How Consulting Firms are Making Their Marketing More Sociable: A 2012 Research Report
By Robert Buday (President, Bloom Group), John Furth (CEO, the Association of Management Consulting Firms) and ResearchNow
Social media – the LinkedIn discussion thread, the Facebook fan page, the Twitter tweet and other online ways of interacting with the world – has transformed how individuals connect with one another, how organizations and celebrities build their brands, and how societal movements gain momentum. Many businesses, from supermarket chains to Hollywood studios, are using social media to connect with customers.
For the third year in a row, our organizations – Bloom Group LLC, the Association of Management Consulting Firms (AMCF) and ResearchNow -- have studied how potential clients use social media to find consulting services and how consulting companies use social media to market themselves. Here are links to our 2010 report, “Thought Leadership Rewired,” and our 2011 report, “Marketing Consulting Through Social Media.”
Our latest study shows that the consulting world has now embraced social media as a way to market its expertise, build rapport with existing clients and draw new ones into the fold. But many of social media’s most potent tools remain untouched.
The key findings:
1. Social media is not the preferred method of looking for a consultant. When searching for consulting services, buyers and users of consulting services continue to value colleagues’ recommendations, presentations, and other traditional marketing more than social media.
2. Consulting companies therefore don’t consider social media in their top tier of effective marketing techniques. Firm-hosted seminars, conference presentations, books and more traditional online marketing such as articles published on the firm’s website are considered more effective. Less than half surveyed run gated online communities, engage in online discussion threads or post content on presentation sites such as SlideShare. Social media is frequently relegated to the consultant’s marketing or public relations team. For the most part they are content to count the number of views, comments and “shares,” but far less likely to analyze the comments and respond to them.
3. That said, social media is consuming an increasing portion of the consulting marketing budget. Consulting company respondents said they are devoting a bigger chunk of their thought leadership marketing dollars to social media, and expect to devote nearly a third of that budget to social media by 2014.
4. Even if consulting companies are not proactively doing much in the social media space, they should watch out for negative comments in social media which can do serious damage to a firm's chances to win contracts. Many buyers of consulting services (33% of the respondents to our survey) would eliminate a consulting firm disparaged on social media in the earliest phase of their search, before they send out a request for proposal. However, most say they can change their mind if a trusted colleague reassures them about the consulting firm. Consulting companies need to monitor what's being said about them online and on a variety of social media platforms and take considered action when a disgruntled emplyee or client says something for public consumption.
The roots of this study go back to the spring of 2010, when Bloom Group, Bliss PR and AMCF began tracking and analyzing how social media figured in the marketing mix for consulting companies and potential clients. In 2010 we found that many consulting firms were just discovering public social networks such as LinkedIn and Facebook, blogs and microblogging services such as Twitter, and video and presentation sharing sites such as YouTube and SlideShare. However, the traditional marketing tools such as seminars, print publications, books and company web sites dominated.
In 2011, after our 2010 report had drawn more than 12,000 views over 12 months, we wanted to know whether social media had continued to increase its share of the marketing toolbox at consulting companies. But we also wanted to hear from “the voice of the customer” – the senior executives and their staff members involved in finding and hiring consultants. That’s when we brought ResearchNow, a firm that runs research panel-based surveys, into the fold.
ResearchNow surveyed 200 buyers and influencers of the consulting purchase decision last year. It found that clients still placed more weight on traditional marketing tools when choosing a consultant. However, criticism about a consulting firm on a social media site nonetheless could “poison the well.” In our survey of consulting companies, they told us they still relied heavily on traditional techniques to develop their content and took a dim view of social media’s usefulness in this area. Still, consultants said they expected to increase the percentage of their marketing dollars spent on social media.
For our 2012 study, we wanted to gain some additional perspectives in these areas:
- Are potential clients relying any more heavily on social media to screen out consulting companies? How early in the process do they eliminate a firm that has received negative comments on a social media site such as LinkedIn? What types of comments are the biggest turnoffs?
- What will help reassure a potential client once a consulting firm has been criticized online?
- How potent has social media become in the marketing mix for consulting companies, and how big an investment will they make in this area in the future?
- How proficient are consultants in using social media to market themselves? Who in a consulting firm gets to post to a social media site, and how cumbersome is the process of getting something online?
- How much are consultants’ online publications encouraging interaction and discussions with viewers, a hallmark of social media sites? That is, how “social” are consulting firms’ online thought leadership?
- Which kinds of social media practices are driving interest and leads for consulting companies?
