There is much talk about digitization’s impact on blue-collar jobs, including job elimination, skill depletion, and role obsolescence. From my vantage point, the risk is just as high, if not higher, for many “white-collar” jobs. The phenomenon is hitting some experts sooner and in a much different way than they ever imagined—in the form of the latest marketing craze: content marketing.
Whether or not your firm has jumped on the “content” bandwagon, you should pay closer attention to this trend because it is empowering a force that could be eating your core business.
Content marketing is simply creating, curating and distributing information and effectively measuring its impact on revenue generation. It seems a little less electrifying when you say it like that, doesn’t it? What’s more, “content” marketing is not new in the professional services world. It’s a client-centric communication approach and one that professional services firms have used from the beginning—just one-on-one and in-person with prospects. So what has changed?
To understand this old practice in a new way and why it is devouring your business, we need to explore some key questions:
- Who is using this latest marketing fashion?
- Why are they using it?
- How are they using it to devour you?
Let me begin by illustrating this latest marketing fashion frenzy.
In marketing-hype speak, every business is now a “media company” and “content is king.” For example, energy drink maker, Red Bull, is no longer a “beverage manufacturer.” It is a multimedia company producing extreme videos and sundry entertainment. Its core capability is no longer combining ingredients into a tasteful, exhilarating drink and distributing it. Today, its core capability is entertainment and extreme fad creation— i.e. content development. There are fewer commercials and fewer ads, but there is more entertainment and storytelling. In the content marketing world, there is little difference between Red Bull, HBO, Netflix, or Time Warner. They all compete for audience share and program ratings.
All of this content is packaged through numerous formats and marketing tools including video, podcasts, experiential events, interactive ebooks, art disguised as infographics (or is that infographics disguised as art?) and distributed through apps, bots, mobile, search engine optimized websites, sponsored pay-per-click ad placements, and social media, just to name a few. These channels and tools are cheap, ubiquitous, and powered solely by “content.” Because these distribution channels are so cheap, free in many cases, everyone—and I mean everyone—now uses these tools to market products and services.
Who is using the latest content marketing fashion best?: The Monster Gobbling Away at Your Firm
As you can see from the table below, the rise of the cloud, a mature SaaS business model, and low barriers to entry have unleashed a torrid of SaaS companies that serve every functional business area. This growing number of digital natives are some of the best at fully leveraging these tools and approach. They are the companies eating away at your core business.
|Average # of Cloud Services used by Category|
Global April 2017
|Category||# Per Enterprise|
|IT Service / Application Management||25|
|Source: Netskope April 2017|
Worldwide spending on public cloud services will grow at a 19.4% compound annual growth rate (CAGR) from nearly $70B in 2015 to more than $141B in 2019. IDC predicts Software as a Service (SaaS) will remain the dominant cloud computing type, capturing more than two-thirds of all public cloud spending through most of the forecast period. Worldwide spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at a faster rate than SaaS with five-year CAGRs of 27.0% and 30.6%, respectively. Source: Worldwide Public Cloud Services Spending Forecast to Double by 2019, According to IDC.
Digitization in all its forms offers both threat and opportunity to the world of professional services with some industries hit sooner and harder than others.
Why are they using content marketing?
The short answer is to drive faster growth without huge capital expenditures. The approach offers free tools, low cost per lead, and it is aligned with the way their buyers buy (online and unaided by a sales rep).
According to a study conducted Saastr and Oracle,
- 40% of SaaS leaders say they have trouble getting the sales talent they need to close deals and keep revenue flowing. Content marketing automates almost 75% of the buying process.
- 55% worry about pricing their offerings competitively. The majority of revenue for SaaS companies comes from subscriptions and renewals. Finding the sweet spot of price to value is essential to remaining competitive with a burgeoning market.
- Nearly 50% said they aren’t sure how to grow revenue quickly or steadily enough.
Once firms get customers, the key is keeping them. Reducing customer churn makes revenue targets more attainable. Companies are looking for any cost-effective avenue to delivering a customer experience that delights and differentiates their company. Knowing your client base, anticipating their needs, and providing the right solutions is the formula for happy, satisfied, and sticky buyers.
How are companies that are devouring pro services using these tools?
The content marketing strategy is to:
1. Create the impression of “thought leader” or helpful source in solving problems.
2. Drive more traffic to their websites.
3. Convert website visitors to users of software or online services.
While many of the SaaS leaders with whom I have spoken neither have a formal strategy to displace professional services nor are aware of the unintended consequence on pro services of their content marketing, the smarter SaaS firms see the long-term opportunity to add value and increase customer loyalty.
