The Choice Matrix
of professional services
June 18, 2009
Silvia Hodges, ABD, Diplom-Kauffrau
Nottingham Law School/UK
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 1
Rationale for study
Research context
Idea for study
Research questions
Methodology
Findings
The model: Choice Matrix
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 2
Rationale for study – marketing
Professional services firms (PSF) have started to
adopt marketing strategies similar to other
(service) businesses (Sharma & Patterson, 1999).
The presence of professional managers and
marketing departments in PSF such as law firms
has become increasingly common (Mayson, 2007).
Changed circumstances force firms to “learn to
compete in a completely different manner. Those
that do not, or that cling tooth and nail to the past,
will not survive” (Bogel & Huszty, 1999: 7).
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 3
Rationale for study – buying
PS markets have matured from relatively
inefficient markets with great asymmetry of
information, little information regarding price or
quality or efficiency of service to
increasingly robust and efficient markets with lots
of information and sophisticated clients,
which results in diminished client loyalty,
increasing use of formal competitive processes
and changed expectations in terms of service
(Jones, 2006).
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 4
Research context – marketing
Marketing in PSF:
under-researched and therefore
warrants further academic investigation
(Day and Barksdale, 2003; Harris, 1997; Hodges & Young
2009; Mangos et al., 1995; Morgan, 1991; O’Donohoe et
al., 1991; O’Malley & Harris, 1999; Vickerstaff, 2000).
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 5
Research context – buying
Given the large market for PS and the
perceived complexity and
higher risk of services purchases compared to
goods:
surprising to find a small number of studies focus
on the purchase process
(exceptions include Day & Barksdale, 1994, 2003; Dawes et
al., 1992; Lynn, 1987; Parasuraman & Zeithaml, 1983; Stock
& Zinszer, 1987; Tinsley & Lewis, 1978)
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 6
Understanding of organisational buying
particularly important in B2B markets,
where the two parties interact over extended
periods of time.
Park and Bunn (2003) considered that such an
understanding should be of particular interest for
medium-sized companies.
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 7
Idea for study
Rather than studying providers and clients in
isolation:
Wilson (1996) recommended simultaneously
examining both sides:
comparing the marketing of the provider and to
the buying behaviour of the clients
(Context: Legal services)
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 8
• RQ1: How do legal services provider firms market
their services to medium-sized companies?
Specifically, do they approach marketing to
medium-sized companies differently from
marketing to larg(er) organisations?
• RQ2: How do medium-sized companies buy legal
services, in the sense of their decision-making
process? Specifically, what are their criteria for
selection and evaluation?
• RQ3: What marketing approaches should legal
services providers apply to reach medium-sized
companies? Would these be different from
marketing to larg(er) organisations?
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 9
Methodology
Due to the paucity of research in this field:
Basic research, qualitative methods
Generation of theory: Grounded theory (Glaser &
Strauss, 1967)
Qualitative data collection: general interview guide
approach
Information-rich cases sampled via “snowball
sampling” (Patton, 2002)
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 10
Research participants
(jurisdiction: England & Wales)
Legal service provider firms who service mid-sized
companies: Managing partners and marketing
directors (“MP” and “MD”)
Clients (decision makers): managers and managerowners in medium-sized companies (“MC)
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 11
Findings – RQ1
While all firms in the study emphasised the
importance of medium-sized companies as clients
and claimed to be interested in and focused on
medium-sized companies,
they typically did not market their services to
medium-sized companies differently from
marketing to larg(er) organisations.
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 12
Firms did not have strategies to address their
special issues and challenges.
If anything, it was hoped and expected that a more
general marketing approach to organisation
should also take care of the medium-sized
companies.
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 13
Findings – RQ2
The empirical study did not confirm the formal,
lengthy risk-reduction strategy of a multi-tiered
decision-making process.
Instead, decision-making in medium-sized
companies was found to be a short “process”,
mostly based on informal word-of-mouth
recommendation and perceived ‘chemistry’ with a
particular professional.
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 14
Relative informality of the process was significant
to the point that clients often do not even check
on the firms that were recommended to them by
their peers.
The positive experience of their peers with a firm
appears to suffice for most decision-makers in
medium-sized companies.
 This also means that firms that are not part of
the evoked set of clients and referrals, have little
chance to be chosen, independent of other
marketing instruments such as newsletters,
brochures, hospitality, or advertising.
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 15
Clients in medium-sized companies particularly
motivated by cost (and not just value),
unless the issue was deemed to be a high-stakes
matter,
when cost became less important than expertise.
>> Quality does not seem to be a criterion, as it is
assumed.
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 16
The Choice Matrix
Developed to answer RQ3:
What marketing approaches should legal services
providers apply to reach medium-sized
companies?
Would these be different from marketing to
larg(er) organisations?
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 17
Buying behavior influenced client’s existing
experience.
Non-personal information sources to create initial
awareness
Once the firms have been identified, personal
information sources become most important and
useful.
Commercial sources more important for clients
without prior experience
Personal contact was more important for those
with prior experience
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 18
For experienced buyer: Firms need to focus on
building and earning ‘trust’:
“You need people you can work with. It’s all about
trust” (MC7).
“[The decision] is more emotional [than objective]. It’s
very personal. I’m the business. I need to trust
people. Do I like them? Trust them? Feel
comfortable with them?” (MC4).
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 19
Buying also influenced by decision-making powerautonomy and related job security.
In-house counsel typically have to report within
their hierarchy, justify decisions, and have
therefore less autonomy in their choice.
Decision-makers in medium-sized companies
(entrepreneurs/owners or CEOs) typically make
buying decisions for legal services alone and do not
have to internally justify their choice
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 20
“[Y]ou have to make in-house counsel look
good to their bosses. They are typically more
interested in their own career path rather than
the business. This is not the case with mid-sized
companies” (MD2).
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 21
This difference in autonomy/job security
influences the decision-making:
The selection of suppliers with ‘good’ reputation
and high credibility is explained by the clients’
desire to reduce the risk.
‘No one ever got fired for buying IBM’ remains one
of the clearest statements of emotional promise in
B2B marketing.
>> It basically means that buying/hiring the market
leader or most highly regarded brand, is the safest
choice as brands are signals for quality
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 22
Not having to be concerned with ‘looking good to
their superiors’,
nor having to legitimise their choice of law firm (if
important litigation case lost), choice of
independent decision-makers more likely to be
based on what they deem to be a sound business
decision, and what they consider to be ‘value’.
>> less brand-specific and security-oriented than
the choices of (more risk-averse) more dependent
buyers
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 23
Figure 9-2 from PhD thesis: “Marketing legal services to medium-sized companies”
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 24
The model does not suggest that all in-house
counsel are at the ‘low’ end of job
security/autonomy, nor that all medium-sized
companies are on the ‘high’ end of job
security/autonomy, as it would not be the case
with VC-backed companies.
It also does not suggest that experienced in-house
counsel do not focus on value. As in-house legal
departments are increasingly under cost-pressure
and expect law firms to work with them to deflect
that pressure, law firms need to seek ways to add
and demonstrate value
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 25
Thank you for your interest!
Silvia Hodges
[email protected]
[email protected]
(248) 495-0374
Bentley University – Art and Science V Conference – Silvia Hodges, ABD – June 18, 2009
Slide 26