Most professional services firms are pretty sure they need a marketing organization, but they’re never quite sure how much to invest or what form that investment should take.
There is no perfect marketing structure, but there is an optimal structure for your business strategy, firm culture, and desired level of investment. This guide helps you think through the 5 Tough Questions you must answer before building or cutting your marketing organization.
Why the “Optimal Marketing Organization”
As a marketing leader at global service firms, including Hewitt, Towers Perrin, Andersen and Genworth, and now as a consultant, I am regularly asked questions about investments in marketing structure:
“How much should we spend on marketing?”
“Where should we spend it?”
“Do we need to be more strategic or more tactical?” “Should we organize Marketing by practice, industry, geography—or all three?”
“What functional marketing skills should we have?” (communications, proposals, CRM, social media, design, etc.)
“Should Marketing be centralized or decentralized?”
“(Fill in the blank) is a hot right now; do we need a (fill in the blank) person?
Be careful with benchmarking reports that promise simple answers.
There is no shortage of questions on marketing structure and investment. Apparently, in a content-rich blogosphere, there is no shortage of answers either. There is a plethora of research and benchmarks to help firms see where peers are investing marketing budget. According to many studies, most firms invest from 1-5% of firm revenues on “marketing.” There are breakdowns of tactics (e.g. events, white papers, social media, etc.) and hot fads on the rise (account-based marketing, “content” marketing). You can even find research on the coolest “brand” colors.
If you rely on these reports, then I offer a word of caution: these reports often lead to more confusion and more squandered resources. Many of these “studies” are nothing more than veiled “thought leadership” pieces that rationalize a solution provider’s core competency or Rorschach tests for a partner’s desired marketing solution. For example, there are very few firms that can accurately account for “marketing investment” beyond salaries, advertising and sponsorships. So, how do you differentiate between your firm and firms spending 1% and 5%? Is a golf outing marketing? Is a prospect lunch? Is a charitable contribution given through a partner’s board membership? What about the cost of server space for a website?
Did you know? Only 8% of human beings have the average body temperature of 96.8 degrees! 92% of us have a “normal” temperature that is higher or lower AND are perfectly healthy.
As for tactics, content marketing is the rage. Does anyone actually know what that means to the professional service industry that created the concept and has been marketing ideas for decades? What about social media? Does the fact that other firms are using Facebook or Instagram dictate that your firm does so? “White papers” are hot again. Does that mean your people should be spending valuable hours researching and writing? Maybe. Maybe not. Some studies claim to have broken a code about what differentiates “high growth” firms, by correlating tactics and growth rates. But, they ignore the cyclical, boom and bust nature of entire consulting disciplines and the reality of regression to the mean. In the end, these reports just give you averages and fall short because they do not address the question that firms are ultimately trying to answer. The question is:
What is the “optimal” marketing organization for us?
While service firms share similarities, the answer for the optimal marketing organization is unique for every firm. Even if they are similar in discipline, size and geographic footprint, firms are very different in culture, strategic priorities, expectations of marketing, organizational structure, and budget. This guide is different. It will neither provide you with averages nor provide you with a single answer. This report will guide you through the process required to create YOUR marketing organization.
QUESTION 3: What are the appropriate skills and roles required to achieve our strategy and expectations of marketing?
QUESTION 4: What is the gap between our current team’s capacity and that level required to achieve our vision?
Let’s look at question number one.
1. Where exactly is the firm going strategically?
The very nature of professional services firms, what I call “The BS of PS,” makes it difficult for leaders to make strategic choices. As a result, the biggest problem firms wrestle with is the “tyranny of choice.” Each line of business sets out growth priorities each year based on a firm mandate or historical precedent. Often, these priorities are derived from competitors’ forays into new markets, a recent client success that now represents a new “product” or “service,” or an ambitious, wannabe partner applying his/her capabilities in some obscure area to build a book of business. Suddenly, the firm is beset with decisions about what to pursue. If the tough strategic decisions do not get made, the default is to “grow everything.” As a result, firms unconsciously create a discombobulated Marketing team running around trying to meet the whims of partners and demanding practice leaders—all with “a top priority.” “Grow everything” is not a strategy.
