I've recently finished reading Olivier Blanchard's book 'Social Media ROI: Managing and Measuring Social Media Efforts in your Organization', which I can honestly say is one of the best books I've read about social media. However, some of what Olivier says applies to much more than simply social media.
In it, Olivier talks about the concept of F.R.Y. (frequency, reach and yield), which he was introduced to by Microsoft but whose origins are unclear.
"For years, I searched in vain for a way to add a little more sophistication to the 'Do this, and you'll sell more stuff' conversation. I already knew, both instinctively and from experience, that good products combined with good marketing and customer-focused business practices drove business forward. I just hadn't found a formula to help frame the mechanism by which this worked."
Reading about F.R.Y. was a lightbulb moment for me. It's something that can easily be applied to professional services firms in order to enable us to better measure the impact of our marketing efforts.
F stands for frequency – i.e. getting existing clients to buy from you more often
R stands for reach – i.e. acquiring new clients
Y stands for yield – i.e. getting existing clients to spend more with you every time they buy from you.
The vast majority of marketing and business development initiatives within professional services firms can be categorised into one of these areas:
- News alerts about new legislation/issues (with the aim of engaging us to help with any resulting work)
- Seminars (for existing clients)
- Key client programmes (designed to grow your share of wallet)
- Practice group development and industry sector focus (as far as these relate to existing clients)
- Value adds such as clinics or strategy sessions with the clients
- RFP responses for existing clients
- Cross-selling initiatives
- PR (to reinforce purchase decision)
- Pricing strategies (e.g. volume discounts, retainers, fixed fees)
- Social media activities (as related to existing clients)
- Referrer strategies
- Seminars (for prospects)
- News alerts/news letters and any other content (blogs, videos, audio, speaking at conferences etc) aimed at prospective clients
- Practice group and industry sector focus (relating to new business)
- New business meetings
- RFP responses, beauty parades, and credential statements for prospective clients
- Social media activities
- Upselling (e.g. client comes in for a will and you find out they also need a family trust)
- Alternative pricing structures (not always, but often when you wish to be rewarded for the value you deliver)
I think sometimes we measure the wrong things. It's easy to say we've done a great job on a seminar if we get 200 attendees, and that's true if the reason for holding the seminar is about brand awareness but if it's about reach (converting prospects into clients) or frequency then it's the wrong measure. We need to know how many of those attendees subsequently engaged us.
By understanding how our marketing and BD initiatives fit into each of these three areas, we can evaluate their success against our overall revenue objectives in each area of F.R.Y. (and work out where to focus in the future by seeing if different market segments react to, and engage with, different types of initiatives).
Doing so would make it far easier for us, as professional services marketers, to communicate the value of everything we do, to others in our firms. Partners already see the value of BD in areas like pitching. It's easy to demonstrate how the win rate has gone up and the ROI on a particular pitch, because you know the cost of putting it together, you know whether you've won or lost it and, if you've won it, you know (or will at some stage know) the value of the resulting work.
It's harder to measure the impact of other, 'softer' initiatives. Often, it's several of these (rather than one thing in isolation) that lead to more work, but we can begin to think about this.
It's all too easy to track the opening rate of news alerts but then never to revisit down the track comparing a list of which clients have given you work in that area with those who opened the news alert. Sure, that probably won't have been the only initiative you've run – you may have run a seminar and some of your professionals may have met with the client/prospective client for coffee, but by tracking these things, we can begin to assess the likely impact of each one.
The only way to reliably know why you are given a particular piece of work is to ask the client what factors led them to appoint you (and to possibly prompt them about some of the initiatives you've run in that area). Maybe that's something we need to get better at doing.
What's your view?
Do we measure our initiatives in the right way? Do we need to? Do we have time to?
Inputs, outputs or outcomes – which do YOU measure? The Masala Principle Blog by Tim Haveron-Jones