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Effective Marketing for Professional Services

19th Jun 2020 | Professional Services

Not very many years ago, professionals could count on their reputations and country club contacts to obtain a steady stream of clients or patients. Today, though, lawyers, accountants, management consultants, architects, engineers, dentists, doctors, and other professionals must do extensive marketing to maintain and build their practices.

Several developments during the last few years have accelerated this trend, among them the following:

1. Legal sanctions. Several highly publicized court cases have opened the door to such previously banned marketing tools as advertising.

2. Too many professionals. Law, architecture, dentistry, and other professions have become overcrowded and their members must increasingly compete for customers.

3. A declining public image. In an era of consumerism and malpractice suits, professionals are no longer on a pedestal. This condition has made it necessary—and, ironically, more acceptable—for professionals to use marketing to enhance their public images and to improve their clients’ and patients’ satisfaction.

These developments are pushing numerous professional service firms into the marketing arena.

Professionals of all types now aggressively use marketing tools. For example, many newspapers, magazines, and Yellow Pages directories are filled with advertisements for lawyers, dentists, optometrists, and accountants. At the same time, storefront legal, dental, and tax-preparation clinics have become accepted as part of the suburban shopping center scene. Furthermore, newsletters, press releases, and other public relations tools are widely used by accounting, law, architectural, engineering, and management consulting firms. And, in a less visible way, professional service firms of all types and sizes are employing marketing research and strategic planning with increasing frequency.

As competition intensifies, many professionals are discovering the limits of conventional marketing wisdom. They are finding that marketing concepts and approaches employed by organizations selling toothpaste, cereal, and other tangible products, or even other types of services, aren’t readily transferred to professional services. Indeed, marketing such services is different.
This article reviews seven marketing challenges that confront professional providers more frequently and affect them more intensely than they do the marketers of goods and nonprofessional services. These challenges, which I have isolated through extensive interviews and discussions with a diverse group of professional service marketing practitioners, are:

1. Strict ethical and legal constraints.

2. Buyer uncertainty.

3. Need to be perceived as having experience.

4. Limited differentiability.

5. Immeasurable benefits of advertising.

6. Converting “doers” into “sellers.”

7. Allocating time for marketing.
The first five challenges have to do mainly with the selection of marketing strategies and tactics. The last two challenges primarily affect how such firms organize and staff for marketing. In the following pages I describe each challenge and offer suggestions for resolving it.

1. Strict Ethical & Legal Constraints
While constraints on marketing have loosened enormously of late, there are still a host of ethical and legal restraints that require careful attention. They are enforced by national, state, and local professional societies, certification boards, government agencies, and other bodies.

Marketers of goods and commercial services are mostly free to sugarcoat, soup up, or scale down their offerings to please customers, as long as they obey health and safety regulations. Enough leeway exists to allow many desired but potentially harmful offerings like cigarettes to be marketed aggressively.

But ethics and standards discourage professional firms from knowingly marketing services which, while “pleasing customers,” might mislead or eventually harm customers or third parties. Thus, lawyers usually avoid claiming they can win certain types of suits and editorial consultants tend not to guarantee their ability to get articles placed in specific publications. Moreover, CPAs typically resist any client pressures to overlook financial irregularities. Such activities would not only hurt the interests of clients or patients, of course, but they could also lead to formal complaints from third parties like investors and insurance companies, loss of licenses or certifications, and financial ruin.

How far to go to please clients and patients is a question that professionals will likely face more often as competition intensifies. The temptation to make ethical compromises will grow as unscrupulous practitioners prosper. As the managing partner of a medium-sized CPA firm remarked, “Ethics are only for people who have enough clients.”

But ethical compromises must be resisted. Unlike a big consumer product company that is suddenly discovered to be marketing a dangerous product, a professional service firm cannot simply drop the harmful product and wait for the storm to pass. The professional organization that is guilty of providing unethical or even illegal forms of “customer satisfaction” may face problems. Smaller localized firms, in particular, may become targets of bad-mouthing by opportunistic competitors or by angry ex-clients or ex-patients. Though large national firms are less likely to suffer in this way, their misconduct can damage the reputation of their entire profession.

The professional service firm can take several steps to ensure that its marketing activities stay within ethical and legal boundaries. First, it can participate in peer review and self-regulation programs. A self-initiated program (supported by capable legal counsel) can help not only to avoid legal and ethical difficulties but also to deal with the thorny problem of maintaining quality control.