We begin our 2012 report with our “voice of the customer” findings. They give consulting firms an outside-in view of how potential clients use social media to screen out prospects for consulting projects. Then we present our findings from our survey of consultants themselves – how they view social media, their sense of the role it will play in the future, their willingness to embrace it as a marketing tool and how it has influenced their traditional websites.
The View From the Client
To gauge how companies use social media to evaluate consulting companies, ResearchNow surveyed nearly 200 companies in April 2012. Respondents included a mix of large, mid-sized and small companies, ranging in size from $50 million to more than $10 billion in annual revenue. They represented many kinds of industries, with heaviest concentrations in financial services, healthcare and retail. All were large enough to invest significantly in consulting services, and every respondent had some role in purchasing consulting services. While some were the sole decision-makers, 30% did the initial screenings for others who made the decisions.
Here is what they told us:
Social media is still not as important when searching for consulting firms as other methods they use.
Respondents were given 13 different avenues for seeking out consulting services and asked to rate each method on a scale of 1 to 10, with 1 being “not at all important,” and 10 being “extremely important.” (See Exhibit 1.) The highest rankings were given to “contacting colleagues in my firm” (6.89) and “contacting others outside my firm” (6.60.) Next in the level of importance were “viewing consulting firm presentations in public conferences” and “reading consulting firms’ online publications.” Ranked least important were “posting questions in public social networking sites like LinkedIn or Facebook” (3.48) and “posting questions in micro-blogging sites such as Twitter” (3.18). Consultants’ blogs, and websites with employee opinions on consulting companies ranked slightly better. While all scores varied slightly from 2011’s report, the relative rankings remained the same.
Exhibit 1: Social media still trails one-on-one recommendations and thought leadership channels.
That said, social media sites are indeed gaining in usefulness year over year.
From 2011 to 2012, clients gave slightly higher scores in usefulness to LinkedIn (which rose from 2.42 to 2.75 on a scale of 1 to 10) and private online social networks (from 2.08 to 2.50). Scores for other sites such as Google+, Glassdoor.com, Facebook and Vault.com also rose slightly year-to-year.
Clients told us that a negative comment on social media can eliminate a consulting firm from consideration, especially if they have never worked with the firm or if the comments disparaged the consulting firm’s work.
Respondents were asked: “Have you ever decided not to use a consulting firm after hearing it mentioned negatively by someone or several people in your online social networks (both public like LinkedIn and private)?” A third (32.7%) said they did. This was down slightly from the 39.5% who answered “yes” in the 2011 study.
Companies tended to be more forgiving about negative comments if they already had a good working relationship with a consultant. For those with established partnerships with consulting firms, 44% said a negative comment “wouldn’t affect my opinion at all.” Among those with no such relationships, 81% said that the comments would change their opinion to some degree.
Respondents were asked which types of comments about consultants were most likely to change their opinions. (See Exhibit 2). Almost two-thirds (62%) said comments about a consultant’s delivery capabilities (expertise and methods) would change their opinion, followed by 57% for “client management practices” and 55% for “sales tactics.”
Exhibit 2: Comments about ability to deliver and client management are taken most seriously.
LinkedIn is the most frequently consulted source of comments about individual firms, according to 55% of our respondents, which suggests that consulting companies should monitor LinkedIn for comments.
Consultants may never know how much social media hurt them.
We looked at when potential clients eliminated a consultant from the running after reading a negative comment on social media sites. We asked them, “At what point in your hiring of a consulting firm would a negative comment in a social media site be the most likely time you would rule it out from consideration?” Many said it would happen “before the RFP is issued” (43%), and about a third (32%) said “after the proposal is received by before it is discussed with the consulting firm.”
However, personal contact is still the best antidote to negative comments on social media sites. (See Exhibit 3.) Nearly three-quarters of respondents (73%) said a phone call from a colleague who once used the disparaged consulting firm can reassure them. Some 63% said that a phone call from the consultant can change their mind.
Exhibit 3: Personal contact is still the best way to combat negative comments on social media sites.
The Consultant’s Viewpoint
This year 92 companies filled out an online survey in March and April 2012 that had 24 detailed questions about their current and expected use of social media in marketing. Most worked for strategy and operational consulting firms. They included CEOs, chief marketing officers, other marketing executives, and heads of business development, thought leadership and practice or service lines. More than 60% had annual billings of more than $10 million, and nearly half had worked in the consulting business for more than 10 years.
