Promise more and deliver better
Business consulting firms need to shift their understanding of brands.
Promise more and deliver better: Business consulting firms need to shift their understanding of brands Interbrand | Pg. 2 Promise more and deliver better: Business consulting firms need to shift their understanding of brands by Josh Feldmeth As economic conditions shift, so do buyers’ perceptions of value in the business consulting sector. Clients that have put projects on hold are tentatively reaching out to services firms to re-start initiatives. Many of these clients are keenly aware of professional service firms’ desires to reinvigorate their pipelines and clients frequently find themselves in a position of great power over the services they choose and their ability to demand more for less. At the same time, clients also feel a fresh openness to weighing new options against their triedand-true provider. When it comes to weighing options, clients see a sector in flux. On the one hand, consolidation among large players has clients considering whether their business would be better handled by the biggest and best: global organizations that keep expanding to offer everything they could possibly outsource. On the other hand, clients see the emergence of boutique players who are walking away from large players, taking years of experience with them, and offering it up faster and cheaper. In business consulting, brand is still poorly leveraged and understood With business consulting firms competing more than ever for client attention and loyalty, one might assume that professional service leaders would be hard at work positioning their corporate brands to ensure differentiation, relevance and credibility. Remarkably, this is not the case. In business consulting, the importance of brand often goes unrecognized. When it is acknowledged as a component of the organization’s presence in the market, it tends to be considered a marketing expense, rather than a driver of value for the company. As a consequence, a brand’s ability to provide a competitive advantage is minimal to non-existent. What’s so tragic about this lack of understanding among services firms is that brand has become a more powerful factor than ever in the sector. The perception that other drivers of choice (price, services, experience and quality) are separate and untouched by brand, is based on old mental models and the desire to keep on conducting business as usual. The truth is that brand drives value in business consulting. Interbrand recently helped a global services client quantify the impact of the brand on customer choice. The results indicate that in some categories of their business, brand was driving 30-40 percent of client choice behavior. Unfortunately, few service players know how much influence their brand has on their clients’ buying behavior. Build powerful business consulting brands through people For brand to be a driver of choice, two things need to change. First, business consulting firms must rethink their prejudices about brand. In a world where not-for-profits, arts organizations and other business-to-business firms are reaping the benefit of innovative brand programs, the time has come for business consulting firms to re-examine their outdated belief systems. Second, business consulting firms must take advantage of the high-touch, human centered nature of their sector. When services firms do prioritize their brand, they often rely heavily on the application of mass market branding techniques without Promise more and deliver better: Business consulting firms need to shift their understanding of brands sufficient thought to their relevance to business consulting. To break through via human relationships, internal brand engagement will be an essential driver of success and a key component of the firm’s brand model. Why is branding so poorly understood in business consulting? At first glance, some business consulting leaders may disagree with the assertion that brand is not understood in their organization. Some leaders would assert that they have consistent visual and verbal expressions and proudly boast high-quality advertising campaigns. And yet, that’s precisely the problem – their efforts to make an impression through a mass-media promise are only one component of a strong brand and may not always make an impact on decision making. Decision making is instead influenced by whether or not the brand can deliver on that promise and drive business success. In a recent study conducted by Interbrand, more than 40 leading global engineering firms were audited to assess their brandbuilding efforts. An analysis of their external communication and brand experience revealed shockingly homogenized propositions: visually undifferentiated, described with dense industry-specific terminology and technical jargon, and positioned with service offerings so similar that the descriptions of one firm could have been interchanged for those of the next. In a sector so concerned about competitive pressures and commoditization of services, these engineering firms almost universally use the brand in a way that is opposite of its intent. Brand has become a tool to suggest similarities rather than point out unique qualities and differences. This isn’t isolated to engineering firms. Similar reviews have been conducted in accounting, law and HR consulting, and in every case, our insights yield similar recommendations: differentiate, or accept the inevitable erosion of value and relationships are critical, and rely on existing models. Interbrand | Pg. 3 drop in price that your brand is able to command, along with the inevitable impact on your business. To