Inputs, outputs or outcomes – which do YOU measure?

Engaged yesterday in a LinkedIn discussion with self-confessed marketing anarchist John Lilly about the difficulty of setting success-based contingency fees for marketing projects, I was reminded that one source of considerable tension between marketers and their  management teams is misalignment of objectives – a topic I wrote about on this blog some months ago.  Even if everyone is on the same page with regard to objectives, however, there is no guarantee that this will result in measurement of what really matters.

In any business process, it seems to me* that three variables have potential to be quantified:

  • Inputs
  • Outputs
  • Outcomes

As applied to the marketing function, these might translate as follows:

  • Inputs – the systems, processes, people, content, investments and other assets that are put in place to deliver marketing programmes
  • Outputs – the various ‘deliverables’ (events, white papers, media coverage, website hits, social media ‘followers’ etc.) that those inputs generate
  • Outcomes – brand awareness, demand, influence, customer loyalty etc.

Part of the problem with evaluation of any marketing function is that its outcomes can be so difficult and / or expensive to quantify – and if anything, this factor is magnified in professional services firms.  Typically, only the largest firms choose to invest in evaluation programmes that gauge brand awareness in any meaningful way, for example – and too many firms mistake a SATISFIED client for a LOYAL client.  Further, it can be hard to convince sceptical Partners of the connection between (for example) thought leadership work executed in the first quarter of Year One and a major client engagement won in the fourth quarter of Year Two.

Unfortunately, this often results in the development of marketing programmes whose success or failure is judged solely by reference to inputs and outputs, and not to what really matters.  Some marketers focus their efforts on building highly scientific marketing processes, then measuring them within an inch of their life without questioning the outcomes that they will generate.  They sink huge sums into CRM systems, but invest nothing at all in understanding the factors that drive buying behaviour.  They set spurious targets for the number of press releases that must be issued, or the number of prospects that must attend events.  They pore endlessly over website stats and agonise if a competitor firm has more followers on Twitter.

Clearly, marketing evaluation is not a topic that can be resolved in a 500-word blog post.  However, I would urge any professional services marketer who wishes to make a real contribution to the success of his or her firm not to lose sight of the importance of outcome-orientation.  Sure, it’s important to have quality inputs and a steady flow of quality outputs, but consider this: if the outcomes are lousy, what value have the inputs and outputs added?  And if the outcomes are great, who the heck cares what inputs and outputs were used to achieve them?

* I dare say that any process consultants who have inadvertently landed here will correct me if I am misguided in this analysis

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Embracing the digital future

Last year, Oxford Economics released an excellent and thought-provoking report, identifying four ‘Digital Megatrends’ for the year 2015.  According to the report, we can expect the following to occur over the next few years:

  1. Mobile devices will reach ubiquity;
  2. Cloud computing will come of age;
  3. On-demand business intelligence will become critical; and
  4. Social media and collaboration will become the norm.

So far, so not surprising, you might say – but the report is worth a read, nonetheless.

Professional firms have always tended to regard the digital world with a degree of suspicion.  Back in the ’90s, concerns over client confidentiality and data security meant that some firms were slow to adopt email – while others took a cautious approach to the development of websites because they were worried that they would end up giving away hard-earned intellectual property free of charge.  And today, of course, a robust debate has arisen over the value – and risks – of social media.

Of course, it’s important not to get too carried away by the hype around the impact that digital platforms will have on the world – much of which is driven by companies that have the most to gain if the predictions prove to be correct.  The Oxford Economics report, for example, was sponsored by, among others, SAP, AT&T and Cisco. If one believed the current media chatter around mobile technology, for instance, one could be forgiven for concluding that a company (or in our case, a professional firm) whose website is not optimised for viewing on mobile devices such as smartphones and tablets is somehow behind the times – yet a recent article on the Search Engine Land website suggests that fewer than 10% of the QuantCast “Top Million” existing websites are currently “mobile ready”.

