| What
do the mid-tier accounting firms have in common?
Everything. And that's the problem, argues Dianne
Davis.
There
is no sustainable difference between firms like
PKF, Bird Cameron, Pitcher Partners, Grant Thornton,
BDO, William Buck or Horwaths.
No
firm stands out or really stands for something.
The
mid-tier accounting sector is positioning itself
around more face-to-face partner time with a client
than the client is likely to experience with a
Big Four firm, more competitive fees and being
an "adviser of choice" to the SME market.
At
a time when there is unprecedented potential for
growth, the sector is characterised by low brand
awareness and weak or confused brand differentiation.
No firm has managed to positively differentiate
itself in a crowded market.
Differentiation
is one of the cornerstones of effective branding,
particularly within professional services. A strong
brand is what distinguishes an organisation so
that they effectively own distinctive positionings
and attributes.
Good
examples include Macquarie Bank, which has become
synonymous with being entrepreneurial, Gilbert
+ Tobin with being innovative and Deloitte with
putting people first.
Differentiation
is also a strong driver of a brand's ability to
command premium fees and attract quality recruits
and co-branding partners.
Yet
partnerships in professional services firms often
maintain that differentiation really only applies
to retail brands. Nothing could be further from
the truth. This attitude fails to recognise a
fundamental market reality.
Brand
is a sustainable source of differentiation in
a professional services environment, where products
and technologies are effectively commoditised
and quickly replicated and surpassed.
Moreover,
creating and maintaining a strong internal culture
which supports and reinforces behaviours aligned
to the brand's core values differentiates a professional
services brand and its people.
Macquarie
Bank, McKinsey, Deloitte, JB Were, Goldman Sachs
and Minter Ellison are all good examples of strong
internal cultures effectively contributing to
strong brand positioning and recognition.
Nor
is size critical. Many of the most strongly differentiated
brands are not the largest players in their industry.
Virgin (especially Virgin Blue), ING, again Macquarie
Bank, Deloitte, Ferrier Hodgson and St George
clearly demonstrate this.
Where
size does need to be countered by the mid-tier
accounting firms is in their ability to project
the brand in the marketplace on a consistent basis
to generate continuing levels of awareness with
key target audiences. This requires investment
and the mid-tier players simply don't have the
balance sheet of the Big Four.
But
they could be more effective by investing in marketing
and brand communication tools which provide superior
reach, greater longevity, leveragability and measurability
to build and sustain awareness.
Examples
include public relations, partnering or co-branding
with key business organisations or thought leadership
initiatives.
Medium
to smaller professional services firms who have
done this particularly well, include Ferrier Hodgson,
Gilbert + Tobin, Arnold Bloch Liebler and Korda
Mentha.
Too
many mid-tier firms believe brand is really logos,
brochures and promotions. They haven't yet recognised
that brand is about everything connected to the
essence of the firm; its people, physical visual
presence, reputation, associations, logo, endorsements,
client perceptions and the sum total of its communication.
Nor
is there any real understanding of the business
benefits that a strong brand delivers. It enables
a firm to successfully introduce new products
and services to a loyal client base, to command
premium prices and to be attractive to potential
licensing candidates and alliance partners. Equally,
it reduces vulnerability to price wars. Organisations
that have nurtured their brand internally and
externally, like Macquarie Bank and Allens Arthur
Robinson, have little difficulty attracting and
retaining the best and brightest people.
Shareholder
and stakeholder demands for greater transparency
and independence in the auditing process, coupled
with a strong focus on good governance, represent
significant opportunities for mid-tier accounting
firms.
Unfortunately,
none have managed to differentiate their brands
in the marketplace as alternatives to the Big
Four.
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