I know this is a rather odd question, but how you think about the answer has real implications on how you build your marketing and business development model. So, what do I mean by this? Well, what’s the most meaningful difference between a house and a car? Aside from serving entirely different purposes (unless of course you live in an RV), the defining difference between the two is the nature of the assets themselves:
- Your house is an appreciating asset. While it costs you to maintain it, generally you can recoup that investment, and even make a modest profit, at some point in the future when you choose to sell it.
- Your car, on the other hand, is a depreciating asset. It loses its value the moment you buy it. You pay to maintain it, you pay to use it, and once it’s all used up you practically throw it away for 10 cents on the dollar.
So, let me ask the question in a different way – are you operating your firm like it’s a house or operating it like it’s a car?
Consider an Example
The other night I was thinking back to a conversation I had with an engineering firm client a few months ago about content marketing. This particular client is one that has not yet embraced a content-driven approach to marketing. While they believe in the theory behind it, they’ve not yet commited themselves to take the first step with us to implement the systems and content needed to begin the transition.
The firm has 6-7 business development people and 2-3 marketing staff and relies primarily on networking by the firm’s executive leadership, attendance at tradeshows, and a dedicated “push” from its business development personnel to build its bookings. A few months ago, I had an audience with the entire marketing and business development team so I used the opportunity to reengage them on the topic. I heard some rather interesting responses:
- Most of the business development folks were skeptical of the idea that a prospective client might seek out the firm based solely on its expertise in such a way that they could operate from a place of authority.
- The firm was so busy with its current workload they had little capacity available for new initiatives. Why build content when we can’t keep up with the work we have?
- The firm’s majority owner was bringing in so much business that its pipeline was extremely healthy and there was more opportunity than available capacity.
Right now, I believe this firm is being run like a car and here’s why:
- If the majority principal walks away the firm will suffer a significant loss to its pipeline and its bookings.
- The firm, by its own admission, is investing just enough in marketing and business development to fill its capacity today.
- While the firm has meaningful experience in a select set of markets there’s no reason to believe that it has systemically built organizational expertise to serve those markets – it has no content to prove this to be so.
- To an outside buyer, there’s no reason to believe that the firm is capable of producing more value to its ownership 2-3 years from now than it can today. Success is more the outcome of good people than it is of good systems and processes.
Hence, it’s a depreciating asset. It’s a car. It’s producing tangible value for its owners right now, and it may continue to do so in the near future. But, that value is slowly eroding and once it’s all used up, it’s essentially junked or sold at a significant discount.
Operate Your Firm Like It’s a House
If you think of your firm as a house, a content-driven approach to marketing just makes logical sense:
- A steady flow of useful, educational content memorializes the expertise of your firm and demonstrates that a model exists to transfer that knowledge throughout the organization.
- A systematic approach to content development and distribution that’s used to attract potential clients is just that — a system. While talented people are needed to operate it, it’s quite possible to change people within the system and it still works quite well.
- Even if your content model pales in its performance relative to a “rain making” owner. Even if it delivers no more than 5-10% of your firm’s total revenue in a year. It’s still a system that has accretive value and momentum that can be sold, bought and transferred.
Hence, the experience-focused, sales-driven firm is basically a car. By contrast, the expertise-oriented, content-driven firm is more like a house. So, what’s your firm? A house or a car?