A question of balance

There is little doubt that the world will continue to become increasingly digital, and as marketers and strategists for professional firms, our job is to help our colleagues to embrace these new platforms in a measured way – helping them to move with the times, but being prudent and selective as to the trends we follow and those we choose simply to monitor with interest.

Crucially, we must look beyond the value that digital platforms can bring to our communications programmes, and consider how the digital future will impact our clients and how it will affect service delivery.  For example:

  • If companies increasingly expect access to on-demand business intelligence, what opportunities and threats does this present for accounting firms?
  • What impact will mobile and / or cloud-based platforms have upon the changing structure of the legal services sector?
  • Will the increasing democratisation of content production and ownership lead to further commoditisation of less sophisticated services?

Someone has to take the lead in identifying the as-yet-unseen sources of value – and sources of risk – for professional firms in the digital future.  And if this leadership doesn’t come from the marketing function, the question is, where WILL it come from?

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Social media regulation: the shape of things to come?

On January 4th, the Office of Compliance Inspections and Examinations (or ‘OCIE’) of the Securities and Exchange Commission issued a National Examination Risk Alert on Investment Adviser Use of Social Media.

While the Alert in itself is of limited direct relevance to the majority of professional services firms, it may serve as a useful bellwether for future regulatory approaches to social media.

The introductory section is worthy of particular note:

“Social media is landscape-shifting.  It converts the
traditional two-party, adviser-to-client communication into an interactive, multi-party dialogue among advisers, clients, and prospects, within an open architecture accessible to third-party observers.  It also converts a static medium, such as a website, where viewers passively receive content, into a medium where users actively create content.”

I don’t think I will be alone in concluding that the paragraph above may just as well be describing the professional services market.

The Alert goes on to identify factors that an RIA “may want to consider when evaluating the effectiveness of its compliance program” and actually does a pretty decent job – even drawing the important distinction between ‘personal’ and ‘professional’ social media platforms.  The factors identified in the Alert include:

  • Usage guidelines
  • Content standards
  • Monitoring
  • Approval of content
  • Use of firm resources
  • Criteria for approving participation
  • Training
  • Certification
  • Information Security

In my view, it’s well worth reading the Alert – which by the usual standards of SEC publications is mercifully short, at a mere seven pages – simply to get a sense of the way the wind may be blowing on social media regulation.  Many of its recommendations may be little more than common sense, but I think they are no less apposite for that – particularly considering certain Bar Associations’ efforts to circumscribe social media usage in the same way as regular advertising.

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Strategic alignment: are you all on the same page?

At a seminar a few weeks ago, I happened to bump into a former colleague whom I hadn’t seen for many years.  Over a pleasant cup of coffee, we shared a few anecdotes about the ‘good old days’ – but when it came to discussing our current working lives, it was clear that all was not well with my friend. Not to put too fine a point on it, she was tearing her hair out in frustration at the lack of clarity in strategic planning at the firm where she now works.

“No matter what programmes we develop in the marketing and business development team, we always get ‘push back’ from fee-earners – and not because they don’t understand or buy into what we’re trying to achieve,” said my friend.  “Most times, they are really enthusiastic, and the managing partner is very supportive – but there always seems to be a reason why our plans can’t happen the way we want them to.  It might be that we don’t have the right people, or there isn’t enough time, or some operational initiative takes priority.  It’s not just that we’re not on the same page – sometimes I wonder if we’re all even reading the same book.”

The conversation reminded me that even in organisations staffed by very clever people, some pretty daft things can happen.  In this case, it was clear that the firm had lost sight of the need for proper alignment of its three core strategy propositions:

  1. A VALUE proposition that attracts clients;
  2. A PROFIT proposition that enables money to be made out of the value proposition; and
  3. A PEOPLE proposition that ensures that personnel are motivated and have the skills needed to deliver points 1 and 2.

In my friend’s firm – like most others, perhaps – ownership of these three propositions sits in silos. Marketing owns the value proposition; the profit proposition is jointly owned by the finance and operations teams; and the people proposition sits within HR.  All perfectly reasonable – after all, those silos are where the specialist skills exist – but a recipe for disaster if those functions are not in lock step.

