marketing sector strategy

      sector focus:
     Hocus Pocus?
                                              Many law ...
“Here at Blenkinsop, Mitre and
Charleston we have expertise in all aspects         pErformancE mEasurEs
of legal, tax advi...
marketing sector strategy

                                                                 client is actually operating...
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Managing Partner Jeremy Knott - Sector focus


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Managing Partner Jeremy Knott - Sector focus

  1. 1. marketing sector strategy sector focus: Hocus Pocus? Many law firms are placing more emphasis on the key sectors they serve in marketing initiatives. Jeremy Knott, head of commercial initiatives at the institute of chartered accountants asks how the success of such a strategy can be measured. 50 managing partner, may 2010
  2. 2. “Here at Blenkinsop, Mitre and Charleston we have expertise in all aspects pErformancE mEasurEs of legal, tax advisory and consultancy services, and our 139 professionals in our Some typical performance measures for sector marketing include: four offices focus on 19 industry sectors.” Ok, so maybe the above firm • Quality of sector plan and quality of action/follow up; description is imaginary, but how many • Number of new clients won; firms claim to focus on a wide range of • Value of cross-selling achieved in sector key clients; diverse industry sectors? Looking at the • Overall revenue and profit growth from chosen sectors; top 10 UK law firms the number varies • Use of sector knowledge internally and externally; from seven to 22 sectors, with an average • Quality/ number of sector analyses, number of problem areas identified and of approximately 13.1. That may be fine actions recommended and delivered; if you are a top-10 international firm • Quality of internal relationships and the ability to encourage action; with the scale to specialise in different • Ability to interact with clients and external parties; industry sectors, but how relevant is the • Number of sector issues resolved; approach for the rest of us? • Number of new sector/client opportunities identified and success in First, let’s consider why so many galvanising fee-earners into action; firms have rushed into sectors. • Number of ‘hot topics’ launched and used by client teams and others to generate new business. inside out or outside in? Many large law firms established ‘sector focus’ years ago and with good intentions. example, some firms have analysed the under the skin of the issues the sector After all, their clients operate in a specific profile of their recent matters and decided is facing and being able to anticipate sector (well, most do – conglomerates are that they therefore have experience in problem areas and provide solutions tricky to classify), so it gives the firm the these sectors. Strictly this is true, but it’s to clients. For this reason, several firms opportunity to get to understand a sector, limited to the transaction. A true sector have chosen just four or five sectors to which should mean that they understand approach runs across all disciplines, but specialise in. After all, it’s easier to build the competitive issues, the structure and it doesn’t necessarily require reorganising a reputation for working in a particular changing dynamics and most importantly, the firm along sector lines. This step is industry sector than in a full-service where they can best advise on them. But only relevant to very large firms, like the area rendering, which nearly every firm all too often this is based on an internal large accountancy firms, who have created provides. This is easier for niche firms analysis of current work by a client divisions large enough to house advisors that operate in a restricted number of that can be seen to justify some claim from every discipline. industries already. However, it can equally to ‘know’ that sector. How many firms There is no doubt that aligning apply to firms with a broad range of actually determine which sectors they the firm to the client’s business can clients. It just means that the chosen want to focus on by looking externally – help break down silos and bring sectors may only account for around to understand which sectors are growing, commercialism to the advice given. It 70 per cent of the firm’s business – the have many issues to resolve and where is also something clients are repeatedly remaining 30 per cent can be left alone. their particular expertise can help them? calling for. Now the question is how Furthermore, the key players in a many sectors to choose, and which ones. sector often share information among Route to market or structural change? themselves, so ‘word of mouth’ marketing The large accountancy and consultancy numbers can be very effective. Of course, this firms were the early adopters of the sector If the average for the large firms is 13, can also be supplemented by PR in the approach back in the 1980s, but they had what is the right target for mid-size firms? relevant trade press, which goes beyond the scale to organise themselves around Undoubtedly, if you analyse the profile the legal department or the finance sectors as well as the practice areas within of clients a typical firm takes instructions team and reaches many of the business each sector. Performance was measured from, there will be many sectors managers and board members where a for each of these ‘divisions’ rather than by represented, but that doesn’t automatically deeper corporate relationship can flourish. technical specialism, but how many other mean the firm should choose all of professional-service firms have followed them. Management often confuses a Why is it so difficult? suit? Most law firms that have adopted a proactive approach with a reactive one. There are many obstacles to overcome sector approach still measure performance A mid-size firm doesn’t typically have to make any sector orientation more by practice area/legal specialism. A sufficient resource or strength in depth effective, however. These include few have gone as far as reorganising to focus on more than a limited number the resistance of fee-earners, who themselves structurally around sectors. of sectors. That doesn’t mean it will turn are naturally risk-averse and quite The rest have seen sectors as a route to away business from other areas. A sector comfortable being organised in their market – a ‘marketing thing’ – and many approach means being proactive with a own technical specialism, but there is just pay lip service to the concept. For select number of sectors. It means getting also the problem of management. The 51
