MARKETING STRATEGIES APPLIED TO THE CONSULTING BUSINESS

 

                                               Nikolai Tsonev



University of National and World Economy
Sofia, Bulgaria



Keywords: marketing of services, management consulting, marketing strategy, marketing process, marketing management


The rapid development of the market relations in recent years affected the awareness of the importance of marketing for businesses. Increased competition in glutted markets and economic conditions complicate the decision making process and increase the activities of risk management. Only those companies that manage to identify precisely the needs of the market and the factors influencing consumer behavior that directly contribute to the development of adequate and relevant marketing strategies are successful.

Marketing is everything that the organization undertakes as regards the external environment regarding the satisfaction of the other party - the customer, producing valuable goods to realize the organization's goals, including the benefits for society. Obviously the marketing process is not spontaneous for the sellers and the buyers. It is in many ways a manageable and focused. The practice of marketing has evolved to such an extent that today one can talk about principles of marketing management, which must be distinguished from marketing management.

The marketing management of the organization is the process of analyzing, planning, realization and control of the implementation of programs, aimed to create, maintain and expand mutually beneficial relationships with target markets for the realization of the goals of the organization.

Marketing management has its own logic, which is developed in several stages.

The first step is to analyze the marketing environment and recruitment marketing information about it. The organization must evaluate the marketing environment – the market of intermediate purchasers (other organizations) and the customers` market (individuals, families, households) to assess similarities and differences in customers` behavior, to determine key competitors and their behavior, to create a system for permanent marketing information.

The second step is to create a marketing program for action. This stage is the most creative. It is the heart of management. The organization must segment the market and select the target segments, to ascertain the positioning of its products, to create competitive advantages and to develop a rival strategy, to develop and coordinate the elements of the marketing policy (Tsonev, 2013).

In this regard, important is the application of so-called marketing audit. It can be seen as a first step of studying the overall strategy and implementation of strategic management succession. If a consulting company wants to improve its marketing is necessary, first of all, it should start reviewing and evaluating their current marketing practices. The marketing audit is a useful diagnostic approach for this purpose. It can be entirely self-diagnostic if the company feels able to explore different aspects of their own marketing, including public relations and the effects of advertising. If not, the process can include specialists in offering professional marketing services and public relations. For example, they can be useful in interviewing clients and gathering information from other external sources to provide unprejudiced information for comparison and benchmarking. In general, the audit could:

  • examine current and past practices of marketing and promoting the business (organization, information base, strategy, techniques, activities, budgets and costs) and assess their contribution to the development of the company.

  • establish how marketing is understood by the company itself and how it is practiced by different departments and business consulting groups, and what is their motivation to pay attention to marketing.

  • compare the results with the marketing approach of direct competitors and other consultants.

  • determine what changes in marketing would be desirable to meet the new requirements and to exploit new market opportunities.

  • give suggestions about the effectiveness of implementation so far marketing strategy.

The benefits of the marketing audit extend beyond marketing. A marketing audit can identify potential new areas of business, offer new types of customer services, identify gaps in the technical competence of the company and train staff and make many practical suggestions.

The organization of the marketing process is also interesting. Virtually every member of the consulting team has a role in the marketing of the company and would be useful for positioning the company, if he monitors, and thinks about, the future projects of the company. It turns out that there are still some formal organizational arrangements necessary for the marketing function.

Whatever the size and complexity of the consulting company, however, the management team should be paying considerable attention to marketing management. Marketing strategy is usually discussed and decided by the top management. If possible, one member of the senior management team should be appointed marketing director. This may be a function of full or part-time. The marketing manager is busy with the marketing function in its entirety and also is responsible for the preparation and submission of relevant market analysis, strategies, programs and budgets. Certain marketing activities will be his direct responsibility as policy training in marketing, public relations, advertising, mailing lists and editing and dissemination of public information. He may have a small technical and administrative staff for these functions. Although other marketing functions and activities are not covered by the direct responsibility of the marketing manager, he has to follow them, monitor, evaluate and encourage in cooperation with other managers.

