The past six months have been extraordinary. Firms have gone from having surplus work to surplus staff; from coping with staff shortages to a shortage of ‘active’ clients; from investing in growth strategies to focusing on ‘weathering the storm’. By Joel Barolsky, Beaton Consulting

The brand funnel concept

The rapid downturn has inevitably lead to budgetary pressures and a focus on reining in costs. Marketing and business development (BD) professionals, who have seen their budgets expand over the past few years, will now have more limited resources to spend on marketing, brand building and BD activities.

Consequently there is a greater imperative to ensure that these resources are employed in the areas that will provide the biggest impact in attracting and retaining clients, in the short and long term.

One way of calculating where you should concentrate your resources to get the biggest ‘bang for your buck’ is through analysing your firm’s brand funnel.

Figure 1

In our Beacon research last year, we introduced the brand funnel concept (see Figure 1) which tracks the process a client goes through when buying professional services and highlights the ‘conversion’ rate from brand awareness through to consideration, purchase and finally loyalty. It measures how well the target firm converts its brand presence into leads and subsequently paying clients, and benchmarks this conversion rate against competitors.

1. Prompted awareness – Fundamental to any purchase decision is that clients must first be aware of a firm. The level of brand awareness that a firm has in the market will determine the total pool from which any future work will flow. Maximising your brand awareness in your target market is the first critical stage in the brand funnel. In Figure 1, the firm’s prompted awareness is 69 per cent, compared to a market average of 70 per cent. In other words, 69 per cent of the market is aware of the firm and 31 per cent is not.
2. Consideration – Once a client is aware of your firm and other firms in the market, they must then decide which ones they would actually consider using for their professional services work. In figure 1, 36 per cent of those who are aware of the firm would consider using it, compared to a market average of 32 per cent. The consideration decision is often based on a range of brand associations or attitudes buyers have toward each brand in the market. Maximising the number of clients/prospects who would consider using your firm is the second stage in the brand funnel. Research we conducted in 2008 among over 10,000 buyers of professional services found that on average, only around 20 per cent of buyers who are aware of a firm would actually  consider using that firm. This significantly narrows the brand funnel near the source, limiting the number of buyers for whom a firm can become the primary provider.
3. Any use – Consideration of a firm leads to actual usage, whether it is a one-off job or a continuing relationship, and this is the first step towards achieving growth for your firm through newly acquired client work. Maximising your number of clients will increase your potential to move into the final stage of the brand funnel – primary provider status. In the diagram, 50 per cent of those who would consider using the target firm have in fact used them in some way over the past 12 months, compared to a market average of 48 per cent.
4. Most use – At the end of the day, professional service firms receive the best value from their loyal clients (more work, more easily won, lower cost-to-serve and word-of-mouth referrals, all of which result in organic growth for your firm). In Figure 1, 47 per cent of those who use the target firm have that firm as their primary provider, compared to a market average of 51 per cent.

Each stage of the brand funnel builds on the previous stage. The aim is to select activities that will maximise your firm’s
potential to convert potential buyers through each stage, from awareness through to most usage.

What happens when firms get ‘blocked’ in the brand funnel

The effect of a blocked pipe – reduced flow – is the same no matter where the obstruction is. However, if you want to fix the problem, you do need to know where the blockage is.

Like a blocked pipe, a weakness at any stage in the brand funnel can mean the flow of buyers from prospect to client is disrupted. Issues at the top of the funnel relate to brand building. Issues in the middle concern sales and BD. Issues at the bottom are to do with client relationship management. In understanding these weaknesses, firms can then concentrate their limited resources in the area that has the potential to provide the biggest impact.

The following examples of brand funnels demonstrate what happens when firms get certain types of blockages.

‘Who the heck are they?’

Firms with a blockage at the awareness stage just aren’t getting enough ‘water’ from the source. This may result from having a smaller client base, or the ‘invisible’ nature of their work, but whatever the reason, it makes organic growth tough. Firms with this blockage need to engage in brand building activities. We’re not necessarily suggesting a national TV campaign, but targeted activities that will increase the profile of your firm in your target market.