For example, a firm might have a value proposition predicated on outstanding client service – but this can only work if the profit proposition allows sufficient bandwidth for fee-earners to devote time to building relationships as well as billing for work, and the people proposition ensures that personnel with the appropriate skills are on board.  And a business model based on highly-leveraged, low-cost personnel may struggle to be effective if the value proposition promises a high-touch consultative approach and a high degree of customisation.

Of course, tension between the three propositions doesn’t mean that a firm will fail.  But like the organisation my friend works with, it is almost certain to perform less well than would be the case were the propositions properly aligned.  In fact, conflicts between the three propositions will almost inevitably result in:

  • Lower levels of customer satisfaction
  • Lower profitability; and
  • Higher rates of employee churn.

Needless to say, all three have a negative impact on the value that the organisation creates.

Close cooperation between those managers responsible for the three propositions is beneficial to all of them, and to the firm as a whole.  Ideally, this should come from the top down, but even in the absence of a forum in which leaders of all functions are represented, progress toward alignment can be made.  Who knows, even a simple lunch with colleagues from other management functions might be a starting point toward better alignment, and a more successful firm.

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Branding for legal firms

Last week, Scott Goodson – chairman of the advertising agency Strawberry Frog* -  posted a guest article on the Forbes magazine blog on the topic of Brand Building For Law Firms.  In the article, Goodson relates a conversation with a client, during which a discussion arose as to what branding could mean in the legal sector.

Goodson’s article is not without flaws.  To begin with (and to his credit, Goodson does acknowledge the point) he has had little or no exposure to legal firms’ marketing activity – which some might suggest rather undermines his authority to comment on the matter.  Secondly, he commits something of a faux pas by referencing Wikipedia for his definition of what constitutes a brand.  And third – as might perhaps be expected from an ad agency – the concept of branding is discussed principally in the context of advertising campaigns.

Notwithstanding the above quibbles, though, any article that encourages debate around the thorny issue of professional services branding must surely be welcomed – and in drawing the conclusion that in the legal sector in particular, opportunities still exist “to build global brands based on universal brand ideas” Goodson’s approach is certainly a refreshing one.  But the question remains, what would a “universal brand idea” look like in the context of the legal market?

A brand by any other name…

In Goodson’s view, “a legal firm that builds a global brand, based on a relevant idea on the rise in global culture, could create a powerful platform for growth.”  Fair enough, but is it really essential for the ‘brand idea’ to be ‘on the rise in global culture’?  Do clients really expect their legal services providers to be on the bleeding edge when it comes to global cultural resonance?  Ultimately, is it (to use Goodson’s own term) relevant to clients?

Recent Managing Partners Forum / Financial Times research into the buying behaviour of law firm clients seems, at first sight, to suggest that buyers do not perceive ‘brand and reputation’ to be at all significant in their decisions as to which firms to appoint.  Now, I’m afraid I don’t buy that – particularly given that the survey ranks such concepts as ‘understanding of industry’ and ‘cutting edge thinking’ (perceptions of both of which must surely be heavily influenced by brand) very highly among selection criteria.  In truth, it seems to me that buyers of legal services ARE influenced by brand – but they do not interpret this influence in the same way that they might if asked a similar question about (say) Disneyworld Resort, the BMW 7-series or the Apple iPad, where buying into the brand is part of the fun.

In a relationship between a professional services firm and its clients, the ‘brand experience’ that drives a preference to engage one firm over another is based on the consistent delivery of great client results and great client service.  In turn, this is driven by the firm’s culture.  Are the firm’s people smart, collaborative (to get the best expertise to the client), responsive, good to work with, client focused?  Ultimately, has the firm clearly defined – and then consistently applied – a set of service values and delivery practices that result in a high quality client experience?  Or does everyone in the firm do it their own way?

