what we’ve learned since accounting marketing was legalized by the u.s. supreme court in 1977

 

for good, bad or indifferent.

editor’s note: this article originally appeared in the september 1980 issue of the virginia accountant. it is one of the first articles – if not the very first article – on the advent of legalized marketing for accountants after bates v. state bar of arizona. it is as viable today as it was then.

by bruce w. marcus
professional services marketing 3.0

when, a few years ago, the codes of ethics were changed to allow straightforward marketing by profes­sionals, there came into play a new configuration of circumstances and activities that will reverberate throughout the accounting profession for years to come.

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for generations, concepts of probity have pervaded public accounting. accountants were to be not merely independent, but well beyond the fray of public quarrel of exposure. the sword of the cpa has always been independence and, it was long felt, independence is compromised by public debate. and now comes mar­keting, the crux of which is visibility.

now, after all these generations, public accountants may advertise, may compete for one another’s clients, may sing their own praises, and may discuss publicly differences that had once been solely family affairs. this is how marketing has come to public accounting.

no longer do accountants compete solely on the strength of their capabilities. today, every accounting firm — and not just the big eight – competes with every other accounting firm in its market area for clients present and future, for attention, for exposure. ac­counting firms compete with one another — presentation for presentation, press release for press release, speech for speech, seminar for seminar, and ad for ad.

marketing of sorts has always been inherent in building a professional practice in any profession. lawyers go into politics and always have. accountants have always joined organizations, given seminars, made speeches, distributed pamphlets and brochures. com­petition and exposure has existed, but discreetly; per­formed but not discussed.

now, it is flagrant — for good, bad or indifferent.

it poses an interesting problem. not only is total marketing a new concept for the accounting profession, but, in searching the annals of marketing literature, we find very little to guide us. the literature of marketing is heavy with tomes on marketing products, but virtually nothing on marketing services. and unfortunately, as many a professional is beginning to discover, there is a difference in the same thing. the proven techniques of marketing a product are not strictly applicable to mar­keting a service. what’s the difference?

in marketing a product, the product itself is the interface between the producer and the consumer. there may be a thousand people behind the production of a tube of toothpaste – but all the public sees, knows or cares about is the tube of toothpaste. in marketing a service, every individual who performs that service is the interface with its public; every individual who performs the service is, in effect, the product.

this makes it possible, in marketing a product to centralize and focus the marketing effort. once the product is perfected in terms of its potential market, the marketing people take over, to the exclusion of every­one else. the production people, the finance people, and the people in the warehouse are not involved with marketing. it is a separate and distinct operation.

in marketing a service, on the other hand, marketing is decentralized. every activity performed in an ac­counting firm, no matter how large or small, is visible and of concern to prospective clientele.

this has its strengths and its weaknesses, as apart from product marketing. a tube of toothpaste has a consistent quality that its users can rely on. there is no consistency, however, in the human behavior inherent in performing a service. one junior accountant having a bad day can destroy the effectiveness of a vast array of advertising public relations and other promotional efforts — an onerous burden placed on the professional. a new customer for a tube of toothpaste faces no personality conflict with the product; personal chemistry between an accountant and a prospective client can readily negate a great reputation.

on the other hand, the accounting firm that recognizes this distinction faces the opportunity to prepare and train its people appropriately to meet and deal ef­fectively with the prospective client, and to leverage the effects of a carefully built and nurtured reputation predicated on the tools of marketing.

and here we must look at the term “marketing” in a fresh context.

every marketing specialist has his own definition, and each can quarrel with the other’s choice of words. here again it’s too easy to fall back on the structures of product marketing for a definition — “to move the prod­uct to the consumer.” but if, in marketing a service, those who perform the service are the product how, then, can this definition apply?

perhaps the more appropriate definition of marketing, in this context, would be “to define and project the service, in terms of its users, in ways that make more prospective users want to do more business with you.”

how can this be accomplished within the context of the accounting profession? the answer may lie in another and more functional definition of marketing. marketing may be perceived as:

1. defining the market.
2. defining the product — the service — to meet the needs of the market.
3. defining the tools of marketing to be used to reach the market.
4. managing the tools of marketing.

in terms of marketing accounting services, let’s look briefly at how each of these elements apply.

defining the market

there are two points of view to defining the market for a professional service. on the one hand, a market can be defined in terms of a prospective client universe that can be served by a firm’s existing personnel, capabilities, and services. on the other hand, a market can be defined in terms of the marketplace itself-its configurations and needs – within the framework of a firm’s ability to adapt to those needs. the classic example might be the piano player in the cocktail lounge. some piano players will play anything you want to hear, so long as all you want to hear is “melancholy baby.” others recognize the tastes and demands of the clientele, and use their piano playing skills to play the kind of music the patrons want. clearly, its the second piano player who works more regularly.

