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Professional Services

It Was the Best of Times, It Was the Worst of Times. It’s Business as Usual

By Al Hahn

When Sid asked me to write the article, I asked him what he would like me to write about. “Write about a real client experience you have had recently,” he said. OK, here it is. As the title to this article suggests (apologies to Dickens), my clients are all over the map on this score. This surprises me in the current economy.

There is no question that the economy is affecting companies in extraordinary ways. I have been helping many unemployed service marketers to find jobs. Most of them would not even need help in normal times. Generally there is demand for service marketers that is usually not met by the supply of experienced people. Today, however, many need help to find work.

Company financial results are generally down and unemployment is up. This is not a time when you would expect a lot of forward motion and success. Yet when I analyze what many clients are telling me, it seems surprising.

In January, I helped a company pump up their professional services sellers because (while capital equipment sales were way down) they expected good professional services sales this year. Jumping on that particular bandwagon, I am helping another client launch a big expansion in their professional services. In doing some research for that client, I spoke with another company that has seen their professional services do very well, as they are viewed by their customers as essential for surviving this downturn. They do a particularly good job of helping their customers achieve and maintain profitability.

Can Professional Services Deliver 40% Margin in First Year? Diane Sharrock's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Relevant Links Jim has his hands full and is probably a little over-optimistic. But I do think he has a chance of getting to 40% margins. Getting there within a year is the difficult part. His situation may be a familiar one to all of us. Jim has his hands full and is probably a little-over optimistic. But I do think he has a chance of getting to 40% margins. Getting there within a year is the difficult part. His situation may be a familiar one to all of us, where the boss sets a 40% target but would probably be happy with 25%. However, as some of us don’t have much of a choice, Jim must try to hit his target.

Can Professional Services Deliver 40% Margin in First Year? Ken Carnes' Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Relevant Links If Jim can get senior-management support and they are willing to invest in the short run, then he may have a 70% chance to deliver the margin target of 40%. Jim is going to have to migrate to a more leveraged business model and take action on a number of fronts. If Jim can get senior management support and they are willing to invest in the short run, then he may have a 70% chance to deliver the margin target of 40%. Jim is going to have to migrate to a more leveraged business model and take action on a number of important fronts very quickly.

Can Professional Services Deliver 40% Margin in First Year? David Alvarado's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Relevant Links Jim is in no position to commit to such a high-margin target. The most critical pitfall many organizations encounter when entering the professional services field is not having a well-defined scope and a proven methodology. Any services organization must be certain of what it can credibly offer to its customer base without overextending its delivery capabilities.

Can Professional Services Deliver 40% Margin in First Year?

A ServicesRevenue Business Case

Leaving the CEO’s office following his regular one-on-one meeting, Jim Kemper wondered why he didn’t just resign on the spot! He presented what he thought was a good argument for why it is unrealistic for his boss to expect him to deliver 40% margin in year one. As he staggered back to his office, he replayed in his mind the entire meeting and the arguments he just presented. He was hoping he could catch errors he may have missed.

Is Advertising Effective for Marketing Professional Services? Tatiana Svec's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Case Studies or Relevant Links The answer should be “yes”, if: 1) the media is suitable. Since each sector of professional services is very niche, the campaign must be precisely targeted. Context and readership demographics must fit. Potential clients need to be predisposed to buying the advertised service. Example: If you are targeting executives, Forbes magazine may be attractive at first glance, since executives make up the majority of its readership. However, for a specialized service firm, the context is too broad to lock audience into the right frame of mind. Publications by professional associations may work better.

Is Advertising Effective for Marketing Professional Services? Norm Goldring's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Case Studies or Relevant Links Ah, the political issue!  If I were in Jon’s shoes I’d float a few trial balloons to assess my chances for success. I’d try to get the CEO to treat the test expense as a one-off charge.  If my division is the only one that can use the space, I’d have the penalties deducted from my ad cost and charged against the division that’s pulling out. I’d insist on having final approval on ad content and creative approach.  If none of these conditions seem acceptable I’d probably walk away from the opportunity for lack of corporate support.

Is Advertising Effective for Marketing Professional Services? Holly Corwon's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Case Studies or Relevant Links As a marketing manager for a regional CPA and consulting firm, I’ve had to fight long and hard about this issue. Accountants definitely don’t like to spend money without seeing an immediate return, which just isn’t practical for professional services. I certainly wouldn’t consider myself an expert, but can attribute a cultural change towards sales and marketing in our firm to some of the efforts I’ve implemented. Professional services are about relationships. As such, our sales cycle is painfully long making measurement extremely difficult.

Is Advertising Effective for Marketing Professional Services? Elaine Fogel's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Case Studies or Relevant Links If the canceled media buy was with an outlet whose readership is the right target segment, and he can get frequency, then run a test and track results. Without knowing these specifics, Jon should pass on the buy. Jon should be considering direct marketing to his existing client base. I’ve found that we can gain more business from existing customers if only they were aware of the extent of services we offer. They may be purchasing only one service currently and are unaware we offer others - ones they source from other providers. Direct marketing can create top-of-mind reminders allowing us to increase business.

Is Advertising Effective for Marketing Professional Services? David Newson's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Case Studies or Relevant Links Jon should accept the ad offer only if he is able to establish proper expectations with senior management and only if he receives approval to fail. This is an excellent test and a good investment. He’ll have to educate and present them with a well-reasoned argument. There are three possibilities: unqualified success, qualified success, and failure. Criteria must be established to set campaign goals such as changing attitudes or creating awareness. Setting clear criteria for the test is of paramount importance. Jon and his management must also realize this is an investment. Should this test fail, the firm is still enforcing its brand.
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