Figure 2

Upon learning of their poor brand awareness result, one midtier law firm commenced a targeted profile-raising strategy in key markets. This strategy included increased media mentions, selected advertising, sponsorship of key events, an upgraded Google-friendly website, and support for senior partners to speak at major conferences and publish in relevant journals. Measurement of brand awareness reflected an 11 per cent improvement in 12 months but
was still behind the market average, demonstrating how difficult building awareness can be.

‘What do they do?’

Firms with a ‘consideration’ blockage are typically struggling to demonstrate their relevance to buyers. Maybe the firm was known in the past for a specific expertise and the market hasn’t caught up with the breadth of services they offer now; or perhaps it has a strong brand name but the market doesn’t actually know anything about the firm. In any case, there is usually an information deficit about what the firm does that needs to be rectified.

Figure 3

A national accounting firm with low consideration sought to address the blockage through an ‘expertise’ campaign led by the marketing team.

This campaign was principally about providing the incentives (carrots and sticks) for the firm’s leaders and rainmakers to regularly get out of the office to talk to prospects and potential referrers about the firm’s expertise and how it could address client needs. Through subtly educating the market about the firm and showing off its know-how, the firm expected to improve the conversion from awareness to consideration.

‘They’re not for me’

Firms that fail to convert buyers who would consider them into clients are usually not putting their best foot forward in the salesprocess. They may have trouble communicating the value they’ll bring, or they may emphasise features of their service that aren’t selling points for buyers.

Figure 4

Failings at this stage can be at a firm level and an individual level. Blockages from consideration to use often occur at those firms that do not have user-friendly systems and processes that streamline the sales effort. Blockages can also be a result of client-facing staff lacking the knowledge and skills required to get a potential client over the line. This leads to a lack of confidence and increasing resistance to ‘sales’.

One leading engineer consulting firm employed a specialist BD coach to help its senior engineers become better at identifying leads and converting them into paying clients. While the coach did not meet the prospects directly, he helped the practitioners overcome ‘call reluctance’ – the biggest source of sales failure – and held their hands during the various sales conversations. Their bid-win strike rate improved by over 20 per cent as a result of this intervention.
With the challenging economic conditions, firms are going to have to be more proactive in securing work. This means having systems and processes that support a technically skilled workforce that can deliver on sales in a highly competitive environment.

‘They’re ok for some things’

The objective of any professional service firm should be to become a client’s primary provider. Why? Because it tends to be the most profitable position, due to a lower cost of acquisition for each project and the streamlining of processes, and it‘s also the most enjoyable due to the strength of the bond that is built up over time. However, most firms wonder at some stage why certain clients only use them for a specific service and go to competitors for other work, or use them once and not again.

Figure 5

There are a number of reasons why a firm has a blockage in converting occasional work into primary provider work. It may be due to sub-standard performance; it may be price. However, from our experience, the principal reason is the lack of strong personal relationships between the client and the firm. Firms that make a concerted effort to build strong relationships with their clients are generally rewarded with increased volume and quality of work received.

One patent attorney firm, with a low ‘Most use’ score, decided to provide all of its partners with cross-selling training. This first started out with making all partners aware of what everyone did and their special areas of interest. Secondly, it explored the key obstacles to cross-selling and developed plans to overcome them. One area that received a lot of focus was the lack of trust that some partners had of their colleagues, i.e. they were uncomfortable referring ‘their’  client to a person they were not confident in. Thirdly, the training focused on creating opportunities to introduce others and communicating the benefits to clients of using multiple services of the firm.

Conclusion

Every firm will have different strengths and weaknesses throughout the stages of the brand funnel. The critical thing to remember with the funnel is that your firm is only as strong as its weakest stage. Identify where there are particular conversion issues for your firm and focus your marketing, brand building, BD and CRM activities appropriately to widen your brand funnel at the right spots. That way you can stretch your budget to make the biggest impact on  attracting and retaining clients, in good times as well as bad.

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WITH MEL CHEE, DAVID COOPER AND MAIA GOULD

Beaton Consulting is a leading management consultancy, focused on supporting professional service firms in Australia, New Zealand and the Asia-Pacific region.