Innovation Starts Within: Are New Services and Products Waiting for You to Find Them?
Think fast: How old is Facebook? Twitter? The iPhone? When did you first hear the phrase, "cloud computing"?
A decade ago, none of the above existed: Facebook launched in 2004; Twitter in 2006; Apple unveiled the iPhone in 2007; cloud computing, a concept that dates to the 1960s, became a consumer reality sometime after 2008.
The point: Communication media and technology — the tools by which modern business and society function — are changing almost as rapidly as clouds cross the sky.
For some, the role of marketing director is evolving as marketers become innovative players in the development and implementation of new products and services.
Bringing innovation to marketing, via a new product or service or enhancement of an existing one, "is more than product marketing. It's about understanding the components of product management and development," explains consultant Gale Crosley, president of Crosley+Company.
One approach is to find existing services within the firm that can be "designed, defined, developed and replicated," Crosley says. Often, that service is just "lying under a rock" at the firm, waiting for someone to find it.
In each of the following examples, marketers actively participate in developing existing firm resources into a distinctive product or service that fulfills a market need and generates revenue.
Internal Tool Becomes Revenue Source At Wolf & Company/Boston (3 offices, 17 partners, 175 total staff), what started as an internal risk management audit process evolved into an automated internal tool and then into a marketable product, branded as WolfPAC.
WolfPAC is an online risk assessment suite. It generates revenue through (1) one-time implementation and annual licensing fees from its clientele, primarily in financial services, (2) related client service engagements, and (3) licensing though accounting firm "channel partners" for sale to partner firms' respective clients.
"WolfPAC generates revenue from service engagements that is three to four times the revenue generated from the product alone," says Jerry Gagne, member, who leads W&Co.'s Risk Management Services practice and is director of IT Assurance Services.
In developing WolfPAC (www.wolfpacsolutions.com), the firm initially offered the product for free to firm-friendly "early adopter" clients. It modified the product based on client feedback — for example, by significantly increasing its reporting capabilities — before developing a pricing model.
Later, a formal launch showcased WolfPAC at banking association trade shows. "We had a promotional campaign to registered attendees to sign up for their demonstration appointment," explains Business Development Supervisor Arianna Noonan. "We set up our exhibition space as a ‘viewing room' with theater-style chairs and tented walls to give the appearance of a special event." The firm's risk management group followed up with participants, she adds.
The firm's initial marketing focus was to educate potential clients on risk management issues. Today, the focus is to differentiate W&Co. from other risk management providers and reach customers in other industries and regions.
"W&Co. has added national and regional sales managers," Gagne says, "and is targeting distribution partners in other heavily regulated industries, such as healthcare and insurance." The firm intends to use industry associations as one means of reaching these prospects.
"Knowledge-based marketing content supports this effort," Noonan explains. Emails, webinars and quarterly print newsletters educate clients and prospects on compliance news, internal audit topics and internal fraud controls.
Rea Launches LeanCPA Rea & Associates/New Philadelphia, Ohio (11 offices, 40 partners, 205 total staff) turned an internal resource into a service for which accounting firms are the target market.
The genesis of LeanCPA LLC (www.leancpa.net) occurred when the firm sent a consultant to a Lean Six Sigma Black Belt class to learn to better serve manufacturing clients. The consultant had to complete a project in order to be certified, so he focused on business tax processes in one of R&Assoc.'s offices.
That project led to others at the office and department level, which led to a firm-wide project. "The results were so solid that we decided to test it on other firms," says Marketing Director Katie Tolin.
The firm found three early adopters, who received significant discounts on the service.
"We used their feedback to develop the process," Tolin says. The feedback occurred in face-to-face interviews, with Tolin playing a key role creating the questions and coaching consultants in how to conduct the interviews. The firm used the feedback to help define its target clients, which Tolin describes as firms with revenue of $10 million or more, and firms going through a merger process, particularly if multiple locations are involved. Competitors are typically not target clients.
The feedback also helped Tolin identify client needs and craft collateral materials accordingly.
The firm created awareness for its service at conferences and trade shows, by launching an e-newsletter, and getting an article published in the January 2010 issue of Journal of Accountancy.
Now, more than four years since its launch, LeanCPA has completed approximately 50 client engagements, including multiple projects for one client. The experience has taught Tolin to "have no preconceptions" when approaching a new service offering. Instead of trying to dictate what the service will be, she says, "Go where the market tells you to go. In the beginning, we changed paths a lot."
Building a One-Stop Shop Three years ago, right in the middle of an economic downturn, Anders Minkler & Diehl/St. Louis (one office, 12 partners, 100 total staff) launched a project most CPAs wouldn't attempt even in a booming economy. Inflexion LLC (www.inflexionllc.com) is an AMD affiliate that combines information technology solutions, strategic services, capital advisory and M&A transaction services, all under one umbrella.
Marketing Director Donna Erbs describes it as "a wish-list type of company" that clients turn to for consulting advice from trusted advisers in many different disciplines. Drawing on the talents of systems engineers, MBAs, and CPAs, Inflexion helps clients succeed by initiating and managing change.
For example, Inflexion's IT offerings include virtualization, SharePoint design and implementation, and cloud solutions; strategic services include cash flow forecasting and budgeting; capital advisory services include corporate finance, capital formation and mergers and acquisitions; and transaction services include due diligence and financial modeling.