RELATED: You Don’t Have a Marketing Problem
If you doubt what I say, then ask your fellow partners to answer a few of these questions about the firm’s strategic direction and growth priorities, and then compare their answers:
- What are our top three strategic growth priorities?
- Where is our growth going to come from?
- Will the growth come from current clients or new clients?
- Will we emphasize existing services or new services? Which ones?
- Will we focus our efforts on existing markets or new markets? Which ones?
- Will growth come organically or through acquisitions?
- Which practice has priority?
- What are our success metrics? Revenue? Market share? Net new clients?
- Do we have the capabilities to attack the market?
- With which clients have we demonstrated these capabilities?
- Do we have the appropriate scale of capabilities for the desired growth?
- If we don’t have the capability, how do we plan to obtain the capability? Will we grow it or buy it?
Culture & Brand
- Is our brand relevant in the growth market(s)?
- If not, what will it take to make it relevant?
- How does our culture support or not support the growth we want to achieve?
- How will our culture change to support it?
- What is the plan for change and who owns it?
These are neither profound nor difficult questions, but they are seldom asked. When they are asked, they often go unanswered or they have so many different answers that the answers are worthless. No clarity, no direction. When a firm has limited resources (and which firms don’t?), you have to place bets on the opportunities that offer the highest chance of a worthy return. That means making hard choices.
ACTION: Define exactly where your firm is headed, who is leading and how you will know when you get there.
Now, let’s look at question number two.
2. How do we expect our marketing organization to help achieve our strategic vision?
You can’t build the “optimal” marketing function until you have collective clarity on the role marketing should be playing to get there. To answer the “optimal” question, you have to know what you want your marketing function to achieve. Most often, firms answer the “what do you want marketing to achieve?” question with a nebulous answer such as: “Growth,” or “Nobody knows us. We need to build brand awareness,” or “We need to make the phone ring” or “We need to grow revenues.” They say, “After all, isn’t that why we have marketing?” I don’t know. Is it?
Discussing marketing with firm leaders is like discussing politics, religion or fitness. Everyone defines conservative, liberal, orthodox, reformed, healthy and unhealthy differently. It makes sense to anchor the starting point.
The “Two Schools of Marketing” in Professional Services Firms
I divide the two schools of marketing into the Productivity School and the Growth School.
The Productivity School of Marketing sees marketing’s objective as increasing the personal output and utilization of highly paid consultants (lawyers/architects/accountants/engineers). Marketing exists to keep the line’s productivity high. This school believes that simple economics dictate that a $40/hour “marketer” write proposals, proofread documents, design presentations, enter data and manage events, instead of having a scarce resource who bills out at $250-$1,000/hour do it. Work is delegated based on perceived value contribution. Consultants add maximum value by serving clients and setting marketing strategy for the practice. Marketing is a cost to be managed and its value is in “making things pretty.” With this approach, the marketing emphasis is put on sales support and brand policing. Marketing maintains a cosmetic a “brand umbrella” that enhances the personal productivity and accommodates the “personal” brands of select consultants. Key performance measures include marketing headcount, brochures produced, proposals written, events held, and, most important, partner satisfaction with the order taker.
The Growth School of Marketing views marketing’s role strategically. The objective of the Growth School is strategic impact that maximizes profitable growth. Marketing operates as big-picture thinkers with strong business acumen. The marketers drive growth by helping the firm define target markets, anticipate client needs, develop capabilities and build solutions that meet them. Instead of emphasizing cosmetic brand, this school emphasizes strategy and organizational effectiveness. The result focuses on maximizing the firm’s ability to deliver the brand promise. These firms emphasize culture (i.e. reinforcing behaviors that build and actually differentiate the firm). A firm identifies an “ideal client” who provides cost-effective scale and values the firm’s capabilities and solutions. In the Growth School, marketing’s metrics and goals are tied to firm-wide strategic goals. Key performance measures are new market development, pipeline contribution, market share, brand relevance, referral strength, and marketing qualified leads.
To achieve competitive advantage and sustain long-term growth, firms must constantly be focused on their ability to communicate their promise to the market (Productivity school) and deliver on that promise to the market (Growth school). Many partners like the clean division of labor of the Productivity School. They believe that marketing does not understand the business and the line has the strongest and most accurate knowledge of the voice of the client and marketing strategy. However, partners are often the proverbial blind man feeling an elephant. They have a line-of-business paradigm, overestimate their marketing ability and wrestle with balancing competing non-marketing roles. As a result, firms can squander marketing investments to optimize productivity instead of driving growth.