Their budgets for thought leadership marketing varied, with 60% spending less than $250,000 annually and nearly 20% spending more than $1 million. Only 25% regarded their marketing programs as strong, and more than half said their marketing generated 20 or fewer leads per month.
While they are not yet embracing its full potential, consultants in our survey did say they are devoting more of their marketing budgets to social media. Here is what we found out.
Social media now commands a substantial part of the thought leadership marketing budget and is expected to grow even more.
We asked consultants: “Out of your total budget for thought leadership marketing, how much do you spend on offline, traditional online and social media?" Our respondents this year are devoting 22% of that budget to social media, compared with 37% for traditional online marketing and 43% for offline marketing. (See Exhibit 4.) The proportion has risen dramatically since 2005, when only 2% of the marketing budget was for social media.
Exhibit 4: Social media is expected to consume nearly a third of the thought leadership marketing budget by 2014, up from just 2 percent in 2005.
By 2014, our respondents estimate nearly a third of their marketing budgets (31%) will go for social media.
Social media marketing techniques are not yet considered the most effective.
While consultants are prepared to earmark more money for social media marketing, they are not yet convinced of its effectiveness. When we asked them to rate various consulting marketing techniques, social media did not crack the top 10. (See Exhibit 5.) The best ratings (on a scale of 1 to 5, with 5 being the most effective) went to six strictly offline methods: consulting firms’ seminars, presentations at external conferences, books, press mentions, bylined articles in consulting firms' print publications and other publications. Four other effective tools from the traditional online realm: search engine optimization, email newsletters, online publications and videos.
Exhibit 5: Of a list of 28 marketing techniques, social media tools did not crack the list of the 10 most effective.
Many consultants are not yet proficient in using social media.
We asked respondents whether they used 28 different marketing techniques grouped into three categories: traditional offline, online and social media. (See Exhibit 6.) Nearly all – 96% – had their consultants to do public speaking at external conferences; 92% held seminars themselves. More than 80% published email newsletters, optimized their sites for search engines, posted articles on their websites and wrote articles for their firm’s print publications.
Exhibit 6: We asked consultants which of these marketing techniques they used, and social media options were utilized least frequently.
While 85% said they promoted their firm’s content on their own social networking sites and 59 % wrote guest blogs, less than half used other social media techniques. A majority did not run gated online communities, post content on presentation sites, comment in other online publications’ discussion areas, post event photos on Flickr or comment on threaded discussion sites such as Quora.
Companies are just beginning to train their consultants for social media. About 46% said they’ve had internal webinars or seminars; about 15% have invited third-party experts to train their employees. But 44% said they provide no training at all, and only 36% said they have explicit, codified guidelines for using social media.
Marketing and PR functions have more latitude to promote the firm through social media than do consultants.
Respondents were asked, “Who is allowed to post content in social media to promote your firm?” Their answers indicated that consultants were kept on a fairly tight leash. (See Exhibit 7.) Only about half were permitted to use public social networks such as Twitter and Facebook to talk about their firms; about half are permitted to post to a company blog. Marketing and PR were given more leeway: 85% permitted marketing personnel and 63% permitted their PR agencies to post to social networking sites.
Exhibit 7: We asked consultants who was permitted to utilize social media to market their firm. The results: marketing (and its PR agency) have much more latitude to promote the firm through social media than do consultants.
Even consultants authorized to post to social media sites were not given free rein. Only 19% of respondents said they were permitted to post without anyone else approving it; 36% said the marketing function must first approve the post; another 36% said “management” must approve it.
Companies promote less than half their online thought leadership content through social media, and they are leaving many valuable tools untouched.
Consultants have been slow to realize the potential of social media to promote their content. They were asked, “Please estimate what percentage of all the online thought leadership content your firm has published this year that your firm has promoted through social media sites” such as Twitter, LinkedIn, YouTube, Facebook and Quora. More than half – 51.5% – of the content was not promoted through social media at all, according to our respondents.
Furthermore, many consultants are not adding useful social media features to their online publications, passing up the chance to engage more fully with viewers. (See Exhibit 8.) Only 55% allow readers to comment on their articles online; only 57% give them the chance to share content through social media. While nearly three-quarters allow viewers to click and email an article, only 45% provide buttons to recommend or “like” a story and only 30% poll their viewers on the topics of their articles.
Exhibit 8: Many of social media's most potent tools have been untouched by consulting firms.
Most firms are measuring only top-line indicators of how much viewers like their content, and using the results mainly for marketing programs.
