Welcome to our newsletter for October - November 2004.

This issue focuses on the role of Marketing Partners in professional services firms, the difference between service and servicing in the banking sector and new research into law firm Managing Partner / CEO perceptions of brand.

Please forward this newsletter on to colleagues and friends who may also find it of interest.

As always, we want to ensure your continued interest in receiving our newsletter - so if you wish to unsubscribe, please email us at:
info@davismarketing.com.au.

Dianne Davis
Principal and Managing Director

www.davismarketing.com.au

Most accounting and law firms designate one of their partners to undertake the role of “Marketing Partner”.

In the vast majority of cases the partner is not a marketing professional, but someone with an interest in (or considered to have an inclination for) marketing.

The partner’s primary role is to be chief advocate and representative for the marketing function at partnership forums.

However, in general, firms are not optimising the role – usually due to one or more of the following factors:

Notwithstanding the above, the marketing function requires the support and counsel of a Marketing Partner within a partnership culture and structure (unless the firm’s senior marketing professional is actually a partner – but this is very much the exception than the rule; as well, it could be contended that it is not always in a firm’s ultimate interest to make their senior marketer a partner, because they may lose the edge, independence and objectivity that comes from operating as an employee still connected to the external marketplace).

There are a number of initiatives firms can take to ensure that the Marketing Partner role (and the relationship between this partner and the marketing function) is maximised. These include:

• Encouraging the Marketing Partner – both before and during his/her tenure - to undertake executive short-term marketing courses and a reading program of relevant marketing texts & publications, and to attend seminars / conferences on key marketing topics. This will increase knowledge and understanding of the discipline of marketing, and drive better decision-making and advocacy.
• Sourcing a marketing-experienced external mentor for the Marketing Partner.
• Allocating meaningful time to the role (and ensuring that the Marketing Partner is financially compensated for an internal activity that is effectively ‘non-utilisable’).
• Ensuring that the Marketing Partner and relevant marketing staff have regular focused weekly operational, monthly strategy and quarterly strategy review sessions.
• Making a commitment to the Marketing Partner role for a minimum period of two years, in order to build consistency and momentum.
• Where appropriate, the Marketing Partner and the firm’s senior marketing professional/s co-presenting major initiatives to the partnership to present a coherent case and respond to questions comprehensively.
  

Many professional services organisations are building their brand strategy off the back of quantitative research which – in essence – correlates a set of brand attributes and brand names, and plots them in relation to competitors.

While this approach does indeed provide interesting feedstock / input into a brand strategy, in itself, it is simply inadequate.

To provide a full and meaningful brand picture, quantitative research must be accompanied by qualitative research. Quantitative findings may flag the “what”, but qualitative research can tell you more importantly the “why” and the “how to”.

Moreover, most of the quantitative brand research that is being conducted in the sector has not – to date - focused in any meaningful way on internal perceptions of the brand, or the degree to which the brand is integrated into key strategic and operational processes (and thus aligned with the external brand).

This is a seminal issue: a growing body of academic thinking and research on brand (Aaker, Murray, Davis & Dunn) argues for first evaluating the internal landscape before surveying the external market - as the ability to credibly and consistently deliver against the brand’s promise and core attributes is contingent upon having the culture, values and infrastructure in place to do so.

Hence, quantitative brand research with external stakeholders using correspondent analysis methodologies (i.e. brand attributes plotted against certain brands), will not answer the following key questions so central to a differentiated and sustainable brand strategy:

Qualitative research (that considers both the internal and external brand perspective) can yield meaningful answers to these issues – especially if formulated by people who understand what is involved in taking research findings, and turning them into brand strategies and actions that can be effectively implemented and measured.

Many Australian and foreign banks are seeking to distinguish themselves on customer service (in Australia, St.George, Commonwealth Bank and Westpac have declared service-led strategies).

A paper by the Council on Financial Competition (“CFC”) on customer service trends and best practices in banking, highlights key ‘service’ challenges - and dilemmas.

In banking, the term “service” is used to encompass both account servicing (i.e. straightforward transactions - via technology - that customers pay for and expect), and customers’ responses to situations where either: (a) servicing fails to deliver what is expected; or (b) existing servicing fails to meet a new customer need (i.e. service).

Two major implications flow from the need to more clearly distinguish between servicing and service.

First, the majority of the banking sector’s investment in customer service is actually focused on servicing (i.e. things that happen all the time). But it is difficult to achieve effective ROI from these kinds of initiatives. Why? Because with few exceptions, “servicing” levels are taken for granted by customers and are so similar from bank-to-bank that they generate little real difference - with most improvements going largely unnoticed.

Secondly, “service moments”, while rare, are indeed what matter.

A customer almost never has a new need (only 1.4 times every 5 years according to CFC), but the best opportunities to grow a relationship occur when they do.

The challenge for banks, therefore, is making the transition from “servicing” to “service”. In this context, four trigger events are crucial:

• Service failures: When customers don’t receive what they expect on a service dimension that matters, the relationship is at risk. Because most customer interactions occur via technology, neither the bank nor the customer really know each other. In such an environment, it is hard for bank staff to know a problem exists, let alone be able to resolve it.
• New needs: In 1.4 out of every 203 servicing interactions, a customer experiences a new need. Meeting a new need with the right product is the ultimate service a bank can offer. But as “service” and “servicing” typically operate as essentially separate processes, banks struggle to move from routine servicing to the service trigger.
• Focused differentiation: When a bank outperforms its competitors in an area that customers truly value, market share can be influenced by educating customers to expect something they shouldn’t expect from competitors.
• New standards: Occasionally, a competitor will innovate and, in effect, change the playing field.

Based on extensive research across the banking industry, CFC have identified six best customer service practices:

In September, Davis & Associates, in conjunction with Galt Advisory, completed qualitative brand research with CEOs / Managing Partners from 13 leading Australian law firms.

Combined, the firms represent more than 50% of Australia’s Top 20 firms (in terms of revenue/size).

This research represents the first time that internal perceptions around brand-related issues across the legal sector have been explored amongst the CEO/Managing Partner segment.

Issues covered by the research include: importance of brand to a law firm; perceived benefits of a differentiated brand; law firms’ brand strategies (and major components of the strategy); measures/ metrics used to determine the effectiveness of the brand strategy; the areas/groups within the firm responsible for implementing brand strategy and setting the brand’s overall strategic direction; and the degree to which the brand is integrated with key strategic and operational processes.

For information about the research, or obtaining a copy of the research report, email us at:

info@davismarketing.com.au.

Our next newsletter will summarise some of the key highlights from the study.

As part of APSMA’s events program, Perks Davis (the strategic alliance between Davis & Associates and Perks Design Partners) will present a 2-hour lunchtime seminar on the topic of “The Art of Effective Tender Documentation” on Thursday, 21 October.

The event is being hosted by Sparke Helmore and will be held at their Sydney office.

Separately, Dianne Davis will chair the Marketing Panel at B&T’s Australian Advertising & Marketing Summit (26 October, 2004).