Before you move to the third big question, your leadership team must agree on Marketing’s role. Do you want Marketing’s primary role to make things pretty and keep line people productive or do you want the team to have a strategic impact on revenue, market share, and new market opportunities? They can do both, but you have to invest in the necessary skills and roles.
ACTION: Determine your marketing school of thought.
We are on to Question Three.
3. What are the appropriate skills required to achieve your strategy and expectations for marketing?
Now that your firm has clarity about its growth priorities and marketing’s role in achieving them, it is time to determine how marketing will spend its time and treasure. After a marketing strategy is developed, an organization will focus on four general buckets that shape marketing plans and activities:
1. Demand Generation
2. Lead Generation
3. Sales Support
4. Product/Service Development
Your bucket focus depends on the three factors displayed in Exhibit 1.
How big is your market opportunity? The right vertical axis maps the growth opportunity for your firm or practice. On the top of the axis, the market pie is sizable. There are few competitors. You have an opportunity to add value and to command premium fees. On the lower end, the market is mature, crowded and stagnant.
How aware is your market of the issue or opportunity before it? The left vertical axis represents your market segment’s need or issue. The high-end represents a new strategic or pending issue for the market; the low end represents an issue that is mature and well known. So ask yourself if the issue that can fuel your growth is one that buyers are aware they have or does the market require education to build awareness
How does the market perceive your brand? Your brand relevance flows along the horizontal axis. To the far right, the market considers your firm an expert in addressing this issue. You are invited to the table to propose on work and your brand is the preferred, or “safe,” obvious choice. To the left, the market has little knowledge of or confidence in your reputation in addressing the issue.
DOWNLOAD: Marketing Investment Priorities Map
ACTION: Plot your growth opportunities AND your overall firm on the grid. You may discover lines of business appearing in different squares and your firm itself in another square altogether.
If your firm/growth opportunity is in Quadrant 1,
- your clients are unaware of the issue in their lives,
- you do NOT have a strong brand around the issue, and
- the client need provides a growth opportunity for your firm.
Your marketing organization should be built with skills to optimize Demand Generation. You should consider investing the majority of your marketing resources to build awareness of the issue/solution, demonstrate your firm’s credibility to solve the issue and nurture leads for future engagement. Smart tactical investments are thought leadership, research studies, media relations, public speaking, social media, and webinars.
If you are in Quadrant 2,
- your clients are unaware of the issue in their lives,
- you have a strong brand around the issue, and
- the client need provides a growth opportunity for your firm.
Your marketing organization should be built primarily on skills for Lead Generation. Invest in generating leads today with highly targeted lead generation activities that speak with authority, detail the issue’s urgency, have a strong call to action and provide scale, such as speaking engagements, direct mail, and seminars. If you have not already made the investment, integrated CRM and marketing automation should be a priority and will provide major ROI lift in Quadrants 1 and 2.
If you are in Quadrant 3:
- your clients are very aware of the issue in their lives,
- you have a strong brand around the issue, and
- the client need provides a limited but profitable opportunity for your firm.
Instead of investing in marketing, focus on personal selling and Sales Support. Call your client or prospect, demonstrate the business case and simply ask for the business.
If you are in Quadrant 4
- the issue is very mature
- there is a limited growth opportunity
- you have limited or no noteworthy brand relevance
It is time to Redeploy resources to new products and services. Make the hard strategic choice to exit existing businesses that have run their courses or in which you have failed to achieve brand relevance. Reallocate time and resources to develop market-tested, viable new products and services.
THEN, Confusion sets in. You may be finding yourself saying, “I need all this capability.” Yes, you probably do. But, unless you have unlimited resources, you have to make choices.
ACTION: Review your growth map and make the hard choices.
We have now reached the fourth crucial question.
4. What is the gap between our current marketing team’s capacity and the level required to achieve our vision?
Let’s talk about your marketing organization as it stands today. Traditional marketing (advertising, branding, sales, etc.) has evolved considerably over the last decade. The change that began in consumer markets was primarily driven by web access to product and performance information. While many professional services firms were following traditional old-fashioned marketing methods (branding, sales, and events), consumer products companies were developing thought leadership, digitizing insights, institutionalizing customer preferences and building trusting relationships sight unseen.