Professional organizations can, in addition, make a commitment to educate clients or patients about what constitutes acceptable professional behavior. Sometimes people ask for ethical compromises simply because they do not know any better. An explanation of how and why services are being performed in certain ways can help to limit inappropriate requests and to build trust and avoid misunderstandings between practitioners and the people they serve. As author Norman Cousins recently remarked to a group of medical school graduates, “Doctors who spend more time with their patients may have to spend less money on malpractice insurance policies.”1
Finally, certain firms can become more selective in accepting customers. Clients or patients who are especially demanding or who seem likely to complain excessively can be dropped or avoided. Some CPA firms are increasingly refusing to work with clients whose companies face serious financial difficulties.2 Such weeding out should be aimed at unethical clients or patients, however, to avoid public complaints (that could lead to restrictive legislation) from those who are legitimately too poor, too troubled, or too ill to obtain competent professional assistance.

2. Buyer Uncertainty
Professional services are what economists sometimes call “credence” goods, in that purchasers must place great faith in those who sell the services. Professional services usually lack many attributes that a buyer can confidently and competently evaluate before—or even after—making a purchase decision.

When consumers buy a new sofa, they can sit on it, touch it, and compare prices before making a decision. Or after eating in a restaurant, the experience itself is usually enough to tell diners whether they are happy with their meal and would return.

Most people are ignorant of professional services and timid when they have to use them. Often they are unsure if they have to use one. Even if they recognize their need for help, they may entertain wrong ideas about what the service should cost and what the professional can reasonably be expected to do for them. Finally, they may not know where or how to get the facts for making a better-informed choice.

Even when customers can find out what they need to know, they may still lack the technical skills necessary to assess how important in terms of performance it is for professionals to have certain credentials, experience levels, or pieces of equipment (and the skills necessary to use that equipment). Moreover, uncertainty often continues after the service has been rendered, since laymen are generally unable to determine whether a case was pleaded properly, an audit done thoroughly, a building designed safely, or a surgical procedure handled competently. Frequently, the service has failed to meet their exaggerated expectations, which leads to dissatisfaction and damaging word-of-mouth criticism.

The widespread buyer uncertainty is a basic marketing issue for providers of professional services. Such services must emphasize education rather than persuasion in their marketing.

The professional service organization should design its personal contacts, PR activities, advertising, and service delivery approaches to teach clients or patients about the following:

When they should seek professional services.

Which attributes to consider in evaluating different providers.

How to communicate their concerns, desires, or other issues to professionals.

What they can realistically expect providers to accomplish.

Teaching these things to prospective and current customers will reduce buyer uncertainty while increasing buyer loyalty. The executive director of a major architectural firm expressed the objective this way: “You’re selling a feeling of comfort with you and an understanding of clients’ problems and anxieties.”
Two increasingly popular choices for educating and “comforting” buyers are seminars and newsletters. For example, the Baltimore CPA firm of Kamanitz, Freiman, and Uhlfelder has developed and is conducting comfort-enhancing seminars designed to acquaint clients’ spouses with tax, financial, and estate planning.3

Professional organizations’ newsletters have become widespread and their topics are quite diverse. The Big 8 CPA firms all publish both general and specialized newsletters (e.g., Coopers and Lybrand’s Executive Alert Newsletter and Touche Ross’s Private Companies Review). And many smaller CPA firms as well as other practitioners publish their own newsletters or make use of newsletter preparation services, which provide original stories and artwork. The firm simply adds its name to the masthead.

3. Need to Be Perceived as Having Experience
Because buyers of professional services are often uncertain about the criteria to use in selecting a professional, they tend to focus on one question: Have you done it before? People prefer to use accountants and management consultants who have worked in their industry previously, lawyers who have litigated cases just like theirs, architects who have designed buildings like the one they want to build, and surgeons who have performed the needed surgical procedure hundreds of times. Using an experienced professional makes a risky purchase seem less risky. Among other things, if anything goes wrong, a buyer may avoid being blamed by superiors or family members for carelessly choosing an unproven professional.

Even sophisticated buyers—such as in-house legal counsel, controllers, or resident architects—place a premium on experience. For instance, in-house corporate lawyers have become increasingly inclined to seek out specialized firms to handle sophisticated legal matters.

This experience requirement creates problems for many professional service organizations. Firms with expertise in limited areas often have difficulty diversifying into new lines of work. And inexperienced professionals often find it difficult to find any work at all. “Newness” in the professions isn’t nearly as favorable an attribute as it might be for a soft drink company or an airline.

