For over 20 years, Greenfield/Belser has pioneered thinking in the marketing of professional services. We were the first to pick apart the sales process of finding, then choosing professionals. We detailed why services get on a short list and why services are ultimately chosen. We have helped firms build marketing strategies and tactics around this research.
Ten years ago, we pioneered research about how buyers use the Internet to find services, research that was updated last year as Digital Marketing 2010. We love to make our work beautiful but we care more that its marketing structure is solidly based in research.
As the pace of communication has picked up, we recognized that an annual research paper was not enough. So we introduced the Big Idea which we publish six to ten times annually. Each Big Idea represents a deep dive into a single issue of importance to marketers. Finally, if we notice things that we believe you'll find useful, we blog about them right away.
So dig in. There's a university curriculum housed in these pages.
Recent Big Ideas
We don’t often write book reviews but The Challenger Sale, by Matthew Dixon and Brent Adamson, deserves your immediate attention. Based solidly in research like Jim Collin’s Good to Great, The Challenger Sale overturns everything you think you know about effective salesmanship. Relationship selling? In the dustbin. The authors’ surprising conclusion is that a relationship is earned as a result of the sale; it is not the source of the sale. If that doesn’t blow your mind, stop reading. If you want to learn how that conclusion was reached, read on.
The Challenger Salehas compiled research on salespeople who consistently win over time, and more importantly,who win in bad times and good. The authors measured the highest performers against the lowest. They subjected long-standing beliefs about good salespeople to hard data.
The History of the Salesperson is More Recent than you may Think
Forever, basically, people who sold goods and services also delivered them. Only near the turn of the 20thCentury were salespeople separated from the manufacture, sale, delivery and business operations of services and products. Selling was first taken seriously as a professional discipline in the 1950s. The first dominant philosophy was the AIDA model—Attention, Interest, Desire, Action—which stressed presentation and closing skills. By the 1970s, as automation made sales more efficient, consultative selling emerged, where the emphasis was not on selling products or services but a solution to the customer’s problem. Think features and benefits. The solution sale remains the dominant sales model. In fact, the short history of sales is marked by only a small number of breakthroughs based on a single continuing shift in focus from the needs of the seller (move product, drive revenue) to the needs of the buyer (solve a problem, deliver a benefit). When the solutions are complex and intangible, the problem multiplies. Businesses like law, accounting and consulting came to believe the path to a successful sale lay through developing a personal relationship with the potential buyer. All of our efforts, therefore, have been focused on getting our professionals in front of prospects. Now the trap door opens and the bottom falls out…
A Diagnosis of the Death of Dewey LeBoeuf
It wasn’t the debt. It wasn’t the recession. The demise of Dewey LeBoeuf’s was caused not by a single death blow but by systemic disorder.
A Rosy History
The dissolution of Dewey LeBoeuf is a very big deal: It is the single largest firm in the history of the U.S. to declare bankruptcy. But for many years, the New York behemoth was the picture of financial robustness: one of the big boys of corporate law, with a white shoe pedigree, it had expanded over the last few decades across the globe, opening offices in Beijing, Paris, Abu Dhabi and elsewhere. But, since its merger with LeBoeuf in 2008, the reality was that Dewey was slowly and secretly hemorrhaging. How bad its state of health had become was made clear at a partners’ meeting to discuss the firm’s finances last January. According to Insurance Journal, partners were then informed by Chairman Steven Davis that “of Dewey’s approximately $250 million in net income for 2011, about half was committed to pension obligations to retired partners and compensation that was owed to certain partners for the two prior years”. Partners began defecting en masse, and any last-minute cure through a merger was wiped out when the Manhattan District Attorney began to investigate Davis for wrongdoing.
So, how exactly did a firm that was raking in $900 million just a few years ago wind up dead as a doornail? It came as a complete surprise not only to Joe Public but to many of the partners and associates who worked there.
Symptoms of Ill Health
Much has been made about Dewey’s singular and bewildering compensation packages for star partners, which made the firm top heavy with financial commitments. Add to that an enormous amount of money owed from Dewey’s rapid expansion plans since its merger with LeBoeuf, (Dewey has outstanding bank and bond debt totaling approximately $230 million), and the firm was positioned to topple over when the market crashed (Reuters).
But Dewey’s phenomenal debt grew out of a deeper dysfunctionality, “characterized by a lack of disclosure and controls where an inner circle of partners reaped most of the rewards” (Bruce MacEwen). As Alexandre Montagu, writing in the Huffington Post, observes: “the failure of the firm is not the result of an isolated incident of mismanagement. To be sure, the guaranteed payouts to star partners and the unusually large debt amassed by the firm did precipitate the fall; however, the payouts and the debt were only symptoms of a much deeper structural malaise affecting the entire legal industry.”
Many commentators are now asking if Dewey’s meltdown is just the tip of a big firm iceberg. Greenfield/Belser posed a similar question several years ago. In 2002, our research division, The Brand Research Company, conducted a census of failed firms by speaking with the management of those firms, not the rank and file. We also compared those failed firms with firms whose revenues had increased by 5% or more for two successive years. We learned definitively why some firms succeeded while others went under. Our report, Why Firms Fail, Why Firms Succeed, became a prescription for the success of firms and a warning of their failure. We demonstrated the structural weaknesses that were predictive of collapses like Dewey’s... (more)
Responding to RFPs in the 21st Century
Today, proposals are a way of life for law firms. But it wasn’t always that way. Thirty years ago, it was not uncommon for law firms to send a bill—a single bill—at the end of the year for millions of dollars with the terse description “for services rendered.” From the attorney’s point of view, that act may have been perceived as an affirmation of trust between partner and client. But from a client’s stance, such an un-itemized, annual bill for millions would certainly have been interpreted as unbridled arrogance.