Today, the best marketing organizations are built around the client buying process, rather than a firm’s sales process. The professional services buyer has digital access to firm performance, client reviews, business insights, and highly competitive, specialized experts around the globe. Few marketing organizations have the leadership, skills, technology, culture, or courage to compete in this new environment of transparency and immediacy. As I said earlier, left to chance, your marketing organization will default to individual partner demands/priorities.
As a non-marketer, you may be wondering how to assess your Marketing team’s skills. Most managing partners simply ask their partners’ opinions of the marketing team. Too often, the main criteria used in assessing marketers are Productivity School qualities, like “responsiveness” and “prettiness.” Partners who believe in the Growth School of thought should be listening for words like “effective,” “strategic” or “revenue-generating.” Let’s think about marketing capacity from three dimensions: Leadership – the manager of the function who drives the team towards your defined objective and serves as the face of marketing to the organization. Roles – the multi-faceted positions needed for optimal structure (dependent on the Marketing School of Thought and desired outcome) Skills – a traditional breakdown of marketing skills and acumen needed to deliver the optimal marketing organization’s results (dependent on Marketing School of Thought and desired outcome)
Most business leaders are clear about the difference between leadership and management. Carly Fiorina, former HP chief executive officer, has delineated management and leadership in a way that really resonates with me. Leaders can be managers, but not all managers are leaders. She said that “management,” in any setting, is the task of “producing acceptable results within known constraints and conditions.” In marketing, the results are rather common: produce a webinar, write a brochure, update the website, etc. The constraints and conditions are well known, as well: deadlines, budgets, resources and individual partner expectations. It is important to have good managers. After all, you have to keep the trains running on time.
If you are in the Productivity School, your marketing leader should be impeccable at keeping the trains running on time. That means project management, scheduling, workflow, and quality control. I call this person the GSD Leader (get shit done). Nothing stands in the way of delivering a project on time and on budget. This person takes any request, at any time and doesn’t sleep until it is completed.
Leadership, on the other hand, is rarer. Leadership says, “I am going to change the conditions.” Fiorina says that leadership “changes the order of things.” Most partners may laugh at the idea of a marketing person changing the order of things in a firm. As I said, in many partners’ minds, marketing does not understand the firm’s business. Leaders do not accept the constraints. Leaders see a different path and change the trajectory of the firm. If your expectations of marketing fall into the Productivity School, you are less concerned with Marketing’s understanding of the business. However, a deeper understanding can produce higher productivity returns in writing and design choices that require less line involvement.
Traditional marketers have a career progression. Coordinators become managers who become directors who become CMOs. The titles are designed to illustrate value. I think that the approach is antiquated and can be ineffective in delivering results and superior ROI from marketing teams. I prefer to think in terms of roles. Depending on your school of thought and priorities, here are the key roles to consider.
Many firms think that they have this role covered because they develop a complex, months-long business planning process at the start of each fiscal year. While the process often uses buzzwords like “SWOT,” “adjacencies” and “growth targets,” firms seldom ask the basic strategic questions: “What problem do we solve?” “Who is our ideal client?” and “What do they value?” The Strategist’s role is to get the firm focused on the most important questions. The Strategist is a big-picture thinker with strong business acumen and a passion for meeting clients’ needs. He/she is measured by the firm’s ability to anticipate needs, develop capabilities and build solutions that meet them.
Business life is like fashion. Consulting fads come and go, historical events happen, demographics change, technology evolves, markets expand and collapse, etc. China, marketing automation, the Internet of Things, mobile, cloud, consulting industry disintermediation are just a few areas of recent import. As the world turns, most professional services firms are content to be followers. The Futurist’s role is to go up on the mountain and think about “What if…?” Having the ability requires the time to think, ingest huge quantities of seemingly irrelevant information and synthesize a hypothesis that provides a competitive advantage for the firm. The Futurist is a learner, antagonistic, a born problem-solver, impractical, expensive, innovative and, more often than not, annoyingly brilliant.