Firms need to understand the issues that actually matter to their clients, and use those as the basis of their differentiation strategies.  That way, it seems to me, they have a decent chance of establishing the sort of ‘universal brand idea’ that Goodson recommends in his article.

* Why DO so many ad agencies seem determined to have wacky names, by the way?  Is it a brand thing?

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A lesson in miscommunication

London 2012 LogoBack in April, 1.8 million people placed ticket applications for the London 2012 Olympics.  Inevitably, many were disappointed – so the organising committee implemented a ‘second chance’ system for those who had failed to secure tickets first time around. And surprise surprise – it didn’t work.  Although 90% of those who applied on the first day of ‘second chance’ bidding were successful in buying tickets, some 15,000 people who thought that they had secured tickets instead received emails yesterday morning – telling them that their applications had NOT succeeded after all.

That there were problems with the ‘second chance’ system was hardly surprising, given the transaction volumes that it had to deal with. But where the Olympic organisers – known by the snappy acronym ‘LOCOG’ – really failed in this whole endeavour was in communicating the news so dreadfully.

Rather than put the ‘bad news’ emails on hold until a solution had been developed, LOCOG sent out messages that essentially said: “we’re working on it and we’ll be in touch.”  What’s more, the emails were sent to customers on Sunday morning – when no-one at LOCOG was available to take calls or answer questions about the process.  Were they perhaps trying to ‘bury’ the bad news?

Handled properly, the episode could have been turned to LOCOG’s advantage.  It’s almost certain that the 15,000 disappointed punters (of whom I confess I am one) will eventually end up with tickets – and perhaps even better ones than we had expected.  So why on earth didn’t LOCOG wait until they were communicating a solution rather than a problem?

Lessons for professional firms

Even those of us whose jobs do not require us to organise multi-billion dollar sporting events have to deal with unexpected ‘bumps in the road’ from time to time.  The loss of a strategic client to a rival firm.  A delay in delivery of a significant, high profile project.  The unexpected resignation of a key partner, or even the departure of a whole team.  But how many of us have developed communications protocols that can be quickly and smoothly implemented when something does go wrong?  How many of us have trained our colleagues in how to respond when a crisis arises, or in how to communicate bad news to a client in a way that neutralises a negative situation?

It is often said that the quality of an organisation is judged not by how it performs when things are going smoothly, but how it responds when things go wrong.  The key is, of course, that the work that needs to be done to respond effectively to unexpected problems needs to be done in advance – when those problems seem remote and unlikely contingencies, and few internal ‘clients’ really wants to spend time considering them.  But unless we want our firms to make the same mistakes that LOCOG has contrived to make this weekend, there really is no alternative: crisis communications planning has to go down on the to-do list – sooner rather than later.

Now, has anyone got any Olympic tickets for sale?

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Social media use in professional firms

There’s probably no topic more likely to stir up debate among professional services marketers right now than social media – judging at least by the number of webinars, round table discussions and other events that we all seem to find ourselves invited to.

However, while there is no lack of social media ‘experts’ out in the market, all very keen to advise firms on how to maximise return on these new communication channels, it seems that there is a dearth of baseline information about how firms are actually using social media, and the benefits (and risks) that they are encountering.

I have created a ten-minute online questionnaire on the topic, looking at five key areas:

  • The perceived value of social media for professional firms
  • Objectives for engagement in social media
  • Current usage of social media (including data on specific platforms)
  • Return on investment in social media
  • Social media policy

The objective is to give firms an understanding of what their peers are up to in social media, and potentially to identify trends in usage that all of us will find useful in developing future plans.

If you would like to take part in the survey, please provide your details in the form below and I will  send you a link to the questionnaire. I will then analyse the results and circulate them to participants – also publishing highlights of the findings here and in various LinkedIn groups.

Please note that the suvey is aimed at end users of social media – i.e. professional firms themselves – rather than at social media consultants, trainers or other service providers.  That said, any comments or suggestions from members of the latter category would be warmly welcomed.

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