fundamentally flawed and leadership inevitably feels wary to commit more resources to the task.

3. Our Best Clients are Referrals
It’s logical to compare the clients that were referred to us to those that called us blindly (or, worse yet, ones we called blindly) and draw the conclusion that our best clients were those that were referred to us from a trusted source. But, what if you compared that same set of clients to a set of clients that specifically sought your firm based on your proven expertise in a much needed, narrow discipline? Put more simply, who do the best clients really want to hire — a likeable firm referred to them by their friends or an expert practitioner with narrow, proven experience solving their fundamental business problem? I think we’ll all agree that our best clients are actually those that hire us solely for our expertise.

So, What Should Marketing in a Professional Services Firm Look Like?
Marketing should be assisting firm leadership with the difficult task of determining what markets we should be in and which services we should provide. It should be helping firm leadership “productize” our most valuable and differentiated services to make them more repeatable, more profitable, and easier to sell. It should be leading the firm through the process of developing, producing and distributing a consistent flow of expertise-driven content to draw higher value clients to our firm. It should be aligning marketing investments with firm business strategy by developing an actionable marketing plan to help the firm achieve its intended business objectives. And, yes it should be supporting the business development process by producing client case studies, coordinating proposals, and managing tradeshow marketing.

So, what do you think? Is marketing in your firm delivering the value it should be?

As followers of this blog probably know, Mlicki advocates strongly for “expertise-based” positioning within a professional services firm. We believe that efforts to position a firm solely on brand…meaning positioning it only on the efficacy of client service (brand perception) and the way it communicates (brand personality) fall short because they fail to create clear, meaningful differentiation in the mind of a prospect.

What is Expertise-Based Positioning?
If your only source of positioning sounds something like this, “we do what the larger firms do, only we do it [better/faster/cheaper/etc.]” you’re probably not doing it. That’s not to say that this approach to positioning a professional services brand is 100% not viable. But, it is to say that the firm must provide a credible claim of expertise beneath these high level brand statements that identifies a narrow, well defined client sector in which it operates and offers specific reasons why the firm is better than other viable options for the client’s business.

Meyer Wilson: A Great Example
While we don’t regularly work in the legal profession, I recently came across this Columbus-based law firm named Meyer Wilson. This is an example of a very well positioned law firm that is practicing clear expertise-based positioning. The firm states very clearly on its homepage that it is a law firm “dedicated solely to investor claims and class actions.” While other firms propose to provide “corporate counsel” which essentially rounds out to anything a billion dollar corporation might ever need related to legal services, Meyer Wilson is carving out a very narrow, defined practice that helps it attract one type of high value clients while demanding higher margins for its work. Partners of general practices take note, the future of law is in focus…Meyer Wilson is on to something.

Business First Columbus recently wrote an article about the growing shortage of information technology talent. The article, titled “Plentiful job-seekers finding trouble matching plentiful jobs in tech,” highlights the widening skills gap between today’s job seekers and the available positions companies are trying to fill. Increasingly, IT consulting firms and IT departments of companies are looking for technology talent, and they’re just not finding it on the open market. As a result, competitors are poaching talent to fill the gap.

The Three-Legged Stool of Professional Services
One of the inherent difficulties of managing the professional services firm is the difficult balancing act that firm leadership must play between satisfying the needs of the firm’s clients, its people and the firm itself. At times, the somewhat competing needs of each threaten to tear the firm apart at the seams. Some examples:

• While clients prefer to hire experts with proven past experience solving their particular business problem, talent is drawn to the firm for the opportunity to work on diverse projects with diverse clients.
• While selling more projects like those we’ve done in the past drives near-term profit, failure to innovate into new services and offerings can wreck long-term profitability and the firm’s very viability.

The “Fee Squeeze”
A month or so ago, I had coffee with the Principal of a midsized IT consulting and staffing firm. I asked for her perspective on the market, and she gave me this very simple answer: “In the recession, IT spending was cut by 20% across the board. All that business has now come back, but clients want to pay 20% less for it than they did 3 years ago.” Simultaneously, finding the talent to deliver the work is becoming more difficult and more costly. So, which leg of the stool is suffering most? Clearly the firm and its profitability.

Ways to Respond
So, if clients want more for less, and employees simply want more, how can the IT consulting firm exist without bankrupting itself in the near term? Well, one approach is to take a close look at the firm’s internal brand. What does that mean?

• It means looking at your people the same way you look at your clients: understanding their needs, motivations and wants and developing “products and services” that align. Only, in this case the services may take the form of unique benefits, unique work environments and firm culture.
• It means building context for your organization by establishing a reason beyond profit that the firm exists: a brand purpose that connects with your people on a visceral level. People often work for below market wages when they believe in what the organization stands for and what it’s trying to accomplish.
• It means understanding the fundamental elements of employee engagement: autonomy, mastery and purpose, and training partners and managers in the skill sets necessary to ensure an environment that enables engagement to occur within the workforce.

2012 is now officially upon us. When we look across the landscape of professional services firms, it’s rare that we see truly innovative business models or truly innovative products. All too often, firms are relying much too heavily on selling that next project or program within their given area of expertise. I think it’s time to look at things from a fresh perspective.

Stop Being “Product-Centered”
At most firms we see, marketing is viewed only as a means to sell the services the firm has the experience and expertise to deliver. We consider this a “product-centered” mentality: using marketing solely as a means to sell what we have and what we know how to do. While marketing as a source of lead generation is certainly fundamental to the success of the professional services firm, relegating it solely to this task puts the very future viability of the firm at risk.

Implications on Positioning
“Product-centered firms” tend to fail in the task of positioning. The prevailing belief in firms like these is that “service” is what differentiates the firm — we’re more flexible than other firms, we’re more accomodating, we’re more proactive. In short, their claim is one of better client service. Essentially, they’re selling what they know how to do and what they want to do and trying to tweak it just enough to win the work. But, notice that it’s all from the perspective of the firm and it’s, at best, incrementally better than the competition.

The Market-Driven Firm
By contrast, the market-driven professional services firm is one that is innovating itself to meet the needs of a clearly defined set of clients they know extremely well. It might be innovating services to meet unmet client needs or better yet reinventing its own business model to better align itself with this narrow set of clients.

Need Some Examples?
Just last week I met with a law firm that created an entirely separate company to custom develop a variety of niche software products to more effectively manage the work they do for select clients within a narrow industry vertical. Or, consider Columbus-based QStart Labs. It’s innovated away from the fee for service relationship typical of most IT consulting firms by offering a cost + revenue share model to help take start-up web products to market in a very short period of time. This kind of market innovation not only enhances the firm’s expertise within the target market, but it creates ancillary sources of recurring revenue.

2012 is the Time to Start
But, here lies the rub. If you’re firm’s not positioned deeply on expertise, or if it hasn’t established itself as an expert provider of services to a select industry vertical or client type, you won’t likely have the skills necessary to innovate new products. So, in 2012, start with positioning. What clients does your firm understand better than anybody else in the world? What are their needs? What services could you provide that you’re not providing now? What services could you provide that no one is providing at all?