It is a risky business making predictions. That’s especially true when those predictions are recorded irrevocably in print for anybody to cross-check one year later. Writing about what lies ahead for marketers in pm at the beginning of 2013, I concluded that firms would have to deploy their marketing and business development resources more efficiently if they wanted to deepen relationships with clients. It certainly was a volatile past 12 months, which witnessed many firms address marketing fundamentals, with a particular focus on engaging with clients in new ways.
This time around innovation will be as equally important as efficiency. Marketers will have an even greater impact on the success (or failure) of their respective firms over the coming year. The core challenge identified last year – namely, clients demanding greater consistency of service, more added-value offerings, and better commercial insight from their advisory firms, but wanting to pay less – has not gone away. If anything, it will continue to intensify over the next 12 months. The result is that marketers will need to work harder to really differentiate why their firm should be first choice for both existing clients and new prospects. This will entail a greater focus on innovating the way marketers do their job.
As their firms seek to reap the benefit of the upturn in economic activity, marketers should expect to play a greater role in capturing a share of this growth. This more optimistic attitude is reflected in a large increase in the number of marketers who say they are responsible for leading the development of new products and services for their firm: 60% now say they are highly involved in this activity, up from 45% last year.
To launch new products and services effectively, marketers will need to keep their finger on the pulse of changing market dynamics and client demands. It is no coincidence, therefore, that the numbers of marketing professionals involved in researching client needs has increased from 47% last year to 62% this year. This represents a positive shift. However, genuine innovations will only come when this insight is successfully synthesised, communicated and acted upon across the firm. Professional firms are sitting on a wealth of data: a key priority for marketers in 2014 should be how to translate this data into fundamental changes that improve the client experience.
Research, however, is no substitute for client conversations. Worryingly, only half (51%) of marketers surveyed say they are regularly involved in attending events with clients present, down from 63% last year. This suggests marketers have switched their priorities from being out speaking with client to sitting behind their desk focusing on internal management. It is important to keep an ear to the ground in 2014; regularly engaging with clients – at seminars, through client feedback and at informal networking events – is the best way to get under the skin of client needs.
A piece of good news: marketing leaders expect to see an increase in marketing budgets and headcount over the coming year. Average marketing spend is expected to be 2.3% of total revenue, up from 2.1% a year ago. This suggests that many marketers are succeeding in convincing their colleagues of the importance of investing in business development activity for the firm to drive sustainable growth.
This means that overall marketing budgets are on the up. On average, firms anticipate a 3.1% rise in overall marketing budgets over the next 12 months. This is a welcome improvement on the 0.7% increase expected when we asked the same question last year. One in five (21%) anticipate their marketing budget will increase by 6% or more. Only one of the 38 firms we interviewed expects an overall decrease.
The knock-on impact of this rise will be a modest increase in headcount, which is predicted to rise, on average, by 2.2%, up from 0.2% last year. Marketers anticipate this increase in headcount will be accounted for by a similar 2.4% increase in average expenditure on marketing salaries.
So how will a potentially inflation-beating rise in overall marketing budgets be best put to use? It is clear that marketers view strategy as an increasingly important part of their role. More than half (58%) list ‘strategist’ among the top three attributes necessary to successfully execute their role. The strategic marketer in 2014 looks set to spend more time at the top table, helping the firm to deliver corporate objectives.
This view is reflected in marketers’ selfassessment of their performance. When asked about their contribution to the client experience, marketers rate themselves most highly for strategic initiatives aimed at projecting a positive impression of the firm to the market. Activities such as defining the firm’s brand or delivering the impression of being well-managed are rated highly.
However, contribution to tactical or operationally-focused activities is identified as a weakness by marketers. Activities such as organising account planning, measuring client satisfaction and linking reward to individual contribution are rated less positively. These areas represent significant opportunities to innovate: technology is facilitating innovations in capturing and analysing client feedback, and many firms are exploring new ways of capturing prequalified leads online to squeeze more value from their online footprint.
Perhaps unsurprisingly, when asked what prevents them making the changes they want to see in 2014, marketers cite common bugbears such as lack of resources, low fee-earner engagement or inadequate systems and processes. Lack of leadership is another key barrier cited by many. But leadership by whom? Surely 2014 is as good a time as any for senior marketers to seize the initiative and demonstrate leadership: proactively becoming the voice of the client will help drive greater client-focused initiatives and behaviours across the firm.
Barriers such as lack of time and resource are not insurmountable. The most astute marketers will spend 2014 focusing on the areas that will have the greatest impact: thinking about breakthrough rather than incremental change; considering the impact of greater innovation on client relationships; and persuading the partnership to embrace new ways or working. Easier said than done, but the marketers up for the challenge are likely to make the most headway.
In an increasingly competitive environment, marketers will need to stand up to be counted over the year ahead to truly demonstrate their capacity to implement innovative ideas to help their firm grow. Many of the building blocks are already in place to make this happen. I end with three predictions about what the key priorities on your agenda for 2014 should be:
The findings from this year’s MPF/PM Forum and Meridian West benchmark are based on responses from Heads of Marketing at 38 professional firms.
Alastair Beddow is a senior consultant at Meridian West. He works with professional services and financial services firms to develop and implement client-centric strategies and world-leading thought leadership campaigns. Contact email@example.com.