build understanding, shift mental models Business consulting firms must shift their thinking. Easier said than done – changing mental models is nothing short of challenging. It’s human nature to avoid change and rely on existing models. When it comes to understanding brands, there are three mental models that prevail, all of which serve as an impediment to understanding and leveraging brands: From current mental models ...to a shift in thinking 1: Reputation is everything. In the traditional model, the firm rejects the notion of a brand; it is an “un-word,” removed from the lexicon of the business. As a proxy, the firm refers to its reputation, which the leadership and/or partners of the firm passionately guard and honor. While reputation is both a corporate and individual responsibility, it is disconnected from the brand program, since individuals tend to believe that their approach to relationships is sacrosanct. Reputation and brand are similar, but not the same. Reputation is only one part of the brand experience: Relationships contribute to reputation, and brand can help isolate which behaviors make relationships more valuable to the highest priority customers. Here, business leaders create a consistent brand experience by insisting on set of behaviors from everyone in the firm. These behaviors – both client relevant and competitively distinctive – will not only preserve reputation, but will drive client loyalty and price premium. Accenture. One of the few services companies that actively build a comprehensive brand rather than passively preserving a reputation: a consistent and winning culture, thoughtleadership IP and power communications all aligned around a clear promise of “high performance.” And now the strength of the Accenture brand will be put to test. Will the experience of their brand insulate the firm from the reputational damage of Tiger’s monster duck hook? 2. Brand is an expense. A second mental model is one in which brands are viewed much like insurance it’s something the firm must spend money on, and they grudgingly provide some investment. Spend on brand is chalked up to the necessary costs of doing business, and is rarely linked to business performance or individual behaviors and their ability to produce business results. Brand is a strategic business asset: Business consulting firms have always struggled to harness their intellectual capital and have invested billions into internal knowledge management systems to leverage this asset. Leaders in the future will treat brand in the same way. They will build a compelling brand proposition around the strategic growth agenda and put metrics in place to manage success and return. Randstad, the world’s number two staffing and talent services company, uses a value-based system to manage the brand’s contribution to corporate strategy initiatives. Market by market brand performance data is mapping marketing spend data across their communications mix, resulting in a clear picture of ROI and the insight required to ensure share responses 3. Brand is a special project. The third way of thinking about brand sets it out as an exciting project. Many an enthusiastic CMO has put together a company-wide brand team, hoping to drive a long-term shift in thinking. But after convincing the firm’s leadership to allocate a substantial short-term investment to the brand, even compelling research findings and a case for urgent change can’t prod the services firm to fund the brand effort further, since short-term results aren’t immediately produced. Brand as a way of working. Leadership must commit to building its brand over the long-term – make it clear that brand is never going away. While a journey with no destination is hard to justify, a brand program should require at least several years’ commitment, with milestones of success and specific outcomes in mind. Brand teams that launch a new idea and visual system with a splashy event suffer when these point-in-time activities lead to brand as a superficial project with a beginning and end. Hays, another leading talent services provider, has a long-term plan. After defining how their brand will create value, they are embedding it into their go-tomarket strategy and culture, which is reinforced through communications and branded experiences. Brand teams that launch a new idea and visual system with a splashy event suffer when these point-in-time activities lead to brand as a superficial project with a beginning and end. Inspired participants become cynics, feeling as though their contributions will go nowhere. The accountants and architects go back to managing their relationships to save the firm’s reputation, or to seeing brand as an expense rather than a driver of value. Example Promise more and deliver better: Business consulting firms need to shift their understanding of brands Interbrand | Pg. 4 Any efforts to build a strong business consulting firm begin with understanding. From understanding to engagement Any efforts to build a strong business consulting firm begin with understanding: What brands and branding means, what opportunities a strong brand presents and why it is relevant to everyone at an individual level. By changing perceptions and shifting mental models, a firm can begin to move from “thinking” to “doing.” That’s where internal brand engagement comes in. As mental models shift, employees will be open to seeing their notions of branding shift. For business consulting, brand has often been limited to the promise: acquiring customers through communications and marketing campaigns. Of course, this narrow application fails to leverage the very best of the firm – its people – as well as