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The Marcus Perspective

What Can Product Marketers Teach Us?

By Bruce W. Marcus

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Itís been suggested by several readers that our orientation toward professional services marketing, as opposed to product marketing, is a prejudice. Admittedly, itís at least a bias against a pervasive academic view that the techniques of marketing a product apply equally to marketing a professional service. And indeed, the most successful professional services marketers tend to look to other professional services firms for answers and the best ideas, as well as for validation of their own ideas and processes.

Still, it would be foolish to automatically preclude any idea thatís been forged in a marketplace of ideas. In a rational world, we take ideas from any reasonable place, accept the good ones, and eliminate the ones that are bad or not applicable. That means that are things to be learned by professional services marketers from the Toyotas and Microsofts and Dells of the world.

To know what can be learned from other companies, particularly manufacturing companies, itís important to understand the profound differences between a professional service and a product company. A manufacturer, for example, can innovate with new products, new styles or new models. Obviously, an accounting or law firm cannot, at least within the framework of the basic accounting or legal services. The rules are the rules and the accounting principles are the accounting principles and the law is the law. And while many accounting regulations and laws allow for some small latitude and interpretation, they do not offer room for a great deal of innovation.

But there are indeed management and marketing lessons that can be learned, particularly in the realm of understanding and reaching out to a market. Where the manufacturer can come out with a new product model, the accountant or lawyer can come out with a new service within the framework of the practice that fits the need of the clientele. The professional can also find new ways to define his or her service in terms of the needs of the marketplace. This, perhaps, is where the parallel between the product manufacturer and the professional is found.

But there are other things one can learn from the Toyotas and the Microsofts and the IBMs and the Dells. For example:

  • Manufacturers know how to listen to their markets ó to understand what their customers want (and often, what their customers can be sold). Professionals (with an increasing number of exceptions) seem reluctant to do that. ďWe know what they want, and we do what we do,Ē they seem to be saying. Manufacturers, on the other hand, understand that the money spent on market research is rarely wasted, and often produces surprising but useful results in determining what markets really want.
  • Manufacturers understand that people buy what they need, but that they can also be sold what they can be persuaded they need. Selling, they know, is not demeaning ó itís a process of bringing the product or service and the market together, to the benefit of both buyer and seller. A lawyer canít ethically persuade a client to litigate where there is no issue, nor can an accountant ethically persuade a client to have an audit where there is no business or regulatory need for an audit. But both professionals can sell ó and sell competitively ó when a valid need is perceived, or when there is a differentiation from one firm to another in the way the service is delivered.
  • Manufacturers know how to innovate: new products, new designs, new appeals to different markets. Accountants and lawyers deal with material thatís largely predefined ó the regulations, the processes, the laws. Very difficult to innovate, because change in the basic substance of a profession is not in the hands of the practitioner. But, as many a successful accounting or law firm has learned, there are other ways to innovate. For example:
    • There are new services to be offered, such as outsourcing, high tech law, and so forth; and new markets to sell to. Todayís business demands more consulting input from its professionals than the traditional services. Winning firms supply that help to clients, even within the uncertain arena in which attempts to separate consulting from audit services, or to deny law firmsí multidisciplinary services, are rife.
    • There are innovative marketing techniques that can be drawn and adapted from the experience of the non-professionals. Innovative ways to use the Internet, for example. Sophisticated ways to identify markets and market needs. Target marketing. List management and direct mail. Virtually all of these techniques can be adapted to the professional services firm.
    • There are new ways to present traditional services. No, not artificial packaging, but presentation of the reality of services in terms of the needs of the marketplace.
  • Successful manufacturers know the differences between market segmentation (niche marketing), target marketing and mass marketing. And they know that they are not mutually exclusive:
    • Market segmentation, they know, breaks down a market by common elements, usually predicated on specific and definable needs for a product or service. A market segment has a common demographic, or a common need for a specific product or services. Niche marketing is a parallel ó but not necessarily the same ó structure. It takes the common need for a particular product or service and targets that group with just that product or service.
    • Target marketing narrows the focus of the market, sometimes to a precisely defined segment, sometimes to an individual or a single company. It goes after a specific individual or company, rather than a group or a class.
    • Mass marketing sells the broader market, which may include many targets and several segments. Itís frequently the backdrop ó the institutional sell ó that supports the program to the market segment or the target.
  • Viral Marketing, a new term for a traditional form of marketing thatís predicated on word of mouth, is currently becoming an integral part of product marketing. Itís aided by such factors as the technical ability to identify groups with a common interest, and to seed those groups with an idea that spreads within the group. The secret of success in viral marketing (in which ideas spread like a virus) is to have a sound idea or concept to begin with, to identify the right group, and then to engender the word of mouth drive to spread the word. Product marketers are getting good at this. Professional services marketers could get better.
  • Distribution is a crucial factor in product marketing. In many companies, itís a science. For the professional firm, distribution in the usual sense seems not to exist. But it certainly does, if you consider such factors as allocation of human resources to serve a particular practice. And those human resources are a function of geography, skill, talent, and allocation of time.
  • Cost management is virtually a religion for manufacturers. Professionals, whose cost structures are entirely different, rarely have a true sense of cost. To the professional, if income exceeds expenses, thatís profit. But even accountants, who teach the process to their clients, and understand the difference between expense and cost, just donít often practice what they preach.
  • Manufacturing companies are constantly exploring new and more efficient ways to manage. Professional firms continue to reside in the traditional partnership structure, even in the face of a drastically changing business world. Re-examining the partnership structure to find more effective ways to manage a firm and its business should be a given in todayís environment. Some firms are learning, for example, that not all skills reside in people who are partner material. The old ďup or outĒ philosophy, theyíre learning, is wasteful, if it costs a firm valuable skills. The collegial aspects of partnership are not always the best way to get fast decision-making and action on decisions.
  • Manufacturing companies seem to be more efficient at managing information and communicating internally than professional firms. This capability is increasing in importance because of both the competitive needs that are best served by understanding and managing knowledge, and by the profusion of data made possible by computers.

There was a time, at the beginning of the marketing era (just post-Bates), when understanding the difference between marketing a product and marketing a service was important. While those differences still apply, there are values in seeing the parallels.

There is indeed, then, a great deal that professional firms can learn from the Toyotas of the world. The question for the professional firm is whether to anticipate the answer and be on the leading edge, or to let the world teach you the hard way. Listen, then, to all sources of good ideas.


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