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29 Jun 09
What will marketing in the accountancy sector look like in 2019? CA Magazine and PracticeWEB invited a group of marketing specialists to see how technology is changing business development for professional firms
by Robert Outram
Marketing and business development are as important as they have ever been for professional services firms, but in the current economic conditions marketeers have to fight their corner.
Also, with technology bringing fundamental changes to the world of communications, the way firms communicate with their clients, and the way they deliver services, are already changing. How will all that affect marketing and business development going forward?
Those were the questions up for discussion when CA Magazine and PracticeWEB, specialists in providing websites for professional firms, invited marketing and business development specialists from across the accountancy sector to share their experiences and expectations.
As chairman, PracticeWEB’s Mark Lloydbottom asked the guests: “In 10 years’ time, where will your clients be? Who will they be? How will you reach them and how will you sell to them?”
Henderson Loggie’s Anne Farquharson said: “Firms may need to look at how they communicate with clients and ensure they are providing them with information, at a time and in a format that suits the client’s needs.”
Steve Wright of French Duncan agreed: “Accessibility is the key. I think you’ll also see more importance given to account management, spending time to find out what makes the client tick and what their aspirations are.”
“In 10 years the technology will have advanced, so we have to keep pace with it,” said Mark Mulholland, marketing partner with Alexander Sloan.
However, Mulholland also believed that face-to-face contact would still be critical even in the future. He said:” I personally took a decision to spend a day on the road regularly, with five or six client meetings through the day. The clients have really appreciated it and I have used the opportunity to speak with them about how we can help them.”
PracticeWEB’s Richard Sergeant said: “Timeliness and access to information will be essential. Websites are already moving on, from being merely presentation platforms, to acting as conduits of information between businesses. That will not mean personal relationships will fall by the wayside, however, in fact quite the opposite.”
Jane Gaddie is marketing manager for Scotland and the North of England, with Tenon. She said: “Firms are becoming more sophisticated about marketing. Clients will be looking for accountants to be true advisors, to understand their business more and be part of their business, to advise and guide them.”
In his role at ICAS, Ken McManus helps member firms follow best practice. He argued that the question “Where will your clients be and what will be their demands?” was bound up with another: “What services will you be offering them, and how?”
He added: “I think the answers to those questions will be very different in 10 years’ time, and I also think there will be significant differences in the providers of those services. For example we’ve heard about ‘Tesco law’. It doesn’t take any stretch of the imagination to see Tesco shoppers dropping off their brown paper parcels at the supermarket and having their prepared accounts or tax returns ready to collect next week.”
Social networking sites such as Bebo and Facebook, or the more business-oriented LinkedIn, are increasingly playing a part in marketing and business development. A quick poll of guests at the round table showed that more than half were on LinkedIn, although a much smaller proportion admitted that they used it regularly.
Steve Wright said: “I’m a recent convert to LinkedIn and I have found it interesting; it has led to introductions. But some people use it as a point-scoring exercise and add all their contacts. People can sit behind their computer and say they know these individuals, but they have never met them.”
Chiene & Tait’s Kerry Manton agreed: “It would be a shame if business networking went the same way as social networking like Facebook, with a competition to simply add as many contacts or “friends” as possible.”
She added: “One of the technologies we’re interested in is SMS messaging. Increasingly, communications technology is personal. People are accessing websites on their mobile phones and sales of BlackBerries are going through the roof. People want their lives in their pockets, so we are looking at how we can utilise that form of communication.”
Ken McManus added: “SMS (text) is one of the things that has come up. There are so many ways you can use it for client communication but I get looks of abject horror when I suggest it, even from some of the larger firms, and one thing that comes up is how do we control SMS? How do we record it?
“We have to get a handle on the control elements. A text doesn’t appear on the file and while there are software programs that will do that, most people are ignorant of them. As far as technology is concerned, accountants are not at the leading edge.”
For Adam Hardie, director of business development with Johnston Carmichael, new modes of communication will have an impact on marketing, but, “the business of advising clients fundamentally remains face to face.”
Hardie added: “Clients’ needs are going to change over the next 10 years, with many seeking increasing focus on their business and added value from their accountants and other advisers. To meet this requirement, accountants’ business development skills will need to develop, specifically in areas such as questioning and listening skills, until they are as good at it as the specialists.”
Mark Lloydbottom put the question: “If technology continues to develop, which it will, why shouldn’t I just click a button and send all my accounts to some firm in India? Is it possible and how many clients will do that if they just want to save on costs?”
“Some of our clients want ‘vanilla’ style services and some of them may think about turning to India for that, but not those who want face to face engagement with someone who understands their business,” Adam Hardie said.
Steve Wright agreed: “You are not going to discuss an exit strategy from your business with the guy over in India who does your management accounts.”
Ken McManus argued, however, that the use of technology changes both the nature of the client and the services the firm offers them. “So they come to the professional accountant for the business advisory services, where there is a lot of interaction,” he said, “But not for standard processing services.”
Anne Farquharson said: “It’s not so much about your services or technical knowledge, because clients tend to take these as read, for a firm of chartered accountants. In future, emotion and values will be used more as a means of differentiation.”
Mark Lloydbottom cited examples in the US where large organisations such as American Express had ventured into the accountants’ territory, generally without success, although he added: “Who is to say that yesterday’s failure will also be tomorrow’s failure?”
The conversation turned to client extranets [using the Internet to provide secure communication with a particular client], which, Steve Wright argued, could prove a useful resource.
