The results of our fifth annual Marketing Leaders’ Benchmark show that, although client experience remains a top priority, marketers are sharpening their focus and fighting hard for increases to marketing budget and resource, says Alastair Beddow.
Punditry and polling didn’t fare too well in 2016, a year in which received wisdom was turned on its head. At the start of last year, the odds of a Trump presidency or of Britain leaving the EU seemed slim. Even within professional services, very few people predicated the seismic events of the year – a threeway ‘mega merger’ at the top of the legal sector, or the European arm of a billion dollar global law firm on the brink of administration – before they hit the headlines.
How do marketers plan most effectively in these confusing and unpredictable times? To answer that question we have tapped the collective wisdom of professional services marketers through our fifth annual Marketing Leaders’ Benchmark. The results show that, although professional services firms remain in a reasonably bullish mood going into 2017, their aspirations are tempered by trepidation about macroeconomic shocks, and smaller budget increases.
Unsurprisingly, Brexit and its impact looms large on the minds of marketing leaders. When asked about whether the impact of Brexit for their own firm would be net positive or negative in 2017, 44% say the impact will be negative (see chart right). Just 8% believe the net impact will be positive, in spite of the potential advisory opportunities arising for firms as a result of Britain’s EU withdrawal. Tellingly as many as one in five (19%) don’t know how to assess the impact of Brexit for their own firm.
An even bigger concern than Brexit is the threat of lower-cost competitors entering the market, cited by 54% as likely to have a net negative. Lower-cost competitors will not only put a squeeze on price and margins, but are likely to recalibrate clients’ perceptions about value, the role of technology in service delivery and service quality. Any established firms without a clear plan to respond to this threat in 2017 are likely to find themselves under increased pressure.
But marketers believe opportunities also lie ahead. 46% anticipate that technologies such as process automation and artificial intelligence will have a net benefit. The capital investment for these technology innovations might be high, but the consensus suggests that professional firms cannot shy away from embracing new delivery models.
Potential merger activity is also viewed as a broadly positive force for 2017. It is very possible that the year ahead could see more unexpected match-ups in the legal and accountancy sectors that just a few years ago might have been unthinkable. Even within the first weeks of 2017 there have been reports of significant transatlantic and European mergers under active discussion.
Marketers plan to respond to a turbulent external market over the year ahead by keeping their focus firmly on clients. When asked about their priorities for 2017, 73% say they plan to spend more time focusing on improvements to client experience and client service than they did in 2016. Over a fifth (21%) say this will be their number one priority for 2017, on par with findings from our 2016 survey.
A sustained focus on client experience will enable firms to remain as close as possible to the changing concerns and needs of their clients during the politically and economically turbulent year ahead. As one respondent to our Benchmark highlights, providing a more adaptable and agile client experience will help firms to stand out from competitors and meet ambitious growth targets: “Improving our client experience will enable us to create a more consistent service, which is essential to achieving growth and will also allow us to better demonstrate the value of the work we do.”
Other notable priorities for 2017 cited by Benchmark respondents include improving or establishing account management systems (cited by 14% as their number one priority) and refreshing the firm’s brand (12%).
Given client experience has topped the list of priorities for marketers for the past two years, what are the leading professional firms actually planning to do in this area to make improvements? The Benchmark reveals that in 2017:
• 48% have a plan to create a ‘client journey map’ that outlines the touchpoints in the firm’s interaction with clients;
• 42% plan to provide more regular training and development opportunities for staff to improve their client experience skills;
• 34% plan to design joined-up propositions to package their firm’s services and expertise to clients in new ways;
• 31% have a plan to identify target personas and their needs within each of the firm’s client sectors or segments; and
• 23% plan to develop a client charter than articulates the firm service promise to clients.
Taken together, these results show that leading professional firms place greater emphasis on distilling their firm’s client experience into key moments, behaviours and service standards. The foundations of the firm’s client experience can then be articulated both to clients (through a client charter or new cross-firm propositions) and to colleagues (through training and development or a ‘client journey map’ framework).
Firms that take the next step to embed these concepts into practical delivery will be most successful in securing competitive advantage. As one respondent to the Benchmark rightly points out, a focus on clients runs through all aspects of their firm’s operational capabilities: “Client focus is the number one priority for our firm’s three year plan and ten year vision. It anchors our various strategies and tactics from better relationship management, to better use of data and technology.”
Among the firms responding to this year’s Benchmark is a small group of pioneers leading the way on establishing innovation processes to put new ideas about client experience into practice. Given that many firms now acknowledge the strategic imperative to innovate, it is surprising that just 14% have a designated budget for innovation projects and investments, and that only 12% currently have a formalised process for testing or co-creating innovation ideas with clients. The lack of a structured innovation process and investment model will be one of the greatest hurdles for firms to overcome to improve their client experience in 2017 and beyond.
To put any plan into practice requires time, investment and a team equipped with the right skills. It is significant therefore, that the average marketing budget increase anticipated for the year ahead is just +2.0%, down from an average rise of +3.2% in 2016 (see chart above). This is the smallest rise planned since 2013. Projected increases in marketing headcount and salaries are also down year-on-year.
This means that senior marketers will have to work smarter and with greater focus on strategic projects that deliver maximum value to internal stakeholders and help to strengthen their firm’s competitive advantage. It also means that marketing leaders will need to ensure the skills of their team are fit to manage the challenges ahead. Three-quarters (73%) say the most important skill needed by their team for 2017 will be commerciality: an ability to focus on client outcomes and strategic context.
After commerciality the skill most in demand is the ability to influence fee-earners (cited by 56% among the top three most important skills). With one in three senior marketing professionals saying that the leaders of their firm will not typically seek their opinion before taking strategic decisions, the need to close this influence gap, and to demonstrate the strategic impact of greater client focus, has become more important than ever.
Alastair Beddow is a Director at Meridian West. He provides strategic advice and implementation support to help professional firms strengthen their client relationships and better understand their opportunities for growth.