The roles in indirect marketing (designed to build the professional image of the company and opportunities for new clients) are also part of the marketing strategy of a consulting company. Usually in the consulting company they are given to certain departments or employees who can use their skills to achieve the best effects and results. The aim is to optimize the use of individual abilities: not everyone is able to write an article or a book that would help the company. The roles should be clearly defined, for instance, it should be determined who will be active in management or who will be delegated rights to participate in the management.
According to Zipursky`s (2012) survey conducted on marketing for consultants, consultants tend to favor working on generating referrals (19%) and developing their network (22%). These two marketing methods are known to be effective for any service professional so this does not come as a surprise.

It is interesting to note that few consultants spend time on advertising (6%) their consulting business. Advertising in a very targeted fashion can generate  strong growth. An opportunity exists here. Social media and educational marketing through writing and reports also came in at 10% and 9% respectively. About 10% of consultants spend time on presentations and seminars. Direct mail, cold calling and blogging, joint ventures took between 5-6% of their time while the rest of the methods, such as print advertising and publicity work account for only 1-2%.

Direct marketing of specific projects, on the other hand, is a common feature of partners and managers, who would spend from 30% to 100% of their time communicating with individual clients, build new relationships, trying to sell project, arranging pre- diagnostic study or simply finalizing additional project. In some consulting companies, such senior professionals are marketing specialists working full time. They may not be the best employees of the company, but their social, diagnostic and sales skills make them an invaluable asset. They are called overlords of the company. However, many consultants prefer to change roles, for example, to make ​​successful marketing specialists also responsible for managing and monitoring the performance of specific tasks or projects.

Direct marketing requires excellent coordination and follow-up by senior managers and/or managers by sectors and geographical areas within the company. Uncoordinated communication with the same client by different departments of a consulting company could damage the company's image. Conversely, there are many opportunities to achieve synergies in the company by actively sharing information about potential customers and projects, taking into account the interests and capabilities of the entire company.

An important part of the consulting company’s marketing strategy is marketing program or marketing plan which determine both the marketing objectives of the consultants and the measures to be taken for achieving the result of the strategy. A written marketing program clarifies what needs to be done in a given period, what resources are required, and what contributes to the overall marketing efforts that are expected from individual employees or departments within the company. Marketing purposes must clearly express what needs to be achieved through marketing efforts over a period from a quantitative and qualitative point of view:

  • quantitative targets may indicate the market share that must be achieved and the volume of new business to be generated based on existing and new customers.

  • quality objectives concern desired positioning of the company in the minds of customers or the need to develop more challenging projects.

The objective has to be achieved in the future – for example, after one, three, or five years. This highlights the need to consider all analytical and strategic considerations in terms of time. For example, most of the indirect marketing techniques are used to build a professional image and should be treated as an investment in the future of the business.

To obtain a marketing strategy executable is necessary to use some applicable techniques of the marketing mix. They must be consistent with the capabilities of the company.

The optimal marketing mix is influenced by a number of split apart in consulting practice factors, characterized by the following:

  • It is generally preferable to combine several direct and indirect marketing techniques.

  • Techniques that consultancy is not comfortable with or there are not enough resources for them would not be helpful.

  • Although it is regarded as less effective, indirect contact (via email or phone) is used by many consulting companies (often small and new businesses, rather than large and well-established ones).

  • "Newcomers" in the consulting business cannot afford to wait until the market comes to them and should use techniques that put them in connection with potential customers.

It is important to pay attention to the amount of marketing efforts, although there is almost no reliable data on the amount of money, spent on marketing by various consulting companies. Marketing is a relatively new area of professional services, and marketing practices are changing rapidly. Moreover, much of indirect marketing can simultaneously generate both revenue and activity (for example management seminars and information services).

The type of marketing that consultants make the most money of are referrals – 38%, followed by networking – 30%, presentations and seminars – 9%, cold calling – 8%, direct mail – 3%,  online advertising – 3%, social media – 2%, joint ventures – 2%, blogging – 2% and finally print advertising – 1% (Zupurky, 2012).

 

The survey is also a very compelling argument for the power of networking and referrals. Many people still view marketing as an expense when they need to consider it an investment. As the survey was not limited in terms of geography, consultants from around the world took part in it and the results show the global opportunities for making money. It confirms that face-to-face meetings and personal contact is the most effective way to get new business. Once people talk with consultants and trust that they can truly bring value to their business, they will hire them.