This situation tends to push professional service organizations toward specialization as they discover that they can best maintain or increase business by offering a limited set of services (that they have provided many times before) to a limited market. This discovery, particularly in intensely competitive markets, has led to some interesting specialties:

  • A CPA firm in Washington, D.C. that specializes in serving law firms.
  • A Minneapolis law firm that specializes in handling liability suits filed against A.H. Robins Company, Inc., the manufacturer of the ill-fated intrauterine birth-control device known as the Dalkon shield. As of 1981 the firm had handled more than 900 cases.
  • A national management consulting firm that specializes in serving what it privately labels “pussycats.” These are small- to medium-sized companies that have rather unsophisticated managers and unfocused consulting needs.
    Pussycats are distinguished from “bulldogs” (which are small- to medium-sized companies with sophisticated managers seeking specialized consulting help), “tigers” (which are like bulldogs, only bigger), and “elephants” (which are like pussycats, only bigger and less numerous).
  • A San Francisco dental practice that specializes in “cosmetic dentistry”—fixing buck teeth, weak chins, large canines, and so on.

To overcome the need for experience to break into a new service or market, a firm has three options:

1. Recruit people possessing the needed experience.

2. Merge or otherwise join forces with a firm that has experience in the service or market.

3. Reduce fees.

All three approaches are widely used. For example, a growing East Coast executive search firm, which was started by a partner with extensive experience in banking and financial services, has been expanded by adding partners with experience in real estate and mortgage banking as well as high technology. This approach has also been used successfully by the Washington, D.C. office of Peat, Marwick, Mitchell, the CPA firm, which began adding banking clients after it transferred in some banking experts from its other offices.4 The approach’s major drawback is that personality conflicts and jealousy can develop when new “star” professionals are given powerful and prominent positions.
Architectural firms, eager to have a presence in new locations to counter concerns about their lack of experience with local politics, weather conditions, or cultural tastes, have employed merging or joint venturing. Merging and joint venturing are also being used by several of the Big 8 CPA firms in concert with Japanese accounting firms in an effort to attract more Japanese business.5

The big risk is that the two organizations may not blend well. For this reason, merger or joint venture agreements must be drawn up with extreme care. Both organizations must try to foresee all possible difficulties.

Perhaps the riskiest way to add new services or invade markets is via charging low fees. This approach can create an image problem if clients or patients think that low fees mean poor quality work. Nevertheless, a young, small firm may have no choice but to take this tack. And more established firms, which have already attained a reputation for doing quality work, can use this approach to crack new markets. For example, several years ago, a few of the Big 8 firms carved out shares of the municipal accounting field by offering to do audits for certain large city governments for as little as $7 per hour.6

The need-for-experience problem makes it especially important for professionals to do marketing research to assess the billings potential of any specialized services they are considering providing. This research should be followed by careful analysis and planning to direct the organization toward a specialty or a mix of specialities that will allow its experts to pursue professionally and financially rewarding careers.

4. Limited Differentiability
The differentiation of products and services is hard for most marketers to achieve, but it is an especially difficult task for marketers of professional services. How do they distinguish their products from those of competitors, especially when many professional services are virtually indistinguishable? Differentiating one accounting audit, title search, or eye examination from another is very difficult. The situation is quite different from consumer products like breakfast cereals, which can be differentiated by simply sprinkling on a new coating, stamping out a new shape, or putting a famous cartoon character on the package.

Many professionals have recently attempted to differentiate their services by using humorous slogans or advertising appeals. Dentists claim they “cater to cowards” and lawyers advertise “no frill wills.” Others have tried to stand out by using clever labels for their services, such as TRAP (Touche Ross Audit Process) and STAR (Deloitte, Haskins and Sells’s Statistical Techniques for Analytic Review).7 But such tactics may not be enough.

One useful approach is to conduct research on the attributes clients or patients think make a particular professional service different from and more attractive than competitors’. The practitioner can then seek to establish itself as a possessor of the desired attributes. It should develop and communicate a distinctive personality or image for itself, which appeals to both its professionals and the people it wants to serve.

Professional service firms can emphasize three attributes or personality features to set themselves apart: “gray hair” (more experience, specialization, credibility, and contacts), more brains (better solutions to problems), and superior procedures.8 To emphasize superior procedures, professionals report finding it useful to possess and promote such service features as:
Personal involvement in cases or projects by high-level professionals.

Easy access to services.

On-time completion of work.

The use of state-of-the-art support equipment like computers, communications systems, and testing devices.

Easy-to-understand reports, presentations, and invoices (i.e., “We talk your language”).

Frequent follow-up contacts to ensure satisfaction.

