Getting Reliable Marketplace Info

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By Jeff Stimpson

If you want honest opinions about your firm, nothing beats a roomful of people who, theoretically at least, don’t care if you like what they have to say about you. Advertisement

A focus group, as opposed to a firm’s established “advisory board,” typically consists of clients and local business leaders offering insights to manage practice development. The group itself often meets just once, though as a concept focus groups can be ongoing. Often essential are clear objectives, participants who represent the market, and a neutral facilitator. When well done, focus groups can reveal attitudes, opinions, feelings, and perceptions that other data-collection methods may not.

Above all, partners shouldn’t pigeonhole focus groups as only capable of benefiting makers of consumer-oriented products: They can really help an accounting firm pinpoint marketing and other operations.

The Nebraska-based firm Contryman Associates has been conducting focus groups for four years, according to Linda Slothower, marketing director. Slothower says her firm began the groups with one office, and now four of the firm’s five offices host them annually. “We’ve gained many referrals from the groups’ members, and enhanced relationships with them. The groups have proven to be very beneficial, in many cases confirming things that we’ve known needed to be done, and provided ammunition to make the needed changes.”

Lisa Rozycki of the LR Marketing Group, Wyomissing, Pa., conducted focus groups as a marketing director in an accounting firm in specific industry niches. “You can obtain great feedback from the group that you wouldn’t normally get from a mailed client satisfaction survey,” she notes. “The added benefit is that ‘A’ clients are genuinely interested in helping the firm succeed, and will cross-sell each other at the meeting on services that they’re currently using from the firm. It’s also another way to show these clients that you value the relationship you have with them.”

An Alternative: In-Depth Interviews

Smith & Gesteland in Madison, Wis., has been using another useful tool in gathering market intelligence: in-depth interviews (IDIs). “It’s been a great alternative,” says Neil Fauerbach, director of business development and marketing. “So much so that we’re willing to pay the premium of doing IDIs over focus groups.”

Interviews are conducted with select clients, prospects, and lost clients, using a professional researcher to conduct the interviews. “We pay a stipend of $100 to the participants in exchange for about an hour of their time,” says Fauerbach, adding that the discussion gathers information about participants’ motivations, their experience with other service providers, their pet peeves, their experience with S&G, “and anything else that comes up.”

“We used this same researcher to conduct IDIs with 10 of our referral sources to gather data and feedback that we fed into our strategic plan,” he adds. “The value of using an outside expert trained in interviewing is that the data gathered is very pure and very deep. Since the participant is anonymous, they feel free to discuss sensitive issues. She’s also very good at analyzing the data, developing conclusions, and creating recommendations.”

Groups’ Makeup

“We usually have about 12 participants,” Slothower says, “selected to represent a cross-section of our firm’s better clients, with a mix of male and female, industries represented, age groups, and other factors. We also include a couple of non-client referral sources or business leaders, and sometimes a prospective client.” Adds Rozycki, “There were 10 to 12 people in each group, selected based on whether they were an ‘A’ client. We gave each partner an opportunity to suggest a participant from his or her client base.

“We used clients, but I’d agree that getting feedback from referral sources in the marketplace would be very beneficial,” adds Rozycki. “It all depends on your needs. What information are you seeking? Is it client-service related, or are you interested in what’s truly going on in the marketplace?” Sam Patrick, president of Patrick Marketing & Communications in Greenville, S.C., and a former marketing director for the firm Elliott Davis, has helped conduct focus groups some 40 times. “I like group sizes of six to eight, for manageability,” he says. “They typically are comprised of the target we identify, and usually a mix of customers and non-customers. For new product or service lines, they’re non-customers. We strive to achieve a balance, and also to identify and represent groups of greatest potential.”

Consultant Allan Boress (www. ihatesellinginstitute.com) says that a limit of 10 is a good number of participants. “Over that is unmanageable,” he says. “I ask clients to select each group at random, based on whether they are an ‘A,’ ‘B,’ or ‘C’ client. Most firms want their best clients (that is, their best friends) in such groups to minimize negative feedback and limit damage. This is totally unacceptable. It must be a random cross-section.” Boress has also had accounting firm clients invite business leaders in, “gather their advice, and then do nothing. This just makes them look bad in the entire business community, not just in their own client group!”

Ruth Dumesic, director of business development for the Madison, Wis., firm Suby, Von Haden & Assoc., says her firm has used clients to determine interests in topics for seminars, but has also used business leaders and non-clients when looking for more in-depth information on service needs. It involved an internal meeting to discuss the purpose and goals, and who would be involved from an internal and external source. “We didn’t use an outside facilitator,” she adds. “We felt that we had organized it appropriately to handle it internally.”