  3. 3. marketing sector strategy client is actually operating in. Examples to speak at such events can help raise the fiGurE 1: matrix approach of some typical performance measures firm’s profile and open doors to targets that can be used are listed on page 51. to avoid the need for cold calling. Yet another potential problem area is Commercial finding the right calibre of partner to take Benefits and downsides a leadership role for a sector. The first On balance, the pros well outnumber Hotels & Leisure Life sciences Human capital step is to define the role of the sector the cons. The major benefits of a sector leader/head and that of the supporting approach include: Corporate business development manager. Tax • A greater emphasis on the clients’ a structured approach businesses and their competitive Real estate One of the critical success factors is environments enables professionals appointing a senior partner to champion to understand the issues, be proactive the approach – one that will review and speak the client’s language; progress against the plan, unblock • These market insights enable a firm Client base/ markets internal barriers and drive new initiatives. to spot opportunities to advise their This partner should also conduct regular client across a range of service areas; sector reviews (see table below): • When targeting new clients the sector Vertical lines are sectors. Another important step is then to approach can inform the firm who Horizontal lines are practice areas. galvanise general internal communications the key players in a sector are and to support this development and trumpet priorities can be readily established; successes. Some firms have even put • Any potential commercial conflicts existing management structure along in place a reward structure to celebrate are more easily resolved following service lines often resists such change successes and raise the profile of each the sector approach, as the market as it threatens to undermine its own sector internally. knowledge enables the firm to take power base. This is the same as the Training staff to be able to access an informed view about which way that different locations can upset and interpret market information is also clients have the greatest potential for the simplistic single service-line model. important. The web provides a great deal the firm overall and thus removes However, these can easily be overcome of market and client information, and the the silo practice area-based mentality; using a matrix approach (Figure 1). trade press is also a good starting point, • PR and marketing efforts can Performance management and often providing RSS leads on specific be directed at the key business sectors measurement is another potential clients and targets, market surveys and using the relevant business press, rather problem area. To establish a monitoring relevant studies. Equally important are than the general professional titles. system every client has to be tagged to the relevant trade associations that hold This will avoid significant wastage and a sector, so that fees and profitability by networking and training events. Offering allow the firm to be associated with client, and by sector, can be measured particular sectors quickly; and acted on. Then there is the problem • When pitching for new business the of sector definition. For example, is sEctor rEviEws sector approach makes it far easier a real-estate client involved in a hotel to assemble a pitch team, gather construction project with another Regular section reviews should: relevant credentials and tailor the bid construction company tagged to real to the sector/client-specific issues; estate or construction? How do you • Provide an overview of the • Developing new products and handle consortia bids that can involve firm’s business in the sector, approaches is also easier when several different players that might sit in confirming priority clients and a sector approach is adopted, as different sectors? That is not to mention targets, client teams and the the sector team lives and breathes the issue of the involvement of banks. firm’s current market position; the issues and has the in-depth When a bank refers a schools project to • Assess how key sector trends experience to resolve them. the firm should it be tagged to education are impacting on clients and or banking? And how do you classify the way the firm manages and The key downsides might include the conglomerates involved in businesses develops client relationships; difficulties in measuring performance across many different business areas? • Review progress in relation to and the resistance of existing practice There are many similar examples, but a each priority client and target management to change. logical protocol can overcome most of and general sector objectives; In the end the key question is not these issues. A decision tree showing • Agree objectives and action so much whether a sectoral approach where and how to classify clients is a plans relating to the sector; is beneficial but which sectors to adopt useful aide memoire in these instances. • Agree how to deal with and how many the firm can really Whatever happens, however, don’t significant barriers to progress. handle proactively. confuse work type with the sector the – 52 managing partner, may 2010