Marketing a Professional Services Firm
Marketing a professional service firm requires different strategies and tactics than marketing a product. When looking back at the source of new business, most service firms will find that approximately 85 percent of their new business is generated from referrals. Those referrals will largely come from existing clients as well as business contacts and other professionals.
What this means to you is that the majority of your marketing effort should be placed on relationship building – both with existing clients and those people that are in a position to refer work to your firm. You’ll need to put some effort into other marketing/business development activities as well. And with a systematic, scheduled approach to marketing, you’ll keep the pipeline full with new prospects.
Before beginning any business development activities, you must first identify who your target market is. The best way to identify your target market is to look back at your own accounting records for the last five years. Look at the top 20% of your billable clients and see if there are similarities. Are they from one type of business sector, one geographic location, do they all have similar accounting issues? Once you answer those questions, you can hone in on which types of clients are the most profitable prospects for you to pursue. Remember, you will spend the same amount of time marketing to a client that nets you $100 as you will one that nets you $1 million. So focus your energy on the larger, more profitable clients.
As you can see, direct mail, advertising and cold calling will yield a 1 in 1,000 positive response. I recommend you put little resources into these activities other than perhaps very targeted advertising. For instance, if many of your new clients come from attorney referrals, it would make sense to advertise in your local State Bar publication. Or if the majority of your profitable clients are woman-owned businesses, there may be an opportunity to advertise in your local National Association of Women Business Owners newsletter. If the advertising is very targeted and inexpensive, it would make sense to consider it. Do not mass advertise, unless your target market is the general public.
Moving up the pyramid to organizations and seminars. It is important to put part of your time and resources into strategic alliances. Now that you’ve identified your target market(s), you’ll want to participate in organizations where those businesses/individuals are members. One caveat, joining an organization won’t automatically mean more business coming your way. You will need to make the commitment to be an active participant. So find the one, two or three organizations that you can commit to and become active – join the board, volunteer to be the treasurer, write the newsletter. Find a way to be a visible, contributing member, and you will see that investment in time translate to new business.
Also on the same rung on the pyramid is seminars. Many professional service organizations have success in marketing via seminars. If there is a topic you are an expert in, it might make sense to host seminars on that topic and invite people/organizations from your target market(s) to attend. The seminar must be informative, not a sales pitch on your organization. You can expect that for every 25 people/organizations that attend, one will become a new client.
Putting on successful seminars is time consuming on the front-end. But once you develop a successful format, it can be duplicated. Another way to maximize your investment and minimize efforts is to partner with other non-competitive organizations for the seminar. For instance, there may be a law firm or stock brokerage firm that would be interested in partnering. They could share the cost of the seminar with you and by co-marketing, you will get your name and firm in front of their clientele. Make sure whomever you partner with is of the quality you would want to refer your clients to and be sure their target markets are similar to yours.
Another activity that shouldn’t be overlooked in this section of the pyramid is earned media or public relations activities. This is where you get news stories/articles written and placed on your firm. The media can be a very powerful tool in positioning your firm as experts in the marketplace and give you instant credibility.
At a minimum, I recommend sending out press releases to the local business publications and the business editor of the daily newspaper on major activities at your firm i.e. new hires, promotions, awards, being appointed to a non-profit board, etc. Then set as a goal to have at least two articles a year with you quoted as an expert. Or even better, if you can have your firm featured. There are various ways to achieve this goal: you could write a guest column in your local business section or in one of the newsletters that reach your target market on a topic that is timely and that you have an expertise in. You could talk to the business editor about running a feature story on your firm and the successes you’ve had. You could send a media kit to the local media so that you are a resource for them when they’re doing business articles.
Next is staying in touch with clients and referral sources so that they refer new business. The first thing to consider if you haven’t already done so is a useful, informative, easy to navigate web site. This is a way 24/7 that people can learn about your firm. On the website, be sure to include a section with recent news on the firm. This is where you would link to the articles and mentions we discussed above. The benefit is that it gives you instant credibility when the media is writing about you.
In addition to the website, I recommend sending out periodic e-newsletters. I’d send them at least quarterly, and more frequently if you have timely information to disseminate. Be sure the newsletters are light and easy to read (not too much tax information). The purpose is to stay in touch and encourage people to call and be in touch. Don’t be afraid to use graphics to tell the story as well. If it’s too overwhelming to figure out how to do it, hire a professional. It will be money well spent.
Find other ways periodically throughout the year to stay in touch with clients. Be willing to be different here. Don’t just send out a holiday greeting. Be different, so that people notice you. One of my CPA clients does an event at her office every April 15th called the Wine and Whine event where people can drink wine and whine about having to pay taxes. It’s a fun event and last year, the media covered it as well.
Instead of sending a holiday card and gift, which typically gets lost in the hub bub of the holidays, my firm celebrates an unknown holiday every January. In January, no one is thinking of gifts and ours always stand out. This year, we celebrated January 20th, National Do Nothing Day. We delivered custom teas and mugs and a cute card to our clients. They loved it.
Lastly, when someone does refer, don’t forget to take the time to write a hand-written thank you note. It’s a dying art. But people do appreciate being recognized for their good deeds.