Professional Services Industry Overview
When marketing to the professional services industry, it is important to have a firm understanding of the current environment. The professional services vertical includes specific industry segments such as business services, engineering and consulting services, and legal services. Highly fragmented, with something like the 50 largest firms netting less than a fifth of industry revenue, professional services firms often tend to be smaller enterprises with big technology needs from server to desktop. Collectively, they are responsible for the vast majority of IT spending in SMB. Accounting for over $1 trillion in combined revenue, the US professional services industry includes roughly 770,000 firms. Major players include companies like IBM, Accenture, and PricewaterhouseCoopers; the industry includes accounting, advertising and marketing, architectural firms, consultants, engineering, IT and legal firms, and scientific research service firms, with the three largest by revenue being IT, legal and architectural and engineering services.
Frantz Group has experience planning and executing a variety of successful marketing programs targeting the professional services vertical – promoting a wide array of solutions including document management, time and billing, CRM, wireless solutions, business intelligence, and more. Our Lead Generation services and deep vertical knowledge are well positioned to help your organization be successful in this vertical.
Economists stress that ‘revenue lags economy,’ so, last March we’d hoped that things may be on the upswing for the professional services industry because by most accounts the US and global economies were on the mend (between natural disasters and bouts of global unrest), and, US corporate profits had jumped over 26% in Q3 of 2010 compared with ’09. When corporate profits are up, professional services are in greater demand – so, all things considered, the future looked bright. Now, however, as we look at 2011 US corporate profit numbers, we see growth at only 7.9% for Q3 of 2011 compared to the same period of 2010; 2011’s growth is being reported as the slowest in the last two years, and we’re lagging behind hoped-for progress. Europe’s economic woes are contributing to concerns, certainly. On the bright side, one investment strategy pundit is noted as commenting about his growing optimism that US economic activity is ‘firming to the point that it’s durable.’ This is due to the falling US jobless rate in late 2011 as well as a Bloomburg survey estimating that American economic growth may rise to 2.1% in 2012, counterbalancing Europe’s issues and China’s slowing growth. So, as Bill Murray would say, “We’ve got that going for us.” Total US revenue for professional services rose 5.4 percent in Q3 2011 over 2010.
Some good news for the professional services segment: the trend toward outsourcing ‘corporate functions’ continues to deliver quality work to firms in the sector. This is true in spite of potentially higher hourly costs because of firms’ ability to supply high levels of expertise in an episodic manner.
New applications of business technology (IT) are enhancing the productivity of the professional services industry. These include broader wireless access to business applications, project and service delivery management applications, time accounting, CRM, and business intelligence.
Professional services firms face numerous challenges as they seek to grow their businesses: They must effectively manage massive amounts information and content, optimize billings and revenue tracking in the face of increasing margin pressures, continue to develop human resources and productively manage risk; all of this while building their brand and reputation in the marketplace. To survive in the ‘new economy,’ many firms also need to do the hard work of strategically transforming their business models in order to deliver services in a more timely, cost efficient and profitable manner.