its ability to prove the brand’s power to deliver on its promises. To build brand value, have the courage to both promise and deliver Engagement means involving employees in delivering a specific, desired customer experience, over and over again, via the touchpoints that matter most. Using internal brand engagement to improve the value of the brand is a natural fit for business consulting, where high-touch relationships are critical, and the transition from thinking about reputation to thinking about the larger brand experience can be smooth when done strategically and comprehensively: • A strategic internal brand engagement program utilizes brand as a strategic tool to achieve specific, long-term goals (that is, there is no off-the-shelf solution). It requires involvement from leadership to the most junior positions, and includes learning experiences with specific objectives and outcomes. • A comprehensive internal brand engagement program means that every function in the services firm must play a role in delivering on what the brand promises. This takes brand out of the sales and acquisition role (closely tied to marketing) and puts it in everyone’s Competitive pressures Acquiring, building and retaining top talent is an ongoing challenge. In business consulting, not only are brilliant minds critical to success, but these industry leaders often have the ability to take clients with them upon departure. Attracting the right new talent is also critical as workforce demographics continue to shift. Industry consolidation threatens firms of all sizes. Big firms are getting bigger – and may appear unwieldy to clients. Their increasing aggressiveness puts others on the defensive. Small players who are unable to offer full service capabilities won’t compete with the biggest, but have to focus their offering and challenge others on price and agility. Mid-size firms fear they will be lost in the category. hands, including human resources, who have a uniquely critical role in attracting the talent necessary to make the brand experience second to none. When brands drive decisions and behaviors, returns are inevitable There are substantial benefits to using internal brand engagement as an approach to building a stronger business consulting brand. Whereas traditional branding tools may help firms set out new promises to the market in a shiny new campaign, an internal brand engagement program can help produce real results. ■ Benefits of business consulting brand engagement programs Strengthen the employer brand. Employees benefit professionally from an internal brand engagement program via development opportunities, successful client relationships, and more efficient, consistent approaches to business challenges. Strong employer brands are of the products of cohesive, brand-centric cultures. Employees who are selected based on behavioral alignment with the brand are more likely to stay. Clarify points of differentiation and improve service delivery efficiency. When a firm undertake a brand engagement program, its employees recognize precisely why their brand different and what role they play in emphasizing that every day through the touchpoints that matter. Whatever the size of the firm, employees will be empowered to act in a way that supports a focused and differentiated brand promise. Internal engagement also drives efficiency – where consistency can be improved, time and money are saved and both the firm and the client stand to benefit. Commoditization of services puts pressure on every kind of firm. As the industry consolidates, firms expand their service offerings, attempting to prove that they can do anything and everything. When service offering changes are perceived as reactive measures or don’t fit the brand, it only serves to clutter the marketplace and erode the value of the services for everyone. This can also lead to downward pressure on pricing. Ensure clear differentiation and command a premium. Knowing precisely what matters to your highest value clients will enable leaders to make smarter decisions about service offerings, and ensure that what they do offer is seen as worthy of a premium. Moreover, employees will be able to focus on what matters most as well – both in terms of the service offering itself and the way in which it is delivered. Rapid replication of IP and innovation can be hard to capture and leverage. Through social media, it is easier than ever for leaders to advance thinking in their areas of expertise. With ease comes speed of replication and distribution. However, speed may reduce the likelihood that firms can leverage thinking to drive innovation and use it broadly across the firm. Great opportunities can be missed. Increase collaboration and evolve services Engagement programs prioritize idea generation throughout the organization as well as IP development. This helps employees recognize the way in which collaboration adds value to the broader external experience (as well as the value of collaboration to internal efficiency). When a services firm uses brand as a filter for product and service innovation, great ideas are developed to fulfil targeted needs and applications. ! Josh Feldmeth Josh Feldmeth is Chief Executive Officer of Interbrandâ€™s New York office. Since joining Interbrand in 2002, Josh has led project teams working with some of North American and Europeâ€™s best brands. Josh ensure that everything we do for clients, from strategy through creative creates business value. He helps colleagues and clients understand the mechanics of how brands create value and where capital should be deployed to maximize that value. interbrand.com Creating and managing brand value TM