Presentation to the HKICPA on marketing accounting firms
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Transcript of Presentation to the HKICPA on marketing accounting firms
Marketing Professional Service Firms
Presented by : Robert Sawhney: Managing Director, SRC Associates
Ltd
Venue: Auditorium, Hong Kong Institute of CPAs
Date: 3rd March 2010
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Disclaimer
The materials of this seminar / workshop / conference are intended
to provide general information and guidance on the subject
concerned. Examples and other materials in this seminar / workshop
/ conference are only for illustrative purposes and should not be
relied upon for technical answers. The Hong Kong Institute of
Certified Public Accountants (The Institute), the speaker(s) and the
firm(s) that the speaker(s) is representing take no responsibility for
any errors or omissions in, or for the loss incurred by individuals or
companies due to the use of, the materials of this seminar /
workshop / conference.
No claims, action or legal proceedings in connection with this
seminar/workshop/conference brought by any individuals or
companies having reference to the materials on this seminar /
workshop / conference will be entertained by the Institute, the
speaker(s) and the firm(s) that the speaker(s) is representing.
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The State of Play
GFC
Demanding clients
Regulation
Competition
Globalisation
Consolidation
Social media and Web 2.0
Talent retention and management
According to Ron Baker
The Firm of the Future
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How PSFs are Different!
Product resides in the structural, social, and intellectual
capital of firm – knowledge and learning key
Key marketer is the professional who interacts with client
Differentiation is harder to achieve – ‘we do better audits’
Branding at the individual, practice group, and firm level
Marketing and BD coupled together – misunderstanding?
Professionals don’t take easily to being ‘managed’, strategy
bottom up and involves all or no one (are they interested)?
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And the difficulty of…
Fundamental misunderstanding by professionals of what
marketing is
Growth of 10% per annum, who needs it?
Strong resistance by seniors
Belief in conflict with professional ethics and association
guidelines
Combined role of producer/manager
Short term orientation and lack of longer term strategic
thinking
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Marketing and client value
Firstly – what marketing is not:
Promotion
Clever logo and new brand name
Run by the marketing/BD people
Something that can be turned on and off according to
prevailing conditions
In its entirety, something that cannot be measured using ROI
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Cont’d
What it is:
A business process about creating client value
A firm culture that has the most significant impact on firm
performance
The guiding force for strategy and strategic management
The bed rock of firm performance (market orientation)
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Me arguing with someone!
http://www.thenewlawyer.com.au/article/firm-marketing-
inspires-email-vitriol/493687.aspx#comments
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We are now in the ‘value’ era
Clients want their PSF to be more commercially oriented and
demonstrate the value they provide (i.e. cost savings, risk
mitigation, business improvement)
According to HBR (March 2006): value propositions should
have a resonating focus with clients that identifies a few key
points of difference (with points of parity)
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What Professionals Really Sell According to research conducted at the Centre for Management of
Professional Services (Said Business School, Oxford
University), a firm's ability to differentiate itself and create a
sustainable strategy relies on four factors:
· Expertise - knowledge and experience
· Relationships - clients and other stakeholders
· Reputation - expertise, experience, and engagement
· Service - processes, services, and engagement
According to the authors, a sustainable strategy can be built around
these four factors whereby they create a virtuous cycle of
innovation, organisation learning and knowledge management, as
well as access to new markets. The authors' research
demonstrates clearly that for a firm to create differentiation that
means something (i.e value perceptions to client), a firm must
spend time on factors aside from technical quality of work.
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What marketing really is: Bed rock of firm performance
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Client value, satisfaction and firm performance
Market based strategy and strategy implementation (based around value for clients)
Client orientation
Competitor orientation
Inter-functional
coordination
What Does it Mean to be Market Oriented?
Marketing is a business philosophy that puts creating and
delivering customer value at the heart of all that an
organization does
It is an organization culture that acquires and disseminates
information-cross functionally and across hierarchies, and
acts upon that information
This sharing and information coordination tolerates no
functional silos
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Why firm culture is so important
The recent review and findings by the Accounting & Corporate
Regulatory Authority of Singapore (Acra) that accounting firms in the
region are struggling with audit quality should make firm leaders sit
up and take notice.
Research has shown that auditors are more likely to accept risky
client assignments if they believe it would lead to further work
In a paper published in Behavioural Research in Accounting by
Jenkins et al (2008), the authors set out a number of areas whereby
culture can impact a firm’s governance and the role that seniors
within the firm play through their behavior such as mentoring, client
interactions, communication, and social influence. They highlight a
number of studies and situations whereby firms have engaged in
unethical actions (lowered audit quality) due to the cultural
conditions of the firm. Primarily, those cultures that value revenue
generation over all other activities tend to be at most risk
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What should you strive for? (David Maister)
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Quick Case
Harrex Group, NZ (source: J of Accountancy, 2008)
Founded in 2007 by Brendan Harrex, first chief value officer
at his former firm
He says focus on time and cost only creates illusion of
managing a PSF
What really matters is value creation
No more hourly billing, a change of culture
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Cont’d
Key Performance Indicators for Harrex:
* Ability to think strategically on behalf of clients
* Client Communication
* Delegation
* Turnaround Time
* Client Feedback
* Effective Listening and Communication Skills
* Knowledge Elicitation/Coaching
* Risk Taking, Innovation and Creativity
* Continuous Learning
* Passion, Attitude and Commitment
* Team Player
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Thank You!
If you want any of the full references for work cited or have
any questions, please feel free to contact me:
[email protected], www.srchk.com
Blog: www.marketingasia.typepad.com
Twitter: http://twitter.com/robertsawhney
LinkedIn – Robert Sawhney
Our New Book: published by Lexis Nexis in 2009) available
from LN in HK and www.amazon.com.
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