To try to get a look at how effective the amount of time spent on these marketing efforts is, I crunched the numbers of Zipursky’s survey results to produce one more indicator. This barometer is obtained by simply dividing the percent of money made by the percent of time spent to generate those income amounts resulting in a quotient in which the higher the value the more productive that activity was in generating a monetary payoff.

In a business with as many variables as consulting it is hard to take any of these factors by themselves as income is almost always the result of multiple factors. However if consultants are spending a high percentage of their time on some of the lower performing endeavors, they may wish to reprioritize these marketing strategies. Although publicity work and writing articles and reports were no-shows on the money producing list they probably were a contributing factor combined with others.

Constant monitoring of the workload in the future helps to balance the marketing efforts of the company to avoid overloading or vice versa. It is important to conduct initial meetings with potential clients, tracing the visits to explore the old customers, management, and preparation of proposals for clients and others. If these marketing events do not generate a number of new projects, it may be necessary to spend more time training employees in the marketing department or to explore the effectiveness of marketing approach that was used (Kubr, 2005).

The marketing process in consulting services is associated with some general stages:

  • The profiling of services and presumable clients

  • Plan to establish on the market

  • Research of presumable clients

  • Selling consulting services

 

The services that a consultancy company can offer depend on the qualifications and experience of the consultant. For the consultants it is important to characterize the content of services and be able to explain their nature to potential customers. Many consulting firms often issue special brochures on the services offered, which is not always the best form of their presentation.

After determining the profile of the offered services it is necessary the consultants to exclude some organizations from the number of potential customers. It is necessary to determine the profile of the prospective customers. In the process of implementation of the plan to establish the company on the market, it must inform potential clients about the services we can provide them. In addition to the brochures, consulting companies use seminars, conferences, articles in periodicals that promote their services.

In the consulting business the marketing activities ends with the start of the sales organization, namely, where a particular prospective client is determinate (Yaneva, 2010).

In developing a marketing strategy in services managers need to make decisions about on the product mix, positioning and development of services. These solutions can be achieved by analysis of the services provided by the company. This can be done in two directions - complexity and variability. Complexity is characterized by the number of steps necessary for the service, and the variability is determined by the number of necessary decisions to those who deliver the service. Firms operating in the services sector are distinguished from one another by the degree of contact with the customer during the service and level of adjustment of the services to the customer requirements. It was found that the services are advertised difficult and psychological role of price is more important since it is the only indicator of quality.

For each company in the service sector, however, it is clear that a single purchase is not a success. The bulk of the profit in services is achieved not by attracting new customers but the retention of customers through the aftermarket services. For services, this is part of the added value of the product.

Marketing consulting services is characterized by a number of features that distinguish it from the marketing of services as a whole. These features greatly influence the development of marketing strategy. The consultancy sector also faces the trends and forces whose origin can be traced with the help of research, entrepreneurship and strategic opportunities of consulting or IT companies. There are a number of issues on which more and more companies in the services sector, governments, as well as social organizations and non-profit organizations will need the advice and assistance of independent professionals. The tendency to treat knowledge and perceived as a commodity and object of the business is quite clear (Guilmore, 2003).

Conclusion

It would probably not be an exaggeration to say that the increasing competitive environment effective marketing is one of the main factors for success for professional firms. Therefore, it would not be sufficient to mention only a few principles of marketing with the hope that all employees will apply them in the process. The marketing process should be managed by the senior management of the company not as a separate entity, but as a process and approach that is fully integrated with all the processes that take place within the organization. On the other hand, consulting intervention beyond internal management has also proved to be a useful and modern tool to harmonize the business process with the new trends in the external environment. Marketing strategy is an essential element in the company's corporate culture, competitiveness, and development.

 

References:
1. Tsonev, N. (2013). Marketing tourism, Publishing complex UNWE, p.26-27.
2. Yaneva, M. (2010). Fundamentals of consulting in tourism, p.119-121,
Avangard Prima 
3. Gilmore, A. (2003). Services marketing and management. Sage.
4. Kubr, M. (2005), Management consulting. A guide to the profession.  
5. Zipursky, M. (2012) Marketing for Consultants: Strategies, Budget, ROI and More: Survey Results.
6. http://bgconv.com/docs/index-129403.html.