PwC have recently launched their new branding which involves a new logo among many other things (I assume – see related article). The essence of the piece is encapsulated from the article below:
The centerpiece of the new branding initiative, which launched September 20, is a simplified logo consisting of the initials "pwc" in lowercase type.
"The world has changed significantly over the last two years and will continue to evolve as new and emerging markets develop. Our brand refresh signifies that we understand how the world is changing and are prepared to help companies respond with the diversity and skills a global network of 160,000 people can offer," Tom Craren, leader of U.S. brand and thought leadership for PwC, told AccountingWEB.
"The changes to our logo, colors and look symbolize the broader changes we are making in the U.S. firm and global network to help create value for our clients and our people in a very dynamic and challenging global economy," he continued. "We believe our brand refresh provides a way of distinguishing PwC from other professional service firms."
I am not privy to the inside scoop on the branding process for 'pwc' but I do know that branding in law, accountancy, and other professional service firms is one of the most poorly understood and applied concepts when it comes to the strategic management of the firm. Far more than a logo or claim to a new position, a re-branding should be a great opportunity to engage employees and enhance client value.
Here is an article I had published in the Singapore Law Gazette recently which addresses branding of a professional service firm, lets hope PwC got it right?
Branding the Professional Service Firm
Branding is one of the most poorly understood and misapplied processes in the context of professional service firms (PSF). Too many PSF embark on building a brand using the basis of a consumer goods branding campaign as their benchmark for what branding is all about. This entails significant time and resources spent on designs, new logos and nice glossy brochures. These same firms are then surprised when the 'branding' process achieves negligible results in terms of business for the firm or an enhanced reputation in the market place. Even the largest PSF in the world have engaged branding consultancies and spent millions of dollars on new tag lines and flashy advertising yet neglected the people in the firm, who are the ones who live, breathe, and deliver the brand every single day in their interaction with clients.
Branding in PSF is not about logos, advertising, or new stationary, it is about the skills, knowledge, and interactions that the human assets of the firm have in the market place. Branding in PSF is different because:
- Professional services are essentially intangible and hence differentiating the PSF is both different and difficult
- The professionals in the firm hold all the capital, if they don't 'buy into' the brand, there is no purpose in branding at all
- Clients will not choose a PSF provider due to a new promotional campaign based on a new logo or image
- Clients choose the individual as much as the firm, hence there should be a balance between firm brand and individual brand
- Consumers in Asia are much more critical of professionals advertising than those in the west, hence advertising is less effective
This list makes clear the challenges in professional services branding. Branding is not only an important topic because PSF branding is so different to that of traditional organizational branding but because many firms are now embarking on such processes with less than stellar results.
The Value of a Professional Services Brand
There has been much discussion in the legal and accountancy media recently regarding the concept of publicly held professional firms. The topics of branding and PSF ownership are interrelated because of the financial and management impact of outside ownership. If you look at brand giants such as Nike and BMW, much of their book value resides in the name of the brand, often referred to as 'goodwill' on a balance sheet. Stripped of all their assets, the shell of the firm would still be worth a considerable amount due to the brand equity perceived by consumers. Can the same be said of a law or accountancy firm? If, as has happened in some cases, a substantial portion of a law firm's top people leave, does the 'brand' still have the same value? As Bente Lowendahl in his book (Strategic Management of Professional Service Firms) points out, it is more than likely that such a firm will become an empty shell, devoid of value as all the assets of the firm reside in the human capital, its people. Professional firms such as McKinsey have managed to institutionalize a brand to the point whereby mass departures have not affected their perception of value to clients but they are one of the very few that have managed to do so. That is why PSF branding has as much to do with the professionals themselves as the firm.
A brand signifies something to a customer about a firm that gives it some kind of advantage over competitors in terms of preference and trust. However, all the recognition and awareness in the world driven by advertising and other forms of promotion will not overcome negative experiences that a client has with the provider. The individual professionals within the firm are the heart of a firm and hence the brand, everyone inside the firm must live and breathe the values of the firm and this must come through in the firms dealing with clients. It is the values of the firm that form the core of a brand and this is reflected to the outside world in the things the firm does. This suggests that branding starts inside the firm and hence any law firm should focus on nurturing and developing their people to provide the best experience they can to clients in order to create a strong brand image.
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recent research study from RainToday.com and the Wellesley Hills Group titled Fees and Pricing Benchmark Report: Consulting Industry 2008, finds that while brand leaders (27% of responding consulting firms) and "not very well-known" firms (73% of responding consulting firms) have similar standard / book rates, the hourly rates brand leaders actually get were always higher than their counterparts. The increase by level of professional is as follows:
• Highest-level professionals (CEO, Principal): 20% higher
• Upper-level professionals (VP, New Partner): 11% higher
• Advanced-level professionals (Directors): 29% higher
• Mid-level professionals (Managers, Post-MBA): 20% higher
• Entry-level professionals (Associates): 35% higher
This research should not surprise professionals who work for larger firms as they are keenly aware of the ability to charge higher fees based on their standing with clients and industries served. Having said that, branding is as applicable to small firms as it is to larger ones with the key difference being the limited resources of smaller firms and their limited geographic and practice scope which suggests they should focus their branding efforts on key market segments and practice areas.