so it is in defining a market. the professional firm has a choice of either scouting out the clientele for the services he has to offer, or, on the other hand, deter­mining the kind of services potential clientele need within the framework of his capability, so that he can adapt accordingly. it is the latter who is more likely to succeed in the market place.

defining the product

the diversity of accounting services offered by even the smallest firm is wide and flexible. if a major purpose of defining the market is to determine the needs of the market, adjusting the service to meet those needs is not only within the realm of possibility — it’s an absolute necessity.

even a small accounting firm with capable partners has the ability to amend its services to meet the needs of a larger universe of potential clientele. the need to do this becomes more acute, in view of the fact that many of the big eight firms are now foraging in market areas, such as small business, that had previously been con­sidered not cost effective. what this means to the smaller firm is that is must focus in areas, and on services, that are most demanded, in which there is the least com­petition, and are probably not cost effective for the local office of the big eight firms or other of its larger competitors.

the tools of marketing

the tools of marketing are those disciplines that serve to project a firm’s capabilities to its prospective clientele. normally, these tools include:

• market research
• advertising
• public relations
• brochures and newsletters
• speeches and seminars
• direct selling

each of these disciplines has its place in a total marketing mix. none by itself can be considered marketing. each supports, enhances and magnifies the others.

at the same time, it should be considered that not all of these tools, however effectively used, are useful for every professional firm. its the mixture, the proportion with which each is used in a total mix, that count.

and each must be used realistically. advertising may be impractical for some firms, and a most effective tool for others. public relations, or at least the publicity aspects of public relations, may have very little to offer some firms.

in this context, it’s less likely that the financial editor of a major big city newspaper will call on a small local practitioner for tax advice than on an expert from a local office of a big eight firm. on the other hand, with some effort and skill in dealing with the press, it’s not all that unlikely.

a good article in a local accounting journal or trade publication written by a small practitioner is very much within the realm of possibility. when the article is reprinted and distributed to prospective clientele, it serves as mighty a public relations — and overall mar­keting — purpose for the small practitioner as it does for the big eight firm.

brochures in four colors, so effectively used by large accounting firms may not be as cost effective for the smaller firm. but a simple personalized newsletter can be extremely helpful. again, an inexpensive reprint of an article in a local accounting journal can sometimes be as effective as a brochure.

the point is that no single marketing tool is beyond the scope of any professional firm, no matter what its size, if it’s used intelligently, imaginatively and as part of an overall marketing plan.

managing the tools

managing a marketing effort is as important as managing any other segment of a business or practice. it must be planned, budgeted and monitored. it must have clearly defined objectives that are realistic in terms of the firm itself and its ability to perform. it must be cost effective. merely to be able to afford a full page ad in the local newspaper is not the same as having a potential for that ad to produce results.

and the marketing program should be professionally managed. this is not to say that an outside firm is always necessary. the term “professional” is used here in the context of skill and adherence to practices that are consistent with those of the discipline. for example, a poorly written article, no matter how sound its content, will succeed in furthering no marketing aim, and will in fact be counter-productive.

in keeping with the definition that in marketing a service everyone who performs that service is, in effect, the marketing effort, perhaps the most important aspect of marketing professional services is to realize that the essence of marketing is the best performance of the service. perhaps the greatest myth of marketing per­petuated by non-professional marketers is that mar­keting will sell anything. it will not. the most expensive, sophisticated marketing program will not convince a prospective client that a poor accountant is a good one. it will, however, project the capabilities of a good accountant to a larger prospective clientele.

a last major point. in marketing a service, a major consideration is frame of mind. in the highly competitive atmosphere generated by the change in the canon of ethics, every professional must recognize that in every relationship with a client or prospective client, in every contact, in every activity, there is an element of practice development. marketing functions best in an atmos­phere in which the concept of marketing is pervasive. every task for a client that builds confidence in a sustained relationship must be perceived as a marketing effort. every business discussion with a prospective client is a marketing effort.

marketing is not merely an external discipline im­posed upon a practice as it would be on a product. the marketing effort for a professional is inherent in the practice itself.

related: who’s better at marketing? • lawyers or cpas? • even a random disaster can be controlled with risk management • managing risk in client relations • your clients love you? what if you’re wrong? • the three degrees of risk • four essential habits for building client trust • the nine hallmarks of a marketing culture • the four cornerstones to building a marketing culture • getting the client is only half the battle • practice development: it’s not rocket science • nine fundamentals for a healthy marketing culture in an accounting firm •

bruce w. marcus is a pioneer in professional services marketing and coauthor of “client at the core.” this is adapted from his new book, “professional services marketing 3.0,” available for purchase here.

copyright. used by permission.

posted on january 26, 2013