Our respondents preferred hard numbers about their web traffic (see Exhibit 9). About 70% said they counted the number of views; nearly 60% relied on web analytics such as Google Analytics. Far fewer – about 25% – looked at the number of viewer comments and how much time individual viewers spent on an article.
Exhibit 9: When it comes to assessing how well they are engaging viewers through social media, most consultants are content to look at just the numbers.
We also asked respondents to assign a value of 1 to 4 to each metric, with 4 being the most importance. The highest scores were given to “number of viewers who read content” (3.5), “number of times content is shared” (3.0) and “number of viewers who comment on content" (3.0).
Finally, we asked consultants how they used this data. Close to 30% said they did nothing; nearly half used it to fine-tune their marketing programs. (See Exhibit 10.)
Exhibit 10: Consultants were asked what they did with the information about online engagement.
Social media, and the features it inspires for the organization’s traditional web site, can provide a powerful boost to a company’s thought leadership marketing if barriers can be overcome.
Based on our research, we believe that consulting companies will discover that their online publications are a key place to socialize with prospects, especially if they incorporate social media features into those sites. But to do so, they must shift the tone of their online content from a “closed monologue,” in which the consulting firm does all the talking, to an “open dialogue,” which allows for viewers to add their comments and perspectives on the content. These discussion threads are commonplace on social media sites such as LinkedIn and Facebook, but not yet on consulting company’s sites. (For other research on this issue, read this article.
We asked the consultants who took our survey about the key barriers to generating more awareness and leads through social media. (See Exhibit 11.) The top five were figuring out how to best use social media to market content; lack of time to commit to social media marketing; lack of clear understanding about social media’s pros and cons; lack of a marketing plan that synchronizes their marketing activities; and lack of knowledge about how to build online followers and drive traffic to online content.
Exhibit 11: Key Barriers to Using Social Media to Improve Thought Leadership Marketing
How Companies are using Social Media Now
We asked respondents, “Over the last 12 months, what has been the single most effective strategy or tactic that your marketing function has employed using social media?” Here are some of their ideas:
- “We choose a theme for the year and then do the writing and webinars around this. The posts, articles and webinars are free but we charge for the workshops. We also invite guests onto the webinars and to participate on the workshops. We have succeeded in meeting several new clients in this way (through social media.) The new clients have contributed 25% of the revenue we have accrued in the last 12 months.”
- “We produced a videotape series that features short excerpts of unscripted conversations with two dozen of our consultants. Traffic on YouTube has been excellent.”
- “Our president has built up to about 15,000 followers, targeting our industry, programmed about 50 or 60 tweets into his twitter app (TweetAdder) and has them on rotate, randomly putting out 5 a day. About half are ‘helpful comments’ about our industry and half are links to high-performing thought leadership pieces or microsites. Our blog runs through his Twitter as an RSS feed.”
- “We’ve had success lately using comment functions on the online presences of traditional media received in our PR program. Now that news media is also ‘social,’ we can use the comment section to post addendum information, direct readers to a specific place for more information, etc.”
- “We created a LinkedIn club to promote discussion about the industry and to also market our articles and other content. At first we started with 50 members and a year and a half later we are sitting at 2,100. It was a great opportunity for us to keep in touch with our clients and attract more prospects through them.”
Conclusions: Social Media Shouldn’t Be an Isolated Piece of the Consulting Marketing Mix
From the answers to our open-ended and close-ended questions, there is no doubt that a growing number of consulting firms are drawing themselves closer to prospects and clients through social media. However, what was also clear is that social media cannot be looked open as a separate marketing stream. Clients continue to like traditional consulting companies’ traditional marketing tools such as conferences, seminars and even books. And they still like articles – both print and online – to be able to discern whether a consulting firm truly has the deep expertise that its brand marketing claims.
Yet in the next phase of consulting marketing, we see consulting firms learning from the popularity of social media sites such as LinkedIn, Facebook and Twitter – that their clients want to converse online about their issues with the experts they respect. As a result, we think the next phase of consulting firm marketing will be to bring the principles of social media – engaging in online discussion to explore an issue in an open way – to the places on their website that feature their thought leadership content. In other words, the next challenge for consulting marketers is to make their online publications places for fertile discussions of clients’ issues.
Robert Buday can be reached at email@example.com. He can also be followed on Twitter at @bbuday. John Furth of AMCF can be reached at firstname.lastname@example.org. ResearchNow can be reached at www.researchnow.com.