5. Immeasurable Benefits of Advertising
Advertising is generally a very useful tool for helping an organization differentiate and sell its offerings. For professional service organizations, though, it has limitations. Managers should consider carefully the possibility that advertising can backfire. People still are unused to seeing or hearing advertising for many professional services, and they may not like it. Clients, patients, referral sources, and even competitors could interpret advertising by a firm as suggesting that it lacks competence. (“If the firm is so good, it shouldn’t need to advertise.”)

Even if the advertising seems to be acceptable, it may still not be worth the expense. Professionals typically need to reach a very narrow audience, which will notice advertisements only at the very infrequent times it needs the service and which requires complicated explanations of the service; more cost-effective are personal selling, seminars, or other promotional approaches.

Most professional service organizations legitimately fear results from advertising such as those obtained by the Boston law firm of Springer and Langson, which went bankrupt after spending $300,000 in a few months to advertise the services of its 28 lawyers. Robert Springer’s reaction was, “Maybe in 10, 15, or 20 years people will be able to accept this as a way of life and not look down on firms that do advertise… It’s an expensive procedure with high overhead.”9

Despite the dangers, more professionals of all types, including an estimated 14% of the nation’s law practices, are advertising.10 And several success stories have emerged. The San Francisco CPA firm of Siegel, Sugarman, and Seput, for example, was reported to have grown from three partners and $8,000 in billings in 1977 to 27 people and $1.75 million in billings in 1981, using advertising as its only business development tool.11 Similarly, the California law firm of Jacoby and Meyers reportedly grew from 7 to 22 legal clinics in one year through the use of extensive television advertising.12 The Michael Baker Corporation, an engineering firm, reportedly used extensive advertising in coal industry publications to grow from near-zero to more than $5 million in billings in that industry between 1977 and 1981.13

For many professional service organizations, the most logical way to approach advertising will be closer to the techniques of the Michael Baker Corporation than to those of Springer and Langson. Identifying a target audience that can be reached with low-cost advertising in specialized publications is generally a useful way to become familiar with the benefits and drawbacks of advertising. Careful monitoring of the results of this approach—by tracking such areas as the number of inquiries received and the receptivity of clients to sales calls—should allow an organization to fine-tune its advertising program. This cautious, “experimental” approach to advertising can work well and avoids the risks of Springer and Langson’s “big splash” approach.

6. Converting “Doers” into “Sellers”
Whether or not advertising is used, personal selling must play a big role in the marketing of any professional service. Traditionally, professional service organizations have left selling almost exclusively in the hands of those senior people who exhibit an interest and a flair for it (“finders”); project management and technical tasks have been left to others (“minders” and “grinders”). But increasingly, these organizations are finding it necessary to get broader participation in selling. Clients and patients generally prefer to be courted by the persons who actually perform the services. Customers usually feel uncomfortable buying from people they will never see again or from officials who only sell.

As Weld Coxe, a management consultant to architects and engineers, has stated, “Clients have demonstrated a clear preference for marketing organizations composed of closer-doers [those who “close” deals or who sell in addition to other work], where the professional making the sale can assure the client that he or she will be personally involved, to a credible degree, during the execution of the project.”14 Similarly, Robert Denney had this reaction to his experience working with accountants:

“One of the fundamental misconceptions many accountants have about marketing is that all of this activity should generate new business without any personal effort on their part. They think someone else can bring in the new clients and then they can take over and do the work. Unfortunately, they’re wrong… It takes an accountant to sell accounting services.”15
The need to have professionals who can both provide services and sell them can put a severe strain on an organization. Many lawyers, accountants, architects, doctors, and other professionals simply do not want to sell on the ground that it is too commercial, too demeaning, and too difficult. An emphasis on selling can demoralize highly competent practitioners, who may choose to seek employment at another firm where they merely have to practice their profession. Moreover, trying to train those people who like the idea of selling will be fruitless if they lack the right background or personality.

Firm managers can take several steps to help overcome this problem. First, they can consider potential selling skills when recruiting and hiring new people. Jerry Sincoff, executive vice president of the large architectural firm of Hellmuth, Obata, and Kassabaum, has argued, “When we all went to school we didn’t learn about personality development; but it is important to have people in the office who can speak about themselves—and the firm—in a fine, clear way.”16 Thus, when all other things are equal—including competence at performing professional tasks—the applicant who exhibits an interest in and a potential for selling well should get the nod.

Second, officials can incorporate a sales training program into staff development programs. They can teach professionals basic selling skills, such as identifying and qualifying leads, stimulating referrals, courting prospects, making presentations, negotiating deals, closing sales, and managing relationships. A variety of such sales training programs are available.

