A successful strategy needs to be based on extensive analysis of the firm´s market, it encompasses client segmentation, brand and competitive strategies, and capabilities.
The leadership of every firm must develop a strategy rooted in the realities of the market and communicate it throughout the firm.
The value of strategy.
Good strategy is a framework of ideas, developed by the leadership, which sets the course the leadership wants for the firm by creating a common purpose. It involves making decisions about direction, communicating those decisions, and allocating the resources to go in that direction. All strategic devices and tools, such as mission statements and visions are aimed to become a touchstone for all decisions throughout the organization. All firms, even when no strategy is explicitly developed or communicated, must take a direction.
Professional services firm leaders need to take time to think of the future health of their businesses and how they approach the market. They need to focus on the strategic imperatives relevant at anytime and allocate resources appropriately to chart the next steps of the firm. This should be done in a style and manner geared to the culture of the firm and the judgment of the leadership. It can be elaborate, documented, or intuitive, but it should be done.
Approaches to determine the strategy.
There are three approaches to strategy seen in the professional services industry.
- The procedural approach follows a logical process to determine strategy. Its strategic framework will distinguish between corporate planning, strategic planning, and business unit planning.
- The functional approach is responsible for the creation and management of strategy. This role will often include research, competitive intelligence, internal reporting, and market analysis.
- Extant strategy is the direction deduced from the decision-making of, normally, one dominant business leader. Staff in such firms might feel that there is no strategy, as it isn´t well-crafted or not clearly planned, nevertheless, firms following this strategy may be dramatically successful, achieving their strategic intent.
Marketing strategies for the professional services firm.
1. For the single practitioner:
- Market penetration strategy: a fast, volume penetration might include a memorable start to achieve impact and limited price penetration such as a discount or free trial at the beginning.
- Distribution strategy: when single practitioners decide to associate with a network of other independent practitioners to feed each other work.
- The “guru” strategy prioritizes margin over volume, aiming to establish a personal reputation that drives demand for expertise. This pricing strategy requires generating strong demand for high-value work. Successful implementation is based on extensive technical knowledge, effective communication, and exceptional consultancy skills, coupled with a marketing approach centred on reputation enhancement.
- Exit strategies: apart from closing a business, one of the exit strategies is to recruit a successor. If the founder intends to sell a business should consider that at the very start of the business. The practitioners should consider brand, reputation, intellectual capital, staff or unique client relationships, as well as minor issues such as the name of the brand (if called with the owner´s name the company is too associated with the founder, and it would be hard to build it into an independent business). At least two years before the target sale time, the company should invest in a PR specialist to build publicity for the firm.
2. Marketing strategies for the retail professional service:
Before a business launch, key considerations include evaluating an existing business’s viability, financial health, and growth potential, or assessing location, competition, and client attraction methods for new ventures.
Once established, employ the “guru” strategy to attract high-profile clients, maintaining premium pricing and quality. Expand offerings with branded products and establish a training program for young professionals to grow the franchise.
Another effective strategy is building a retail network. By establishing a chain or network, efficiencies can be achieved, benefiting both buyers and profits. These efficiencies can transform the value proposition of the service.
3. Marketing strategies for the specialist boutique:
A boutique is a niche player on the market. Its biggest advantage is being different than competitors so that clients have a clear choice. The marketing strategy must preserve at all costs their point of differentiation. They must understand the client’s values and perceptions as well as invest in internal communication and training around differentiation.
4. International marketing strategies for the professional service firm:
Every company should be aware that without an international dimension, there is no growth in the business. Such marketing strategies involve resourcing and penetration strategies into other parts of the world and then setting up international brand strategies.
5. Marketing strategies for the large firm:
Large corporate entities generally have a functional approach to business. These firms are likely to create a marketing strategy or strategic framework as part of their generic strategy process.