when the ‘production’ mindset fails.
by august j. aquila
price it right
there is no quick way to change from a production orientation to a marketing orientation.
more: 4 ways a production orientation can harm a firm | why choose a marketplace orientation? | why value pricing? | solving underperforming or dysfunctional partners | the 3 types of partners you need | how mps can make a real difference
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firm leaders need to embrace this new orientation and reward partners accordingly. to help you evaluate your firm see the table below.
(the above chart is based on one originally developed by robert j. listman, marketing accounting services, homewood, illinois: dow-jones-irwin, 1988, p. 22.)
this table is important because too many firms think that they are marketing-oriented when in reality they are product- or sales-oriented. you should look at each of the above functions and determine how you really feel about them and how well you execute them in your daily business life.
it will be a slow process because you are really changing the culture and individual attitudes in the firm. the following is a tested way that will help you make the change in your firm.
the most logical and important way to reduce a firm’s dependence on billable hours is to change the way fees are determined and partners are compensated. it is important to remember that when you calculate fees on the basis of how many hours go into a particular engagement, you are ignoring all external influences on the pricing equation. and unless you change the way that you are going to compensate partners and staff, not much will really change.
to find out how marketing-oriented your firm and its pricing strategies really are, complete the questionnaire below. similar to a balance sheet, your answers will give you a snapshot of where you are today. your goal is to lay out a plan to get you to where you want to be tomorrow.
a self-analysis exercise
1 – from your point of view, how would you describe your firm’s image?
2 – how would individuals outside of the firm, such as your clients, referral sources, and centers of influence, describe your firm?
3 – what are the unique characteristics of your firm?
4 – what marketing activities does the firm use to acquaint prospective clients and clients with the value of a service or benefits of employing the firm?
5 – how much time do you spend assessing the needs of clients?
6 – how do you determine future growth areas?
7 – how do you monitor client satisfaction?
8 – what leadership training do you provide to your staff and fellow partners?
9 – which of your services merit a premium billing?
10 – what percentage of your firm’s business falls under these services?
11 – what has been the demand for your various types of services?is partner and staff compensation tied to the achievement of the firm’s strategic and growth plans?
12 – is partner and staff compensation tied to the achievement of the firm’s strategic and growth plans?