Marketing - Better marketing: better margin

There are a number of realistic, practical and sensible actions that managing partners can set in motion to improve a firm's marketing function, says Laurie Young.

It is surprising that, in such a numerate profession, so many first-rate firms have such a fluid, ill-disciplined approach to marketing, sales and income generation. Even in some of the world's most famous practices, the management of these functions is so relaxed that partnerships are, by comparison with many of the businesses they advise, throwing their money away.

This may be because the governance of private practices is so very different from public companies or the typical family business. As partners consider themselves mutual owners of the firm, gaining consensus among them can be so absorbing that leaders rarely get to the 'important, but not vital' issues - which marketing activities so often are. If basic marketing administration is acceptable, and if income flows in, consideration of the function can be very low down on leaders' priorities. Nevertheless, there are a number of realistic, practical and sensible actions that managing partners can set in motion to improve this function. In many circumstances it is possible to promise partners both more revenue and less cost.

Numeric analysis

Effective utilisation depends on the amount of down-time for items like illness, training and administration. Included in these non-chargeable categories is the time taken for 'marketing' or 'business development' by practitioners to build their practice. This can range from an informal lunch with a client, through more formal events like professional seminars, to the enormous effort involved in creating 'thought leadership'.

Yet practitioners spend time on both good marketing (talking to clients for example) and inappropriate marketing more profitably left to support staff (like personally writing invitations to events). So, a first step toward greater effectiveness is a clear, numeric understanding of these non-chargeable hours. They need to be defined in unambiguous terms so that the whole practice records the appropriate income generation hours in these 'marketing' time codes. It is then essential to reach a consensus among the partnership that continuing to record these figures accurately is important to the practice's profitability. This is helped if the time spent on inappropriate marketing is calculated and converted into retail rates. Partners will often be horrified at the enormous opportunity costs. Once the information is reasonably reliable, sensible plans can then be laid to, for example, ensure that cheaper support staff undertake some activities, redeeming time for practitioners to spend on client work.

Pet projects

Every industry develops habits by which it generates revenue. The cosmetics industry, for example, relies heavily on celebrity. In the professional service industry it is the extensive use of client hospitality. Now clearly the opportunity to spend time with clients in informal settings allows trust to develop, which leads on to work. There are, though, a number of difficulties with hospitality. For instance, real decision-makers find it increasingly hard to find time for these sort of activities and tend to turn up to only one or two a year. (Many prefer to spend what free time they have with their own family.) So invites can be delegated down to low level people or they might drop out at the last moment. As a result, a number of practices spend more time entertaining their own staff than they would want. There are similar difficulties with paying to speak at conferences or for adverts next to articles in contract publishing magazines. It needs shrewd judgment and experience to select those activities that actually influence clients to give the practice work, but weaning partners off long-standing pet projects can release substantial funds for other uses.


Quite often a partner with no marketing orientation or training is put in charge of this function because they are a voice to the leadership for a certain group of, otherwise unrepresented, partners. Or client service staff may be moved into it because they are ineffective, but can't be laid off. (Marketing groups in British professional practices contain more than one practitioner who has failed professional exams, become alcohol-dependent or had a torrid affair with someone powerful.) If the firm's market position and income flow is secure, this causes little real damage. In fact, knowledge of accounting, client experience and common sense can be really useful in these support functions.

Yet there is complexity and technique behind marketing and business development which can improve the effectiveness of the practice's income generation if harnessed effectively. Although marketing concepts became famous in consumer product markets, there are now a number of substantiated approaches that are relevant to first-rate service businesses and it is possible to recruit good marketing people trained in them. There is difficulty, though, in introducing them to a practice. Partners might simply be too busy or too prejudiced to spend the necessary time. Meanwhile the specialists themselves might not be used to the professional environment and might not communicate effectively. They need help to acclimatise. Those who succeed seem to progress through several clear steps.

First, any new practice marketer should be expected to handle practical activities well. These will frequently be ad hoc ideas initiated by partners between client projects. Some will not have been properly planned and some suppliers will not be providing competitively priced work. A good practice marketer can tackle these issues and find cost savings. They can then shape a coherent programme that has a cumulative impact, increasing leads and referrals. Through this, the best marketers win respect and become advisers on market-related issues. But, to succeed, they need good consultative skills; to treat their partner group like clients; and strong political backing. Evidence from several professions suggests that this approach generates revenue more cost effectively.


Marketing resource in professional service firms tends to grow in an ad hoc way. Over time, partners will recruit specialist staff, or promote a secretary, or use client service staff to grow their own practice. As a result, there can be a range of disparately skilled people conducting projects with no clarity or common purpose. Some may be little more than, what one managing partner called, 'party planners' and even the best may not know what others in the same firm are doing. If they are unqualified and poorly directed, wheels get reinvented regularly and even duplicated. One major firm found, for example, that two of its constituent parts were about to invite the same clients to different events on the same subject.

If the elements of the marketing and business development function are drawn together into a more rational structure, real savings can be made. The organisational shape depicted below reflects the thinking among several leading firms. There is a separation between practice marketers (who directly interface with partners) and marketing services specialists. The latter are grouped into a firm-wide shared service to optimise effectiveness, budgets and supplier management.

Clever stuff

Structuring marketing and business development activities around the way the business develops can improve revenue, maintain margins and keep costs under control. Practices grow mainly from the reputation that partners create through good work. If clients are pleased, they talk to others and work comes in through repeat business and referrals, depicted as the virtuous circle in the diagram below. Any marketing activities must plug into this dynamic by measuring the competitive reputation of the practice and choosing marketing activities that amplify that natural reputation (if possible turning it into a brand). This will tend to keep cost-of-sale down (because clients come to the firm) and prices high (because they are a consequence, not the focus, of discussion). The reverse is also true. If the practice 'goes out to sell', cost of sale will go up and price will go down. So there is a direct link between 'approach to market', conduct of marketing activities and healthy margins.

There are, then, grubby, real-world issues that affect the ability of marketing and business development activities to generate work effectively and to contribute to cost-of-sale. Practice management can put in place sensible and practical programmes to ensure this function contributes properly to partnership profit. If the function has not received real attention, it should be possible to offer colleagues the chance to increase income and, at the same time, reduce costs.

In addition to having been global marketing partner for the advisory division of Pricewaterhouse-Coopers, Laurie Young has founded, built and sold a practice.

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