Third, top managements can wholeheartedly encourage selling and make it financially and professionally rewarding. They can ask new professionals to participate in marketing planning and to perform certain selling functions. Some firms have even assigned young professionals to full-time marketing positions (involving much more than selling) for a year or so as a way of persuading them to make a commitment to selling and marketing.

They can also encourage selling by making the reception of certain financial and status rewards dependent on whether selling has been done effectively. Firms can give bonuses, raises, promotions, new offices, and other rewards to those who bring in and help retain valued clients and patients. Of course, these rewards should not be offered just for selling, since excellent performance of other professional duties must also be rewarded.

Many firms have developed weighted-sum formulas to judge the performance of professionals. The businesses give credit for billable hours that a person has sold (for a year or two after the client has been brought in) and for billable hours worked. They then assign weights based on the desirability of each client, the value the firm places on selling versus performing professional tasks, and other factors.

Making more doers into sellers cannot be accomplished without risk. Improving the selling skills of professionals raises the possibility that some will leave the firm and take part of their following with them. In addition, competition for clients or patients among a firm’s professionals might create ill will and reduce cooperation. Finally, there is the risk that too much time will be devoted to selling. This issue is addressed in the next section.

7. Allocating Time for Marketing
Convincing and training professionals to sell is one matter. Determining the amount of time each professional should devote to selling and marketing is a different, but related, matter. Officials must decide how much of the highly profitable time of junior people—which can normally be billed out at much higher multiples of their cost to the firm than the time of senior people—can be spared for marketing. Officials must also decide how much to limit the hours spent on marketing by senior members, who often have opportunities to make speeches, serve on prestigious committees, dine with important contacts, or take other actions that can support the marketing effort. If too many opportunities are pursued, then other important tasks, such as maintaining or improving the quality of services, may be neglected.
The president of a marketing consulting firm describes the problem facing senior members in this way, “There’s never an end to chasing. You’re always torn between working and replacing. You must maintain a delicate balance.” Finding the appropriate balance for both senior and junior professionals is a trial-and-error process for most firms. Those that use formulas to evaluate performance normally experiment with different weighting schemes to see which ones allow sufficient but affordable amounts of time to be spent on marketing. Other organizations may want to try various time-allocation guidelines or policy statements.

No matter what time-allocation scheme a firm finally selects, it can improve the productivity of professionals who are doing marketing. One approach is to hire specialists to do the bulk of the marketing analysis and planning. These marketers can also help professionals perform their necessary selling tasks by regularly sending “tickler” lists to them that contain recommendations about which prospects need to be called, which clients need to be entertained, which referral sources need to be interviewed, and so on.

The support people can furnish professionals with recommended scripts or statements to be used in discussions with clients or patients. For example, one large East Coast engineering firm provides all its engineers with a stack of small printed cards that contain a list of statements and questions that can be used when telephoning prospective clients (on one side) or old clients (on the other side).

Unfortunately, many professional service organizations have had difficulty finding and retaining effective marketing support people. The ideal candidates have both credentials in the relevant profession and a marketing background. Moreover, lawyers, architects, engineers, physicians, and other professionals who have MBAs or similar backgrounds—though growing in number—are hard to find. Thus, it may be necessary to hire people with management marketing backgrounds and then try to help them develop a knowledge of the needs of staff and clients.

The organization must take care to avoid putting these marketing people in what they perceive to be dead-end positions. They should be put on the ladder to partner or principal even though they lack professional credentials.

Besides using marketing support experts, professional firms can mix service provision and marketing and mix pleasure seeking and marketing. Firms don’t lose billable time in using these approaches; rather, they increase billings. The former approach involves taking advantage of opportunities to sell one’s services while actually providing other services. This can often be done in a subtle manner, such as when accounting firms use tax experts on audit teams to give them an opportunity to discuss their more specialized services with clients. Firms can also use this type of cross-selling of services to a degree through the recommendations made by professionals in final reports or closing presentations.

The old technique of mixing pleasure seeking and marketing still has value in today’s more sophisticated marketing environment. Firms can accomplish much by having professionals spend some of their leisure time socializing with prospective and existing clients, patients, or referral sources at restaurants, country clubs, political groups, civic organizations, churches, alumni gatherings, and trade association meetings.

Dealing effectively with the problems cited here will not be easy for most professional service organizations. To be successful in a competitive environment, firms will usually have to make a large commitment of resources to hiring marketing talent, conducting market research, educating clients or patients, training staff members, and developing promotional materials.