Many partners think they are marketing gurus because they like an Apple commercial that is cool, read a book on emotional branding or serve a big client–- none of which qualifies them to layout marketing strategy for the firm. The Enforcer role tells the partner(s) to sit down and shut up (metaphorically speaking). This person possesses the understanding of the firm’s business, strong operational and business acumen and the gravitas to push back on loud, intimidating partners with an intelligently built winning argument. The Enforcer does not take the path of least resistance and is not intimidated by titles. His success is measured by his/her ability to build consensus, do what is right and move the firm in the direction of its strategic goals
Hitting your number or making partner often takes the front seat when evaluating business decisions. The Idealist’s role is to keep the firm on its highest plain, whether it is fulfilling the mission, living its values or delivering a brand promise. The Idealist is often the voice calling out in the desert. This role is often filled by the naïf, but s/he keeps the cynical person aligned with their more noble selves and keeps them from succumbing to greed and vanity. This role reminds us of why we are here. While perfection is unachievable, the Idealist calls us to the quest nonetheless.
Marketing is often accused of wasting 50% of its spend. That number may be generous for many firms. In a data-driven world, the Quant has become a very hot commodity. Leadership teams rightfully are demanding proof that the earnings they are allocating to marketing are paying dividends. Substantiating the investment should be low-hanging fruit. The Quant’s more important role is to enable all the other roles. To do this, the Quant must possess more than mathematical ability. He/she must be curious, client-centric and understand the inter-relatedness of the roles and other parts of the firm. Number crunching for the sake of number crunching is not useful. The result must be applied to learning and competitive advantage.
Often professional services firm marketers are relegated to “making things pretty.” The Creative role is not about making it pretty; it is about making it understandable. The Creative plays the trifecta roles of translator, storyteller, and designer. All three combine in a meaningful way to communicate to prospects in an attention-deficit-world how the firm is different and can help. You probably know a person like this. S/he is the go-to-person when a bad idea needs a huge shove to knock it off center. The skill set is unique and the person can often name his/her price.
Many partners think that they are filling these important roles, but they don’t because they either lack the time to focus or the skill. As a result, firms 1.) Don’t ask the tough questions, 2.) Take the path of least resistance and 3.) Waste marketing dollars trying to drive growth. Recognizing the importance of these roles and admitting that they are not consistently fulfilled is the critical first step in eliminating the wrong marketing jobs and adding more marketing value. How many of each of these roles a firm employs and how they are aligned within a firm are choices driven the firm’s matrix and level of investment. Either way, the roles need to be realized.
Skills In Question Three, we touched on some skills required within each bucket of marketing activity. Each bucket requires distinct skills to produce optimal results and drive the highest performance. Because the buckets are seen as cost centers (Productivity School), professional services marketing functions are generally pretty lean. As a result, marketers often wear many hats and have generalist-level skills. A traditional, small professional services marketing organization would look more like the organizational chart below.
In a larger firm with a matrix structure, a typical professional services marketing organizational chart may look more like the graphic below. The firm’s P&L assignment would dictate the presence and importance of practice, geography or industry roles. Business intelligence would probably not be a part of a Productivity School structure.
No matter what your current structure resembles, a heat map like the marketing capability assessment below can be a fast, inexpensive and effective way to get your arms around marketing skills and proficiency across your firm. This simple tool allows marketers to complete a self-evaluation, a manager to validate their self-assessment and others to quickly and confidentially share their perspectives. The tool can help you identify overall capability gaps and perceived vs. demonstrated individual skills that are required to achieve Marketing’s objectives.
- Determine what type of marketing leadership your desire.
- Assess the key marketing roles required for your firm.
- Assess the current functional capabilities of your team and combine with the mapping of your growth opportunities from Question Three.
- Begin aligning your marketing skills with your growth priorities and make choices about where to invest in capacity.
I encourage you to look at your future marketing organization in terms of your marketing school of thought and strategic objectives. Do not limit yourself to a traditional organization chart. Marketing and technology are moving too fast. The line needs to be focused on ideas that offer differentiated value and service delivery. Marketing should be structured and equipped to help the firm do what Peter Drucker says is its function, get and keep a client.
Here are 3 modern professional services marketing organizations. Integrated, Bifurcated-Centralized and Bifurcated-Decentralized.