The Branding Process for PSFs
The previous discussion has hinted at the idea that branding, and branding a PSF in particular, is a comprehensive effort that entails many aspects of the firms marketing and business strategy. Additionally, branding does not rely on advertising and the ability to invest millions of dollars in large scale promotional campaigns. This is particularly true in Asia whereby the limitations of advertising and consumer responses to it have been mentioned. Branding in knowledge based industries is as much internal as it is external. Building a brand requires a business audit in terms of:
- Vision, mission, and business strategy
- Marketing strategy
- Firm culture and values
- Firm history and background
- Staff perceptions and needs
- Clients and industries served
- Client perceptions of firm
- Services offered
- Competitive environment
A PSF must have a solid understanding of what the firm stands for and how they would like to be perceived now and in the future. By looking at this list it should be clear that a brand cannot be represented (except superficially) by a logo or slogan and that deciding on a brand strategy is a time consuming process, and albeit rewarding, that takes substantial effort and commitment among many areas of the firm. It then becomes obvious that changing a brand and the perceptions of a firm again cannot be represented by changes in firm colours or stationary and hence any firm embarking on a branding process should take it very seriously or not bother at all.
Additionally, given the nature of PSF who rely on the human and social capital embedded in many practice areas of the firm, there is a strong case that branding should occur at the individual, practice, and firm level, although there should be a unifying set of values and beliefs that bind the firm together. For PSF with offices in multiple geographic locations, this will be crucial to create what David Maister calls, the 'one firm' firm.
The figure demonstrates a number of important issues when it comes to branding law and other professional service firms. The most important being the involvement of the people within the firm and ensuring the brand identity is accepted and embraced on a firm wide basis. The brand identity is much wider than the image or position. Too many firms attempt to create a new brand by creating a new image, something that David Aaker (Professor Emeritus at UC Berkeley and renowned expert on branding) refers to as the brand position trap. One can see that a significant amount of the branding process is about the internal culture and workings of the firm and it is those desired attributes that create the basis of the overall brand identity. The brand identity is an all encompassing idea of the firm brand and a position, or image, is only a subset of that identity.
In the first stage, a firm should take an in depth look itself and the market through a strategic brand analysis. Internal examinations should be concerned with leveraging the strengths of the firm and building on those few key cultural variables that have real potential to create an advantage for the firm in terms of differentiating itself and being embraced by the people within the firm. This process is also a great way to involve and seek input from most everyone in the firm as without it, one cannot expect buy in and commitment. Such buy in is crucial to the success of any branding process for PSF as it is the interaction between client and provider that, when push comes to shove, determines the brand experience. This can be achieved through workshops and training to inform and seek collaboration from internal stakeholders. The external analysis is done in conjunction with the internal analysis as it is important to ensure what you desire to be fits the realities of the market place. For example, it would be impossible to take the brand mantle of Skadden for M&A deals, although you might be able to credibly produce superiority in some related aspect of M&A work. What you are doing through these analyses is developing the core of the brand, its DNA, making it part of the very fabric of the firm so that your people deliver on that brand promise in their dealing with all stakeholders. Once you have combined your analysis through the gaps and opportunities process, this should lead onto the realization of some concrete identity elements for the firm, practice groups, people, and services. These different elements should be consistent and mutually supportive. For example:
Brand as individual professional – trusted advisor, thought leadership
Brand as practice groups – cross disciplinary, flexible and knowledge sharing
Brand as service – ground breaking, innovative services. Value based pricing
Brand as firm – innovative, client centred, international exposure, cutting edge
This would fit a firm that wishes to be recognized as a leader in its field, one that works on the most demanding projects and consistently enhances the firms learning to add value to future client engagements. These are not just words, these are values to be adopted and lived by every day by all those in the firm. Once these values become rhetoric, the brand will lose all credibility in the market place and once that happens, it can be very difficult to re-invigorate the brand in both the clients mind as well as your peoples. This points to the crucial role of leadership in brand building, too many firm leaders do not lead by example and instead of inspiring and motivating their people, they inhibit them by instigating unnecessary procedures or making unrealistic demands (2000 hours a year in billable time springs to mind). Research shows clearly that firm leaders should facilitate and encourage their people, not command and control. Remember, professionals are highly achievement oriented themselves and do not take well to micro management. In his book Practice What You Preach, David Maister showed unequivocally that those firms that lived by their values achieved better financial performance than their peers. Branding is not just about getting new clients, it is about retaining and attracting the best talent.
Once you have developed your brand identity, you will need to consider the different segments the firm targets and develop a value proposition suitable to those client markets. You may need to make adjustments in the brand image (by focusing on different elements of the brand identity) and communicate those relevant to your target audience. Public relations based promotion will be critical here in terms of writing and thought leadership, seminars, firm publications and resources, speeches and key note presentations. It is also important to target brand communications at internal stakeholders such as new hires in order to ensure they understand the brand process and have the skills to deliver on it.
A Final Word
Working on prominent deals and those that challenge and motivate your people is an important part of the branding process for PSF. One cannot expect to land such deals if you are not an attractive employer for new hires (access to the best talent), hence internal and external branding work hand in hand. Additionally, building upon early successes means that firms must be willing to commit a portion of time (normally billable time) to investments in capability building in terms of service ability and firm reputation. If you live and die by the billable hour, you are never going to give branding the opportunity to work for your firm, and it does work!
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