This is the first of a series of posts on how to develop and execute an effective industry strategy to drive profitable growth in a professional services firm.
Clients are telling us loud and clear that they value and select advisors based on industry expertise and experience rather than pure technical expertise.
Firms across the professions have responded by developing industry strategies with varying degrees of success.
Industry strategies drive profitable growth
Our 2016 beatonbenchmarks research shows that firms with the strongest industry reputations are winning more work, and unpacks how a successful industry strategy influences client choice.
Our research across law, accounting, engineering and management consulting professions shows that the top drivers of consideration and purchase are the same:
Expertise in our area of need
Understanding my business and industry
Commerciality of advice
What clients are saying is that when they are selecting which firm they want to work with, they want firms and practitioners who can demonstrate that they have expertise in the client’s area of need, based on a deep understanding of their business and the industry in which they operate and compete. Clients do this because they know that this will lead to the most commercial advice.
What they don’t want is untailored ‘product’ from a top firm or technical expert, even if they have a leading position in, for example, the Chambers ranking for lawyers and law firms.
This is what clients equate with value when they are selecting a firm, and our research shows that their expectation of value is increasing every year. Most clients are willing to pay more for a firm that demonstrates superior industry experience combined with technical expertise.
Because this is the winning work stage of the buyer cycle, client judgement is based on market perception of your expertise, knowledge and experience in the relevant industry. How strong is your
market reputation (of both your firm and your key practitioners) for being leaders in this industry? How does your reputation as an industry specialist compare with that of your key competitors?
Perception drives choice, because potential clients expect that firms with a leading market reputation will understand their industry well. beatonbenchmarks research shows that the firms who make it onto the client’s consideration list for a new job will be the ones with the strongest industry reputation. Typically if a firm can achieve a top 3 industry reputation, they will be be on the consideration list and be invited to pitch.
Firms without a leading industry reputation will need to work hard to demonstrate their industry experience through prospecting and pitching, and are more likely to have to compete at a lower price point to win work.
So what does this mean for your firm’s industry strategy?
Industry reputation is now a vital part of brand and growth strategy– in which client industry/ies do you want to be famous – and for what?
What is your market reputation in your priority industries benchmarked against your close competitors?
What strategies and investments are planned to achieve a top 3 market reputation in your priority industries?
How will you measure ROI on your investment in your brand and growth strategies?
For more insights on related topics
+ The three things that create value for clients
+ Here’s how to help your clients cross-buy
Paul Hugh-Jones is a partner of Beaton Research + Consulting and a director of APSMA (Asia Pacific Professional Services Marketing Association). You can also connect with Paul on LinkedIn and contact him at firstname.lastname@example.org.