Edmond Russ, partner and chief marketing and sales officer for Chicago-based Grant Thornton, says his firm started its Business Leaders Council in 2000, and since that time, Council members meet twice a year as a facilitated focus group, in the fall and spring. The Council currently consists of 37 business leaders and executives who discuss economic, business, and competitive issues that affect the growth and profitability of companies.

Russ says groups consist of 37 participants. “All are clients selected on the basis of the forward-looking, innovative quality of the CEO. Recently, we’ve been diversifying the membership by inviting executives from organizations with higher revenues ($500 million to above $1 billion).” Members come from a cross-section of industries and markets nationwide. “Although we have 37 in the pool, generally 16 to 20 attend any given session, so it’s a manageable group,” Russ adds.

By way of follow-up, GT commissions an independent market research firm to complete telephone interviews with 300 business leaders and senior execs at companies with annual revenues between $50 million and $2 billion.

Planning and Preparation

Russ says “substantial” strategic and tactical planning went into organizing the GT group, including: establishing the mission of the group; defining criteria for CEO and company selection; site selection and arranging transportation, lodging, and meals; planning the agenda and process; identifying internal and external facilitators; and evaluating the session and recommendations for improvement of the next session.

Slothower says Contryman team members in an office brainstorm about who would make good participants. Office managers and other shareholders help determine issues to be addressed and questions to be asked.

“Preparation is key,” adds Patrick, “as is moderation of the groups. Other keys are involving all parties, clearly articulating the goals of the group, keeping the discussion on track, and avoiding domination by a single person.” A/V aids are also useful, he adds.

Jeffrey Pawlow, CEO and managing shareholder of The Growth Partnership consultancy in St. Louis and a facilitator of focus groups for a small but growing number of accounting firms, advises inviting a cross-section of noncompetitive key clients. Invitation is via a call from the partner in charge of the account, followed by a formal invitation. “We’ll probably invite 25 people, with the expectation that we’ll get 15 to 18,” he says. They’re greeted at the door by the firm’s managing partner, who then disappears for the two to three hours during which Pawlow takes participants through a series of questions about what participants view as their dream relationship with the firm in question. The session is tape recorded, and the execs of the firm listen to the tape after the group disbands.

Using Groups for Clients

Focus groups can send opinions in more than one direction. Five years ago, for instance, Atlanta-based Porter Keadle Moore thought it would benefit clients who were organizing or had recently opened a new bank if they were provided a forum to exchange ideas and share detailed financial information with other banks that were facing similar issues, recalls Laura Snyder, director of marketing. She says her firm started facilitating free quarterly meetings for executives of newly formed bank clients.

PKM is one of the only firms in Atlanta with banking specialization, generating 65 percent of its $8 million in annual revenue from banking clients in 2004. The original marketing efforts were low-key, often just involving asking new-bank clients if they’d be interested in such a group. Invitees were limited to paying clients. Meetings are quarterly.

“This group has proved very beneficial to our clients, and has given us a business development value-add that’s helped us grow this niche within our banking practice,” Snyder says. “We currently have about 80 members of the group representing 45 banks, as compared with about 30 members representing 20 banks in 1999. Based on the success of this group, we also formed a CFO/controller group for our more experienced bankers and those who’ve outgrown the issues discussed in the first group’s setting.”

The CFO events run about four hours, the first half devoted to a structured discourse of hot topics for the quarter, possibly featuring an outside speaker. The second centers on a more informal, roundtable discussion of topics gleaned from attendees, usually by e-mail, before the meeting. CFO/controller events are also open to prospects, charge an admittance fee, and feature discussions on business management issues, such as profit enhancement and growth, rather than on day-to-day operations as in the group for new banks.

PKM has leveraged these meetings and seminars to quietly promote its leadership and expertise. Feedback has been “fabulous,” says Snyder.

“Non-sales-oriented activities such as these give firms an advantage, and demonstrate to the clients that the firms are there to help.”

The Facilitator Question, and Cost

Hiring a market research firm to conduct focus groups can run thousands of dollars. Rozycki says she co-facilitated the first group with an outside facilitator, who charged $1,500, and took them over herself afterwards. Other prices for facilitators range from $3,000 to $5,000.

Outside facilitators can be important, however, as Pawlow says a good facilitator can head off the managing partners’ most common fears about focus groups in general: that the “unvarnished opinions” of one unhappy key client can “poison the entire group,” though once the group perceives him accurately as “outside the firm,” they speak freely.