Erbs and Scott Soucy, managing director of Inflexion, felt that the affiliate needed a name that would invoke a scientific air and capture the notion of change. Their choice is based on "inflection point" — in math, the point at which a line changes direction. This choice resonates with clients, because Inflexion's combination of technology and finance expertise helps to drive change within their companies.
The entire launch took only three months, Erbs says, which was both good and bad. More time would have allowed her to tweak outgoing messages, but the pace allowed "no time for second-guessing yourself. A lot of accountants get ready, get set, but it's hard to make them go. Because we wanted to launch when we did, there was none of that."
What's in a Name? Plenty! Branding is a key element of the success of the dental practice at the Hunt Valley, Md. firm Naden/Lean (one office, 7 partners, 44 total staff). Four years ago, Director of Marketing and Business Development Andrew Rose recognized that the firm's local dental practice had reached a plateau. He saw two areas of opportunity, however: (1) "no top end" to potential profitability, and (2) leadership that was open to new ideas.
Rose renamed the practice Dental CPAs, a division of — though not a separate legal entity from — the firm. "The main thing was the URL," Rose says. The www.dentalcpas.com address identified the practice in a clear-cut manner that quickly raised the site's search engine optimization.
Rose followed with blogs, newsletters and a presence on Facebook and Twitter. Google ads and banner ads on specific dental educational sites are key ingredients in the promotional mix.
"The division now generates about 25 percent of the firm's revenue, with a national clientele," Rose says.
Rose expects even more growth on the heels of such marketing strategies as the rollout of the Institute of Dental CPAs, an association of North American CPA firms formed and funded by N/L.
He also hopes to apply the dental division model to the firm's equestrian and bookkeeping practices.
Rose says that the success he's had with the N/L dental division couldn't have happened without support from a key partner who allowed him to guide the division and who supported him before the other partners. "I had a flak barrier," he says. "It's all about finding a champion."
Support Your Practice Leader At Barnes Dennig/Cincinnati (one office, 16 partners, 95 total staff), opportunity knocked in early 2010 with the arrival of a former national-firm tax director with expertise in the renewable/alternative energy industry.
"The tax director was the champion, saw the potential, and led the charge," says Chris Perrino, principal, business development.
The marketing emphasis for the practice was to promote the director's expertise and experience. The first step: Learn the fundamentals of the alternative energy sector from him. This enabled the marketing team to understand the target audience — school districts, manufacturing and electrical and construction contractors — in order to generate white papers, newsletters and other collateral materials. The team pushed these out through blogs, email and print. "The emailed articles were particularly effective in leading to personal meetings with clients, prospects and referral sources," Perrino says.
In many firms, the marketing director's challenge is not in branding a product, or in creating a separate business entity, but simply in finding someone to take owner-ship of a new niche opportunity, as the director did at BD. This dedication is critical to the success of a practice, Perrino explains. "If partners, managers and the executive teams are not committed and accountable to the service areas, to help them off the ground and become true thought leaders, there is only so much a marketer or business development director can do."
Embrace an Emerging Market In a post-Enron down-turned market, one in which 65,000 start-ups launched in one year alone, PKF Texas/Houston (one office, 12 partners, 149 total staff) retooled and re-branded services to embrace entrepreneurs. The firm renamed its Small Business Solutions Group as The Entrepreneurial Advisory Solutions (EAS) Group and shifted the group's emphasis from compliance to advisory services. It also created the Healthy Start Package, offering clients a bundle of compliance, tax and consulting services for a fixed monthly fee, explains Raissa Evans, executive manager of Practice Growth.
PKF Texas began to integrate itself with the entrepreneurial community — a relationship that has deepened over time — through involvement with the Houston Technology Center, BioHouston, the Rice Alliance for Technology, and other strategic partners. For example, the firm is a sponsor of the annual BioHouston Chili Cook-off event, for which Evans was this year's committee chair.
The firm also produces a 75-second weekly radio piece, The Entrepreneur's Playbook®, featuring tips from Director of Consulting Solutions Gregory Price. It airs weekly on a local AM station. The playbook's content also appears on Price's blog (www.FromGregsHead.com).
As the Healthy Start Package has matured, it has become more integrated within the EAS Group, Evans says. The branding has proliferated — the firm's international niche became International Healthy Start last year, and there's an IT Healthy Start engagement underway.
The Healthy Start Package has been a long-term differentiator for PKF, Evans says. "Even when Healthy Start is not the right service for a prospect, it gets conversation started on a track where it's clear we're the type of firm that … seeks solutions to our clients' issues, instead of creating a list of commoditized services."
Provide Leadership and Support The marketing and business development leaders who drove the innovations described in this article fulfilled several key requirements for success. First, they earned a "seat at the table" by demonstrating confidence and leadership ability as marketers and business developers. Second, they defined the needs of their clients and marketplace, and crafted their offerings accordingly. Third, they teamed with leaders who shared their commitment to the success of the project, since they recognized that chances of success are slim without a genuine commitment from the partner or practice leader involved in the launch.
One final key to success: They treated partners as clients and acted as their consultants. "A lot of marketing people just jump in, rip through tactics, and don't spend the time to establish the credibility that they need," says Consultant Gale Crosley. "Your job is to educate, and to provide leadership and support."
