Management consultancy firms are facing a worrying gap between client sentiment and activity, according to a new report, which is posing a threat to firms’ abilities to adapt for the future and evolve in-line with clients’ needs. Melissa Hernandez, Senior Digital Marketing Executive at Propero Partners and one of the authors of the study, reflects on the report’s main findings.
In the ‘State of Digital Marketing in Professional Services 2018’ report, the team at Propero Partners surveyed senior decision makers across professional services firms, including management consultancy firms. The respondents came from firms of varying size, with differing years of operation.
Traditionally, management consulting firms relied on referrals and word of mouth to grow, but in today’s digital age, with its abundance of choice – and the technological freedom to search through and access these options – reliance on this type of strategy is simply no longer enough. The old networks are disappearing, mostly due to generation change in the workplace, and in part down to the move towards using advanced technology and a digital marketplace.
Growth now depends on placing a consultancy firmly in front of its target audience, using the correct types of marketing, having the urgency to make the firm attractive to the client, and of course, the knowledge and skills needed to convert these leads. And even though 75% of the management consultant respondents realise the need to go digital in relation to their marketing, this realisation hasn’t yet become a reality. In other professional services firms, such as those in the legal or financial industries, the use of digital marketing and strategy is becoming commonplace, despite a slow process to get going.
The study found that a large proportion of management consultancy decision makers consider marketing superfluous or not worth investing in, even though it has been proven in other industries to garner great results. For example, of the management consultancy firm respondents, only 13% invested more than £20,000 per annum in marketing. But the most disconcerting results stem from the discovery that a staggering 53% (down only 6% from last year) don’t invest any budget, and 15% are not using any digital marketing, at all.
This is particularly surprising considering that many of the consultancy respondents work with and alongside these other professional services. They offer services centred around innovation, effective change and progression, with the onus being on adaptability and agility. But how can they provide these services if they aren’t keeping up to date as much as the industries they work with? It is a brave game that many consulting firms are playing.
By lagging behind in the adoption of digital marketing, consultancies could be sabotaging their client development, because who would work with a consultancy that doesn’t practice what it preaches? However, there are some early adopters. Within the management consultancy industry, there is an alarming gap emerging between firms who invest in marketing and those who do not. Those firms that invest in marketing get many more client enquiries per month, and those who don’t, get much fewer than their peers. This difference, when taken to its logical conclusion, means the firms that don’t invest will fall further and further behind and, eventually, will be unable to bridge the gap.
Another major problem for consultants is that they appear to be utilising the wrong channels. Despite a shift towards acceptance of digital marketing methods in consultancy firms, it’s clear from the lack of return they see, that they don’t know which channels are best for them and are still in ‘trial and error’ phases. This so-called ‘hope’ marketing rarely works, and can cut a big chunk out of a budget.
Generally speaking, however, consultancy firms are getting new leads. For instance, the average management consultancy firm will receive between one and five each month. It becomes interesting when looking at how they convert: referrals win out, with 27% of firms converting 45%+ of the referrals they get. Yet only 17% of firms convert 45%+ new enquiries they get from their marketing. This could mean that consultancy firms are still placing more emphasis on winning referrals, rather than treating them both equally, and this is a problem.
In the coming years the need for consultancy firms to differentiate themselves from the rest is only going to become increasingly important, and to do this firms must embrace digital marketing and budget accordingly. Investment is no longer a choice but a necessity: without proper time and resources, consultancy firms will fall by the wayside, and in a marketplace with an overabundance of choice, this can quickly become untenable.
If firms are disillusioned with marketing – spending too much time trying to decipher what works and what doesn’t – there’s no better option than to seek the support of an experienced supplier. Specialist expertise in areas such as content strategy, online advertising and/or brand awareness will cut down the costly trial and error periods. This in turn will boost knowledge and create a shortcut to success.
High growth consulting firms are specialised and invest in marketing.