“I don’t think an insider can emotionally detach themselves in order to conduct a legitimate conversation,” Boress says. “Also, clients and referral sources are much more likely to be open with strangers.”

“We use a professional facilitator from Harris Interactive, a research firm which also conducts the subsequent survey,” says Russ. “The facilitator does an excellent job of drawing out members’ issues, concerns, and ideas, and keeping the pace of the meeting going. In addition to this typical normal facilitation, Harris employs proprietary software during the session that enables all attendees to voice their opinions and thoughts electronically, and facilitates the capture, analysis, and prioritization of participants’ input.” Cost, he adds, is approximately $20,000 per session.

It’s worth it, he adds. “The focus group component uncovers the key issues that form the questions for the survey. Together, the two components help us understand the business issues that the leaders of our client organizations are facing.”

Sometimes you can find a good facilitator right in your firm. Slothower’s firm uses an employee of one of Contryman’s affiliated companies, an experienced business consultant who’s been with the firm for a number of years. “As marketing director, I’m also part of the facilitation team. The only outside costs we incur are lunch for participants, and a small gift, so our costs are less than $30 per person,” adds Slothower.

“Depending on the complexity of the topic, outside moderators can be extremely helpful,” says Patrick, who says one group he participated in once came down to a shoving match between other participants. “Also, inexperienced moderators can end up not getting you the information you need.” There are many reliable providers of this service in virtually every market of size, he adds, including many who specialize in consumer goods, retail, financial services, and other areas. “I’ve paid as much as $3,500 per day for a good moderator who conducted multiple groups in a single day,” Patrick adds.

Other potential costs of groups, he says, include facility rental. “It’s better to be in a place where observers are not visible to the group, which requires a one-way mirror set-up,” he notes.

Resulting Follow-Up Action

Slothower cites several initiatives of her firm that stemmed directly from a focus group: updating and remodeling offices; increased focus on timeliness, with systems developed to address this; additional detail on invoices; involvement by more than one team member for every key client; greater focus on offering ideas to clients, rather than waiting for them to ask about something and simply responding; annual, rather than occasional, client-appreciation events; discussions of the broader range of services provided by the firm; and more frequent visits to key clients’ businesses.

Focus groups can help launch niche efforts and programs, if only by giving the champion partner of the project more confidence and peace of mind. Patrick recalls launching an eldercare program at his firm based on “confirmation of the opportunity” through focus groups. “We also launched an advisory board in a tough market based on positive reaction to the idea,” he says.

“One of the themes we often hear is group members wanting the firm to be more proactive in telling them things that help them run their business better,” Pawlow notes. “Many participants said they wanted our partners to be more proactive in bringing ideas to them,” Rozycki recalls. “That was an eye-opener for some partners, who had been contacting clients infrequently.”

Misconceptions and Best Practices

Among the biggest misconceptions accounting firms might have over using focus groups, Russ warns that the forum might be “misused as an opportunity to sell accounting services, rather than to elicit important information of benefit both to focus group participants and to readers of the survey results.”

“I think accountants are very risk-adverse, and view this form of gathering feedback as very risky,” says Rozycki. “They’re often afraid to hear what their clients think of them. They don’t like criticism. But wouldn’t you want to find out what you need to improve on before it’s too late?” Boress maintains, further, that accounting firms will go out of their way to not learn how poorly they might be servicing clients.

“It’s very hard to remain independent when asking pertinent questions about the firm or its services. I’d use an outside resource that’s independent of the accounting firm,” says Dumesic. “For example, a marketing research department of a local college or university, or an actual research consultant.”

“It’s important to use unbiased questions,” Dumesic also warns. “Many people are wise to how they think they should respond in focus groups, and that’s not getting to the purpose of what you want from a group. You want truthful, honest answers to questions, not answers on how participants think they should respond.”

Russ advises being clear about the expected outcome, the questions to be posed, the related quantitative study to be done, and the benefits to participants for taking part.” Often, he even asks CEOs why they’d want to take the time to attend GT’s focus group. “Many respond that they first came as a favor to the engagement partner who has served them so well,” he reports, “but after participating in their first session, they realized that they’re the ones who derive the most benefit. They find the interaction with their peers extremely helpful in understanding their own current business issues, and in uncovering new, creative ways to deal with them.”

Worth the Effort

Focus groups are no cure-all, Patrick stresses, and don’t replace quantitative homework and thoroughly researching an opportunity.

“They’re time-consuming whoever organizes them,” says Slothower, “but the benefits far outweigh the cost.”

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Posted at November 21, 2005
Filed Under BSG MARKETPLACE - Products, Services and Vendors |

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