Integrated Marketing Structure
Bifurcate-Centralized Marketing Structure
Bifurcate-Decentralized Marketing Structure
|A quick note on Martech in the Optimal Marketing Organization|
|Technology is dramatically shifting marketing, and most professional service firms are being left behind just as the broader market—both B2B and B2C—are applying decades-old professional services marketing tactics to their own. If your understanding of marketing technology is limited to Twitter or other social media, email and your website, it is time for you and your practice leaders to get engaged.|
The marketing landscape has evolved quickly in the past several years. Chiefmartec.com has estimated more than $21.8 billion of venture capital and private equity has been recently invested marketing technology companies. The latest count has more than 1,000 marketing technology firms providing unique value propositions around client experience, market understanding, service delivery, and marketing operations. According to Gartner, professional services firms spend 4.2% of revenues on technology. Your marketing team may be using upwards of 10-15 of these technologies already–yet have just scratched the surface of the strategic potential. Here is a small sampling of the key areas (from Scott Brinker of chiefmartec.com):
If you have a strategic marketing function, you are probably using many of these marketing technologies and garnering (and measuring) the business impact. You are seeing strategic results like:
If you are not seeing these results, it is time to shift gears and start thinking more strategically about the evolution of marketing technology and your ability to grow the business. The first step is to sit down with your marketing leader and understand your current state. The second step, as a leader, is to make sure that you are reinforcing a culture and capability to exploit these new technologies. Ask yourself if:
Marketing technology is moving quickly. Your client’s experience in the consumer world sets the expectation for how they want to be able to engage your firm. Dragging your feet or being ignorant of technology’s evolution will put your relationships and your firm at risk. Mobile devices, the Internet of things, cloud and apps are dramatically changing how clients will be interacting with your firm, your people AND your competition.
Your technology choices will fall out easily once you have identified your marketing focus buckets.
We have arrived at the fifth and final tough question.
5. How do we measure performance and keep the organization on track?
Finally, you have to decide how you are going to keep Marketing focused on its role in achieving your objectives and how you will reward its success. If you are building an optimal marketing organization guide using the Growth School of thought, your marketing objectives should reflect strategic impact. You should use revenue- and growth-oriented metrics. Suggestions include marketing qualified leads, pipeline contribution, and brand relevance. If the Productivity School guides your marketing approach, your measures should focus on cost, utilization, and productivity. Whichever school shapes your marketing, you will have a primary marketing objective and measure and all others metrics should support them.
ACTION: Select your primary marketing objective and measures.
Growth investment decisions can be difficult for professional service firms. They often involve opportunity costs, cultural evolution (or revolution) and emotional upheaval if partners feel that their wealth is being “redistributed.” Given the unique cultural and structural elements of professional firms, it is easier to take the path of least resistance. As a result, strategic choices often go unmade, and firms default to a “grow everything” approach. For marketing organizations that usually means a suboptimal structure, wasted resources and lower marketing ROI. Like your firm’s legacy and client relationships, marketing should be seen as a long-term investment. This investment creates the highest return when it builds brand relevance, pursues the highest growth opportunities and aligns the firm’s core capabilities with the client’s needs from beginning to end.
“Grow everything” is not a strategy. At this point, you are on your way to answering the questions that need to be answered to build the optimal marketing organization for YOUR firm. Don’t let agencies enticed you into believing that there is ONE optimal marketing strategy, marketing structure, or marketing mix for your firm.
Once your firm has become clear on the answers to these five questions, developing an effective and efficient marketing organization is straightforward:
1. Where exactly is our firm going strategically?
2. How do we expect marketing to help achieve our strategic vision?
3. What are the appropriate skills and roles required to achieve our strategy and expectations of marketing?
4. What is the gap between our current team’s capacity and that level required to achieve our vision?
5. How do we measure performance and keep the organization on track?
The leadership, functional skills, strategies, and tactics fall into place. With clarity, you can begin to align performance metrics, assess current strengths and weaknesses and begin prioritizing the people, process, and technology that you will need for your optimal marketing function. The final marketing function will be as specialized as your organizational structure, culture and budget will allow. That is how your firm can build the OPTIMAL marketing organization for YOUR firm’s needs.
The Illustrated Guide to Organizational Structures Hubspot’s EXCELLENT piece on Marketing functions,
Twenty Elements of a World-class Solutions Marketing Organization from Corporate Executive Board (Requires membership for full access)
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