Adapting to change: marketers in 2013

Alastair Beddow finds the results of the latest MPF/PM Forum and Meridian West benchmarking study reveal marketers in professional services firms making client relationships their strategic focus.

Although clients always have been – and will continue to be – king for professional services firms, the dynamic of the client-adviser relationship has fundamentally shifted in recent years. The 38 UK Heads of Marketing who responded to the latest MPF/PM Forum and Meridian West benchmark are at the forefront of managing this shift. As in the natural world, they need to adapt to prosper in a changing landscape.

Marketers’ preparedness to reinvigorate their firm’s relationships with clients is one measure of success. It is heartening that two-thirds (66%) of respondents rate their ability to shape their firm’s attitudes towards clients as either good or very good. However, the challenges ahead remain significant: clients are demanding a greater consistency of service and are seeking more added-value services but want to pay less for them. How are the UK’s leading professional services marketers addressing these challenges? And how are they being supported by the rest of the business? The results of our benchmark provide a snapshot of the state of professional services marketing in 2013.

Status of marketers is growing

Given the importance to firms of understanding the needs and drivers of clients, it should be no surprise that the marketing and business development function is gaining in status. This is reflected in the 45% of respondents who say being a voting member of either the Board or Management Committee is important for the most senior marketer to effectively carry out their role. This puts marketing – and, by extension, the voice of the client – at the heart of strategic decision-making.

The growing influence of marketers is also felt by two thirds (66%) of respondents who feel they are treated as an equal by their firm’s CEO or managing partner. Only 8% say they feel subordinate to their peers in the C-suite.

Developing a wide-ranging skill set

As marketers grow in status and influence, they need to be equipped with the right skills to carry out their role effectively. Almost all of the 38 respondents are university educated and nearly two-thirds (63%) have a specialist qualification such as CIM. Yet only four of the 38 have an MBA or equivalent. Given the pressure from clients for advisory firms to be more commercial, it will be essential for marketers to develop a wider appreciation of the changing business landscape and how this impacts on clients’ needs.

Softer skills are incredibly important too. Marketers say the three most important attributes for effectively executing their role are communication, strategy and collaboration (see box below). At a time of such change for professional services, the ability to effectively articulate new approaches to deepening client relationships (both within the business, and directly to clients) rise to the top of the agenda for marketing and business development professionals. Yet this area is currently one of the biggest weaknesses: over a third (34%) describe their ability to ensure fee-earners understand client strategies and business plans as poor or average.

These soft skills help marketers develop meaningful relationships with internal and external clients, but our benchmark suggests marketers are missing opportunities to put them into practice. Over one in five (21%) say they never develop direct relationships with their equivalents at client businesses. How often do you meet the CMO of a client organisation for coffee? Our research suggests this is simple, yet impactful. Regular C-suite conversations focusing on sector insights and trends, and orchestrating learning networks, emerge as strongly beneficial in Effective Client-Adviser Relationships 2012, a study published by the Financial Times, MPF and Meridian West.

Opportunities on the horizon: embedding the voice of the client

One of the most significant opportunities for marketing and business development colleagues will be to embed the voice of the client deeper into the fabric of the firm to foster more sustainable adviser-client relationships. It is encouraging to see twothirds (66%) of marketers say they are directly involved in measuring client satisfaction and feedback. The greatest challenge is making sure client feedback is acted-upon so that it translates into tangible improvements for clients. Respondents recognise there is more to do in this area: over half (53%) describe their firm’s ability to link employee reward to personal contribution as somewhere between average and very poor.

Focussing efforts on this area over the months ahead will pay dividends. The importance of understanding the drivers of client relationships is validated by Effective Client-Adviser Relationships, in which 93% and 87% of clients describe account planning and regular client feedback, respectively, as beneficial for improving the quality of their relationships with advisers. Account planning and client feedback are mechanisms for empowering both firm and client to shape the future direction of their relationship, and are proven to enhance client loyalty.

Another opportunity will come from linking up with other functional areas such as HR or finance. Marketers recognise that collaboration is a key skill, but how often do you co-sponsor client initiatives with HR or finance colleagues? Building internal networks and sharing information to triangulate client feedback with financial analytics and employee engagements provides incredibly powerful insight about client-adviser relationships. It enables firms to enhance the profitability of client assignments and ensure fee-earners supported in the right way to add real value.

The challenges ahead: marketers breaking out of their comfort zone

As an increasing number of senior marketers take their place around the board table, others in the management team will expect marketers to prove their worth on a number of strategic issues. In some instances this will require a break away from the comfort zone: the respondents to our benchmark say they are most frequently involved in taking strategic decisions about corporate identity (92%) and targeting new client sectors (72%). However, marketers will need to demonstrate they have a vital contribution to the following strategic decisions:

• Developing new products and service lines. Only 45% of marketers say they are involved in strategic decisions about new products and service lines. Successful new products or services should align with the needs of clients and differentiate from competitors – marketing is well-placed to offer these insights.
• Mergers & acquisitions. Ongoing consolidation, particularly in the legal and accountancy sectors, impacts on brand and client experience. These are core focuses for marketing, so why do 55% say they are never involved in strategic M&A decisions?
• Priorities for investment. With finite resources firms need to prioritise investments in systems to those which will have most impact on clients. More can be done here: three-quarters (74%) of marketers say they are only sometimes involved in these conversations.

Positive outlook for the year ahead

Our benchmark highlights shared opportunities and challenges ahead for professional services marketers. These must be embraced within the context of an uncertain economic environment where budgets are squeezed. One in six (16%) will see their marketing budget cut over the next 12 months, and over a third (37%) will see their marketing budget frozen (ie. a real terms cut). The average increase is less than 1% (see box above). Headcount will remain static at over half of the firms we benchmarked (55%) and 18% say jobs will be lost from the marketing team.

According to our benchmark average marketing and business development spend is 2.1% of the firm’s total revenue, ranging from less than 1.0% to the highest spend ratio of 4.5% of total revenue. Those marketers who deploy these resources efficiently and imaginatively to strengthen their firm’s client relationships will reap the biggest benefits.

Alastair Beddow is a senior consultant at Meridian West. He works with professional services and financial services firms to develop and implement client-centric strategic and thought leadership campaigns. Contact abeddow@meridianwest.co.uk