Current Trends in Professional Services Marketing 

Background
Between 1996 and 2004, Professional Services Marketing, Inc. conducted three separate research initiatives to explore and track marketing trends among professional services firms in the state of Minnesota. The survey, first fielded in 1996, has been repeated two times to allow for benchmark and trend analysis. One of the main objectives of the research was to discover whether professional services firms were outsourcing more of their internal marketing function to third-party marketing consultants, and if so, what criteria decision-makers were using in the selection of outsourced marketing firms.

The author's hypothesis was that if proven cost effective, there is a trend among professional services firms to outsource all or part of the marketing function. The survey results validated this hypothesis.

Methodology
In 1996, 2001 and 2004, a survey was distributed – by mail (1996 and 2004) and by email utilizing a web-based survey tool (2001) – to a cross-section of decision makers in Twin Cities professional services firms (managing partner, administrator, partner). Respondents represented top services firms in legal, accounting, advertising, information technology, consulting, engineering, and other related industries.

Key Findings:

• Willingness to Outsource – In 2004, 65% of those surveyed expressed willingness to outsource some or all of their marketing function, if proven cost effective. This figure was up nine percentage points from the 1996 response of 56%.
• Criteria for Selecting Outside Marketing Resources – When asked to evaluate the criteria used to select an outside marketing resource, respondents consistently ranked “demonstrated expertise in professional services marketing” and “specific industry knowledge” as being more important than factors like “cost” and “physical location.” These findings supported the author’s hypothesis: If proven cost effective, professional services firms would outsource most or all of their marketing function. “Creativity,” however, was the most highly ranked criteria when the survey was recently repeated in 2004.
• Internal Staffing versus the Use of Consultants – Services firms’ reliance on outsourced expertise is on the rise. When asked if the firm staffs an internal marketing department, those answering affirmatively decreased from 62% (1996) to 51% (2004). Firms with one to four internal marketing staff have decreased from 77% (1996) to 36% (2004).
• Satisfaction with Outsourced Marketing Resources – In 2001, 22% of respondents were not satisfied working with consultants, whereas in 2004, only 6% of respondents were not totally satisfied.
• Being Strategic Before Being Tactical – An overwhelming majority of 2004 respondents (82%) expressed agreement that being strategic before being tactical is important when marketing professional services.
• Services Most Likely to be Outsourced – Services most likely to be outsourced include advertising, public relations, marketing training, brochure creation, client satisfaction surveys, individual marketing coaching, and website development.
• Marketing Budget Allocations – 67% of all participating professional services firms in 2004 reported investing 0-2% of gross revenue in marketing-related activities. The majority (73%) also said their firms were spending more in 2004 than they did the previous year on marketing.
• Measuring the Return on Investment of Marketing – Based on the 2004 survey, respondents measure marketing ROI in the following ways (rank ordered based on those who agree or strongly agree):


• Brand Recognition in the Marketplace - 75%
• Client Satisfaction - 73%
• Increased Revenue for the Firm - 68%
• Profitability by Practice Area - 65%
• Profitability by Individual Professional - 39%
• Seminar Attendance - 31%
• Articles Published - 30%

For additional data and information on the PSM survey initiatives, please visit our PSM Research Resource.