This article by Peter Kane first appeared in Professional Marketing Magazine – Summer 2010.
February 2008 and the media is chattering about the probability of recession and years of turbulence. I decided to ignore the sage advice and abandon the comfort and security of employment – only to find that reports of the economy’s death were far from exaggerated!
But – at the first gathering of another group of wise heads, the Director Insight Panel – to share their experiences directing marketing and business development across professional firms, one of the central themes to emerge was that this period of economic stagnation has heralded a new found acknowledgement of the need for high quality, targeted and focused BD activity within the firms.
Not just that, it has brought an objectivity, professionalism and desire for transparency that in many firms was previously hidden by Partners happy to operate on personal whim and indulge hobbies and pet projects. The paltry results were hidden by a surging economy and a wilful disregard for returns. This has, it seems, changed.
The upsides of the downturn
Opinion was divided among the group about the stage and rate of recovery. Nigel Pyke being very optimistic and seeing “significant improvement on where the market was a year ago”, Nick Richards more measured, believing that while we will hopefully avoid a double-dip recession, we are likely to experience a more bath-shaped curve and that we are currently bumping along the bottom of that bath. This all sounds a bit painful – and it may well be for the companies just clinging to liquidity and for nervous equity partners – but it is good news for some.
What united the group was the belief that the recession has sharpened the focus on business development within firms. Partners who previously had little or no appetite for new business activity are now queuing up to request time and advice from the relationship teams. Also evident is a shift from pure “marketing communications” to “business development” and – you may want to sit down for this – some firms are even openly using the word sales!
The budget is budging
There was some talk of tighter budgets and the way money is carved up is also changing. Nick Richard’s focus of two-thirds of budget on business development and CRM with the remainder supporting a good media and communications programme seemed about right to the others. As Lee Grunnell from Beachcroft notes, activity must be absolutely focused on “winning work” – and needs to directly support client, sector and Practice Group business plans. The need to demonstrate better return on investment has helped this push for better alignment.
Exceptions where there is more of a brand focus were cited for one firm that had recently engaged in a merger and another which was seeking to bring its European clout closer to the brand primacy the firm enjoyed in the US. However, even allowing for these discrete objectives, there seemed an undeniable swing towards investment in relationships, thought leadership and key accounts and away from brochures and canapés.
Nigel Pyke spoke of an initiative to pull budget from various separate service lines to focus in a central pot, but Amy Kingdon – while seeing the merit in this – has found that devolving some budgetary control has actually encouraged a clearer sense of ownership and more grown-up thinking about marketing spend. Instead of people simply pushing for more, more, more they are now being selective about how their cash is being spent.
Death to the hobbyists
Unfocused hospitality and sponsorship seem to be the real victims of this budget re-alignment – and while Partners’ Pet Pony Clubs may be crying into their raffle boxes this year, I doubt many in the professional marketing community will shed a tear. As David Rough noted however, it takes strong leadership to get rid of the hobbyist projects and it is not a battle that all firms have the stomach for.
Accountability and transparency seem to be the order of the day and that bodes well for anyone wanting to gain firm commitment to strengthen Key Account Plans, invest in service reviews or strengthen their bid process.
There is however a fear as the economy improves. Are professional firms like a frightened plane passenger who finds faith in the grip of turbulence only to drop it once the plane lands? Will the new habits be forgotten as utilisation rates rise? The group agree that while this is a real threat, odds are against it and now that firms have been forced to evolve, the bad old days of complacency, whimsical plans and lax spending will not return.
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