The Way It Was
Fast forward to circa 2000. Corporations began to get tough on billing, recognizing that it was they, not the law firm, who held the reins. Auditors were called in to study every aspect of legal bills, forcing a change of habit in law firm billing. In a complete turnaround from established practice, bills were expected to be timely—monthly, sometimes bi-monthly, rarely quarterly—to satisfy corporate budgeting requirements. And bills had to be thorough, detailing exactly what work was done and by whom for every phase of the assignment.
During the last ten years, corporations began to issue RFPs routinely. The most diligent corporations have hired purchasing agents to collect and evaluate the proposals they receive (forget that an RFP is a lousy way to evaluate talent; it clearly reflects commoditization in the legal industry). Now, after a decade of detailed legal billing, TyMetrix, for example, has a record of $50 billion in billings that, when subjected to analysis, allows clients to know exactly how much time “should be” spent on an activity and the level of experience (read, billable hour rate) it requires. That reality has yet to take hold in most law firms. But it is here.
Law Firms’ Response: First Generation Proposal Generators
Law firms responded to billing scrutiny by automating proposal generation. The first wave of legal proposal generation tools were created by Hubbard and were revolutionary for their day. They allow firms to leverage their public website content, grabbing frequently used information for proposals. They have problems, however: The source content is stored as HTML. The business challenge of building proposal documents is significantly different from managing websites. Authoring a proposal in HTML is difficult for lawyers and the system requires the lawyer interact with the proposal technology. Scary... (more)
Forget about March Madness. The first quarter of 2012 was Merger Madness, with 20 U.S. and 19 international law firms completing mergers in the last few months, according to a report issued recently the Hildebrandt Institute, a subsidiary of Thomson Reuters. The US side represents an upswing of 43% in mergers over the same period in 2011. Those mergers took place across the country.
Mergers are clearly a trend on the rise in this difficult economic time, as businesses struggle to stay competitive. So, if your firm is one of the many contemplating a merger, what should you do to manage the process smoothly while ensuring your new brand reflects both you and your new partner equitably and memorably?
Timing is everything.
Usually, by the time a merger hits our desks, there’s very little time left to act. Time is precious since the public announcement usually quickly follows the partnership vote. Ironically, enduring goodwill can hinge on the very first act the merged parties undertake: the combined firm’s new identity. And it’s inevitably the last item on the list for consideration. At the twelfth hour, we often get the call asking for help in negotiating the new name of the merged firm.
We urge you to have your message in hand by the time the merger is an agreement in principle. From that moment, the clock is ticking. Forget a full-blown communications strategy; you need to click into implementation mode. You have a maximum of 100 days to generate a public face for the new firm while the merger is still news. The sooner you’re ready, the greater the impact. Sell from the inside out.
Get ready, get set, go!
Once the deal is real, a merger is all about integration—from day one to day 1,000. Marketing and internal communications can play an important role by creating and developing the new firm’s message to the world. Helping the firm’s attorneys understand and articulate the benefits of the merger isn’t always easy—but it’s critical to reassuring clients who are concerned about clashes of culture, conflicts of interest and cost increases.
Assemble the perfect merger team.
The merger team defines the message to clients and sparks the enthusiasm that makes it memorable. In addition to the managing partners of both firms, the perfect merger team usually includes several of their trusted lieutenants, marketing leaders from both firms (unless another understanding exists) and communications experts in public relations, brand design and advertising.
Even in the most amicable mergers, where compensation and client conflict issues are settled early, agreeing on the new name and visual identity of the firm can create frustrating stumbling blocks.
Trying it vs. Liking it: changing perceptions to social media and ROI
More and more marketers like social media as a tool for demonstrating return on investment.
For much of the last decade, social media was something most firms experimented with, tentatively, instead of investing in wholeheartedly. Firms tried social media as another tough to measure tool to raise awareness or make connections. They created a presence on social media sites like Facebook and LinkedIn, but with a healthy skepticism about ROI. More often than not, they dabbled in social media because they feared falling behind, instead of aiming to move measurably ahead. Corporate presences on FB and LinkedIn only happened in the last few years.
Also, we could always measure social media, but the tools were not as well integrated and as descriptive as they are now.
A new report by Marketing Sherpa, 2011 Social Marketing Benchmark, details a number of findings that show perceptions of social media as little more than a time draining experiment are changing. And changing fast.
Marketing Sherpa interviewed over 3,300 social media marketers. The report notes an important distinction in marketers' attitudes that are directly related to how evolved a firm's social media program has become. It breaks down social media programs into three stages: trial, transitional and strategic. "Achieving or increasing measurable ROI from social marketing programs" between CMOs in the strategic phase (63%) and those in the trial phase (35%). Strategic phase social marketers are much more likely to have the monetization of this channel under way.
The report found that investment in social media has been steadily increasing over the last few years: "Twenty percent of CMOs said that social marketing is producing a measurable ROI for their organization, and that they would continue to invest in this tactic. This percentage has nearly tripled from 7% a year ago and the perception of social marketing's value continues to improve." (http://www.meclabs.com/training/publications/benchmark-report/2011-social-marketing)
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