Today, most firms realize the importance of marketing and are more than willing to invest in various activities to drive growth. In accounting, this anxious desire to jump in and "do something" often leads to opportunistic growth, in directions unintended by firm leadership.In this article, we'll focus on the key elements of marketing that will drive your firm's strategic growth and profitability. These are commonly referred to as the Five Ps of Marketing, and are listed below in my suggested priority order.
When you study marketing in school, you may not learn about positioning - the forgotten, but most important, P in my book. When you create or refine your firm's positioning, you define the very essence of your firm, including the following elements:
* Mission: This explains why your firm exists and the difference it makes for others. (It's not a listing of services or a geographic and historical rundown of your firm's background - those can come later!)
* Vision: This is your leadership team's "dream" for the future of your firm. Your vision should be a stretch for your firm, and exciting and challenging to consider. When you define your vision, consider the size you want to be, the services you'd like to offer and how you envision your firm being led three to five years from now.
When you document your vision, it should be written in a measurable way, so that you (and others) will be able to clearly tell when you've achieved it.
* Values: Sometimes called your guiding principles, your values are your most important ideals, and are things for which you are willing to be held accountable. In another article, we will explore the importance of your firm's values and how to establish and then live them.
* Core competencies: These represent your firm's genuine strengths, areas of specialty or expert ability, and the things for which you are known.
* Competitive differentiators: Differentiators are value-based advantages that set you apart from other firms, and cause prospective clients and employee candidates to choose you over others.
* Market positioning: This is how you want your firm and its services to be perceived or positioned. Based upon your firm's competitive landscape and core competencies, your leadership team must determine the best positioning - whether you want to be known as the "low-cost leader" (Wal-mart's strategy), the "high-value provider" (the Nordstrom model), or something in between.
Defining these important positioning elements is critical before undertaking any marketing activities. Without them, your clients, prospects, team members and prospective employees will be "fuzzy" about what you stand for, where you're headed, what they can expect when they work with you, or why you're different, which can lead to a desire to work with someone else whose positioning is clear and compelling.
Gaining clarity around your positioning will also unify your team and drive it forward. Because of its importance, developing your firm's positioning is not a task to be delegated to a marketing professional; it is one that must include the active participation and buy-in of all of your firm's leaders.
PRODUCT AND SERVICE MIX
If you're like most firms, you are pretty good at listing the products and services you offer. But do you stop to examine and refine them each year? Evaluate the strengths, weaknesses, opportunities and threats for your firm's products or services by conducting a SWOT analysis on each one every year.
When you examine each product and service initiative, you should analyze:
* The number of new clients you've added this year;
* The ratio of new business to existing business;
* The number of staff members who can sell and deliver that product or service;
* The number of satisfied clients who are using the service;
* The efficiency and quality of your processes;
* The revenue and profitability you derive from each;
* The number of prospects in your client base and community for that product or service; and,
* The activities occurring within your community or with competitors that may make selling or delivering the product or service easy or difficult.
Once you've conducted an honest SWOT analysis for each initiative, consider which should be placed on your firm's front burner for marketing investment (hint: those with a lot of strengths and opportunities) and which should be back-burnered for the time being. This will help you prioritize your marketing investments.
Choose the "place" where you'll sell your services, which is really identifying your ideal target client communities. Define the ideal target client for each product or service that your firm puts on the front burners by determining the size (by revenue, number of employees or personal wealth) and type (industry, age, cultural background) of the clients that you'd like to serve for each initiative.
To gain clarity, reflect on which of your current clients you consider to be the "best" in each service area, as they are likely to be the type of clients that you want to attract. When you're defining place, also consider where you will find these ideal target client prospects by considering your existing clients, and also trade publications, conferences and associations to which they may subscribe or belong.
Pricing warrants an article of its own! That said, when developing your firm's marketing strategy, you have to give real consideration to how you're pricing your products and services. Various methods for defining your firm's pricing include:
* Cost-plus pricing: This is where you establish your fees based upon the cost you incur to deliver the product or service. For instance, many firms base their billing rates upon a multiple of each staff person's cost. They then price engagements based upon the number of hours that they feel the job will take to produce. IT firms often establish product pricing based on a mark-up of their cost to purchase the product.
If you are still committed to this pricing method, consider the impact that the resource shortage and the increase in compliance, regulation and complexity could have on rates. Explore benchmark surveys to better understand what other firms of your size in similar geographies are charging (the American Institute of CPAs PCPS MAP Survey and the Information Technology Alliance are good resources for this information for most small accounting or IT firms). In many instances, we're discovering that our cost-based clients have room to increase fees.
* Value-based pricing: This is harder to define initially, but it is essentially pricing your products or services based upon the perceived or projected value of the difference that the product or service will make for the client. The price is not tied to your cost to produce the service, but instead to the value it offers to the client. When working to derive the value, consider factors like the client's savings as a result of the service, what they gain when they use it and the availability of that particular product or service in the market. Ron Baker is the value-pricing guru, and if you're exploring this pricing strategy, you'll want to read his Professional's Guide to Value Pricing.
Another element of pricing to consider is packaging. Do you sell your services individually, or do you offer a number of services together as a package or bundle? For example, you may want to consider packaging some of your most frequently used small-business services - payroll processing, tax filing, bookkeeping and financial statement preparation - as a Small Business Services Package, and, instead of pricing each service individually, pricing the services as a bundle, so that the client can easily understand the services and the value that they will receive.
Whatever pricing and packaging strategies you use, be sure that they are in line with your firm's intended market positioning, and consistent and standardized among all your firm's sellers to minimize confusion and maximize profitability.
Only after the other four Ps have been defined will you be ready to define your firm's promotional activities. Sadly, most firms start their marketing planning with this P instead of ending with it - and we believe that these firms experience less success than others.
When defining your firm's promotional plan, you will consider the plethora of branding and lead-generation activities available to you, including
Web site and brochure investments, sponsorships, advertising, public relations, networking, alliance development, trade conferences, seminars, client roundtables and conferences, direct mail, surveying, and teleprospecting.
Be sure that your plan includes a blend of promotional activities that will reach your target audiences with your firm's positioning "message," and that you are investing in marketing activities that include your four key audiences: your internal leaders and staff, existing clients, prospective clients and referral sources.
You should track your activities in a marketing calendar to easily see what you have planned and when. Be sure that your promotional plan anticipates activities occurring throughout the year. Use your marketing calendar to measure the outcome of your activities, and make changes along the way to focus future plans on those that produce real results.
When you build your firm's marketing plan around the Five Ps in this order, your promotional activities will support your strategy, instead of "accidentally" creating it. Follow this roadmap and you will achieve your firm's growth goals like never before.
Jennifer Wilson is the co-founder and owner of ConvergenceCoaching LLC (www.convergencecoaching.com), a leadership and marketing consulting and coaching firm that specializes in helping CPA and IT firms.
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