Here’s how content marketing works.
The Google search algorithm is designed to search for relevant information that answers questions put into that little Google rectangle. For example, “How do I facilitate a business strategy/planning session?” How do I develop a total rewards program? “Who is the best sales training company?” “What are best practices for Webex API design in Sudan?” “Where can I find the size and growth rate of upstream gas production in Qatar?”
The service providers simply identify the questions buyers have all along the buying cycle for their firm’s given solution, mass produce “answers” (i.e. content) to those questions in easily consumable form, optimize their web content pages for search, attract visitors, and give the content away in exchange for a little personal information (e.g. email and name).
As a result, your markets and prospects are awash in FREE intellectual capital: research reports, infographics, strategy and analysis tools, templates, planning and project management resources, how-to videos, chatbots, apps and a plethora of other IC commoditizing approaches. The content providers (software, online tools, or specialists) supplant expensive professionals who deluded themselves into believing that standardized, repeatable processes were some form of differentiated value (think web coding & design, HR, audit, wealth management, insurance, risk management, system integration, custom software, etc.). Pick any of your prospects top questions and try it.
Think about it. Why does a company need to pay $100K to an extravagant web development agency for a highly customized website when it can download and develop a $100 website template in-house that offers more security, speed, and flexibility? Why hire an executive recruiter for access to best candidates and pay a third of a new hire’s first-year salary when you can source top candidates via LinkedIn for a nominal fee or even free? The smart ones are not paying it.
These companies are accelerating the rate at which they are commoditizing professional services thought leadership and eliminating low- to medium-value intellectual capital that many firms see as proprietary. In many ways, the “content” dynamic illustrates the “innovator’s dilemma.” These software companies, whether intentionally or not, are becoming the next generation consulting firms by giving away traditional IC in return for control of huge amounts of user data, and using that data to draw next-generation insights and develop new client-centric products.
Ironically, many companies giving the IC away are not even developing it themselves. They are outsourcing its production to a “content developer” or, even worse, buying generic content from an industry-specific source (e.g., accounting, tax, financial services or marketing publisher). The more creative marketers are using crowdsourcing and letting users/members/boutique consultants create “content.” It’s free, symbiotically feeds the content monster, and gets “validated” by “social proof” through the self-promoting crowd (i.e. social shares).
This threatening scenario exists across most professional services. According to the Digital Transformation Initiative Professional Services Industry whitepaper produced by the World Economic Forum and Accenture, digitization in all its forms offers both threat and opportunity to the world of professional services with some industries hit sooner and harder than others (see figure below). I suspect, if not for regulatory mandates/changes, most professional services firms are on a glide path to extinction, if they maintain the status quo. Perhaps that’s why so many accounting, legal, healthcare, environmental, and financial lobbyists exist.
You can tell yourself all you want about the additional value you add, but the market’s actions are more revealing. Here are just two examples. First, the top recruiting firms have abandoned their own proprietary databases in lieu of LinkedIn and have made aggressive acquisitions to diversify from search (e.g. Korn Ferry’s acquisition of Hay Group, et al) to broader leadership, talent management, and performance management technologies. Second, in 2014, due to slowing growth prospects, sales-performance companies Miller Heiman, AchieveGlobal, Huthwaite and Impact Learning Systems merged to form MHI Global, the largest sales-performance company in the world. MHI Global followed up with the 2015 acquisition of CSO Insights, a sales effectiveness research and benchmarking firm. The goal is to become the leader in artificial intelligence sales insights and technology.
What makes content marketing important is this—and only this: content marketing flips the marketing conversation and power from seller to buyer. This means that instead of pitching products or services, your firm needs to be more attuned to your clients’ issues, buying cycles, perspectives on what a viable solution is AND who a potential solution provider is. According to the research of 8,000 buyers by the Hinge Research Institute, the average professional services firm is aware of only 1 of every 4 competitors.
If your firm thinks content marketing is about producing “How to” content and sharing inspirational quotes on social media to promote your core business, you better change your paradigm. Promoting a commodity service whose time has come is not going to produce good long-term results—or short-term results, for that matter. It’s time you understand who your real competitive threats are.
Those firms that don’t know against whom and what they are competing are going to be lunch.