Finally, some good news! After a several years of depressing economic news and continued forecasts of a slow gradual recovery, there’s finally a report of a comeback – at least for the professional services sector. A couple weeks ago, Service Performance Insight (SPI) published its 2012 version of their Professional Services Maturity Benchmark. The survey participants included 216 firms in the research, IT consulting and management, architecture, accounting and advertising segments. The Benchmark includes volumes of important and interesting data at a hefty $999 price tag. However, it delivers some very useful insights. Mlicki participated in the survey so we are fortunate enough to have access to the results. I can’t share too much of their findings but I thought there were some intriguing and exciting topline numbers that directly impact professional services marketing.
After an unprecedented professional services environment that included not only an unusual lack of growth but also unheard of measures like lay-offs and freezes on headcount and salaries, the sector has returned to significant revenue growth (+15%) and, to a lesser extent, even headcount expansion (+11%). Short-term leading indicators like size of deal pipeline (now up to twice the size of quarterly billings) and percentage of revenue in quarterly backlog (up 3 points to 45%) are also showing positive momentum. Bill rates and productivity have made some very strong gains and correspondingly, and by necessity, so has the percentage of billable staff (now at 73%, up 6 points since 2007). However such improvements in efficiency can fuel growth for only so long. Continued growth will eventually require more aggressive headcount growth or service delivery will eventually be impacted.
The survey delves into how the more successful firms perform in comparison to their counterparts along key “service pillars”. It measures performance across five such pillars – leadership, client relationships, human capital alignment, service execution and finance and operations. One of the most interesting findings is that success for professional services firms is less correlated with longevity and is more so tied to leadership focus, organizational alignment, and operationalized processes and execution.
Leadership focus and organizational alignment are both closely related to a key component of marketing strategy – a clear and focused positioning with which the organization is aligned and supports. On a related note, the report also prominently brings to light that the “Best-of-the-Best” professional services firms has a significant marketing function that develops their firm’s brand and leverages thought leadership, references and leads.
Now is the time for professional services firms to get serious about marketing – to take a hard look at the core competencies that best fuel their growth in order take full advantage of the resurgence of the professional services sector. In my next blog post, I will further address this issue and how professional services are poised to fully embrace the next level of marketing.