Ken McManus recalled that he had encountered an early example of the client extranet model back in 2001 with a firm in Australia.
McManus said: “The extranet approach clearly was not suitable for the smaller clients. The firm had to suffer a bit of pain, in terms of income, shedding some clients and getting their larger corporate clients on to the new platform. It was a remarkable turnaround and they used it to redefine the nature of the practice.”
Richard Sergeant argued: “The best examples of this you see working are those which are very focused, ideally on defined services, clients, projects or internal champions. The idea that it’s suitable for all types of services and all types of clients won’t work.”
Adam Hardie suggested: “One of the barriers is that the people we engage with are business owners and many of them are too busy to spend time on the technology.”
“Accountants accept the value of IT investment in ‘core areas’ and admin,” Ken McManus said, “But once you move into CRM systems, marketing, websites or even document management, they don’t see the relationship between the potential efficiencies for the firm, and the spend.”
Steve Wright commented: “You probably need a CRM system in a larger firm, but if you just have four or five partners you could just get them all together to exchange information over a cup of coffee and a bacon roll.”
And, as Richard Sergeant pointed out: “Having the technology is one thing, having the data is another and having the willingness to share that data is something else again.”
He said that many firms would have most of their clients’ email addresses in partners’ individual contact lists and not on a central database, and as technology evolved this would have to change.
“The more proactive firms are already some way there,” he added.
Jane Gaddie agreed: “The key thing is making sure that everybody understands the benefits of the system. It’s only as good as the information the staff put into it.”
Recalling the CRM system at his previous firm, Steve Wright said: “Once we started producing meaningful reports on the business development activity that people were doing, they started filling it in, because they knew head office was looking at the reports and their bonuses depended on it!”
How does an accountancy firm go about marketing its brand? For many of those at the round table, the quality of the brand was linked with the firm’s culture, values and training.
Kerry Manton said: “We don’t want to impose a brand on the firm, we let it grow outwards from the values and culture that we have. The brand is all about your culture, and you have to be true to that.”
Jane Gaddie said: “Our view is that our brand is promoted through our staff.”
Adam Hardie agreed: “When we look at our brand, it’s about internally developing people and training as much as ‘branding’.”
“For the small firms,” Ken McManus said, “Brand is not really an issue. The issue is how to differentiate themselves.”
So is “branding” more about what happens internally – staff training, values –or is it about more how the firm presents itself to outside world, through its logo, advertising and so on?
For Anne Farquharson, the logo “should provide a good visual representation of the brand,” but branding is much more about culture, values, and the way you do business.
Steve Wright agreed: “Accountants and lawyers tend to confuse logo and brand every time. It’s quality of service that grows the reputation of the firm and reinforces the brand. If you get it right you create a ‘demand pull’, which keeps the cost of sales down and prices high. That is true branding.”
Raising a potentially sensitive issue, Mark Lloydbottom asked: “How are your targets set and are you paid commission on the business you bring in?”
The consensus was that business development is treated very differently from sales, and while some of those round the table could earn a bonus based on the firm’s performance and/or on the quality of their work as assessed by feedback, most firms do not directly track incoming work back to the marketing activity that generated it.
Tenon’s Jane Gaddie said that as her firm’s marketing and business development has always been very focused and targeted at activities that have a visible payback, the downturn itself had not had a major impact on the firm’s marketing strategy.
She said: “We don’t spend a lot of money on activities that don’t bring results.”
That wasn’t the case for smaller firms, Ken McManus argued. He said: “The average marketing and business development spend of a typical firm in Scotland is probably around 1 per cent of turnover, and even at the top of the scale it is only about 2 per cent. Anecdotally, for a number of firms marketing and BD is the first area to go, followed by training. People don’t see the value of marketing in a recession.”
But is that comparing like with like? McManus agreed that “marketing” for small firms was dominated by advertising and hospitality, both easy budgets to cut. For mid-sized to large firms, it covers a much more sophisticated range of activities.
Steve Wright said: “The firms that are cutting back on BD [business development] will feel it in two years time. It’s even more important to market through a recession.”
“If you can measure the business generated as a result of hospitality such as hosting a table at a dinner,” said Anne Farquharson, “You can justify spending £1,000 to get £25,000 of new business.
So what are the challenges for marketing in professional services, today? Mark Mulholland said: “The biggest challenge is to look after clients well, retain them and ensure they are receiving good, proactive service. I think there will be opportunities, but also threats.”
For Jane Gaddie, one of the biggest issues was getting the opportunity to speak to the real decision makers. We are all bombarding prospects and they are very busy people. They key is keeping in touch with your client base.”
Kerry Manton said: “Getting enough time for everything is an issue!”
“My biggest hope,” said Steve Wright, “Is that marketing is taken seriously and people realise that it’s not just about handing out golf umbrellas! Until we show return on investment, and what the linkages are, we are not going to get there.”
Mark Lloydbottom left the panel with some suggestions: for example, why not introduce a “marketing miles” scheme, similar to air miles, to provide all staff with incentives to help develop new business? Why not print out cards for your partners giving each of them a list of “clients to die for”?
Finally he offered a piece of advice on cost and cheapness. “There are three things where you should never, ever choose the cheapest option: going into heart surgery, buying a hot air balloon – or engaging an accountancy firm.”
Thanks to sponsors PracticeWEB, and to the Bonham Hotel, Edinburgh.