Posted , in Differentiation
Why EY, KPMG, and PwC may need to face up to some uncomfortable truths about their advisory brands
A colleague of mine said something that shook me to my marketing core the other day.
We were talking about the bike ride from London to the Loire Valley that a few people from Source will be undertaking in September and for which she, along with another colleague, will be driving the support vehicle. Bemoaning the fact she had to spend a weekend in the proximity of men wearing lycra (a prospect apparently not sufficiently offset by the chance to spend the weekend in northern France eating cheese) she consoled herself by saying: “At least I get to drive your Land Rover and don’t have to drive some crappy Skoda or something.”
Some crappy Skoda? Let’s get a few things on the table at this point: My colleague was born in 1990. One year later, Skoda, which had hitherto been owned by the Czechoslovakian state and had the sort of reputation you might expect from a publicly owned car maker from Eastern Europe, began a process that would take it towards privatisation. In 2000 it became a wholly owned subsidiary of the Volkswagen Group, which had the sort of reputation that German car makers have. Which, putting recent scandals delicately to one side for the moment, is somewhere up there with Michaelangelo’s reputation for decorating ceilings, or Einstein’s reputation for having an idea. It’s what us Brits would call “rather good”.
At this point in Skoda’s history, my colleague was 10. Like most of her generation, I don’t believe that she has anything other than a passing interest in cars today, so it seems a reasonable bet that she couldn’t have cared less about them when she was 10. In other words her exposure to Skoda’s poor reputation would have been fairly limited.
In the years that followed, Skoda embarked on a campaign designed to make everyone realise that by buying a Skoda they were basically buying a VW for less money. And, by and large, the car-buying public seem to have bought into that. But if, 18 years later, my colleague still thinks of Skodas as “crappy” then my guess is that she’s far from alone. After all, they haven’t been crappy for at least two-thirds of her life.
As a marketer it’s a fairly depressing thought that 18 years of advertising to someone who’s still only 27 isn’t enough to change perceptions of a brand. But neither is it completely unfamiliar. The current iterations of the advisory businesses of EY, KPMG, and PwC have been going for only slightly less time than Skoda has been making good cars, and Deloitte’s has been going for longer. But we still regularly hear clients say that they’re “just a bunch of accountants”. No, they’re not! They’re a whole lot else besides. What on earth do these firms have to do differently to change people’s minds?
Before attempting to answer that, it’s probably important to acknowledge that some people might see the association with accounting as a good thing. Or at least as something that does no harm. The case is a reasonably strong one: Putting aside recent auditing scandals (in much the same way we set aside VW’s attempt to defraud consumers by pretending that its cars were killing the planet more slowly than they actually are), accounting brands project stability, integrity, pragmatism, and security, at a time when those words are as welcome as they’ve ever been. Applying them to associated activities, like consulting, also carries with it the idea that business challenges will be addressed with a financial outcome in mind. Which, at a time when we’ve heard a CEO say: “We’re working on our digital strategy—I have no idea what that means,” is probably a good thing. What’s more, the Big Four have been growing their advisory businesses perfectly successfully over the last few years. If it ain’t broke…
But I think the case for change is greater, and among a long list of reasons, which include the idea that these venerable old accounting brands are increasingly looking like damaged goods, one stands out: It’s the word “just”. The Big Four are just a bunch of accountants. In saying that, clients aren’t belittling accountants so much as saying that they’re not the right people to help them address the big challenges they’re facing today. I think there’s a subtext that reads: “Accountants don’t do digital.” And I think that unless something changes, at least three of the Big Four are going to find that the chain attached to their accounting anchor isn’t long enough to allow them to go where they want.
So, a few options present themselves:
1. Keep calm and carry on. One interpretation of my colleague thinking that Skodas are still crappy is that these things simply take a very long time. The Skoda brand, at least when applied to cars, goes back to 1925 and it doesn’t seem completely unreasonable to suggest that the length of time it takes to completely change a brand might have some relationship with the length of time over which the original version was extant. In which case my colleague might never be persuaded that Skodas are anything other than crappy, but her grandchildren will almost certainly think of them as reasonably priced VWs.
Best suited to: EY. Building a better working world has given EY a purpose and a new star to follow, and my sense is that the arc of its story is slowly bending in a new direction. What’s more the abbreviated version of the brand (previously known as Ernst & Young) was born at the outset of the digital age, and although we’ve got data that suggests some people may have lost the firm in the process, time might reveal that to be a blessing in disguise.
2. Force the change. The difference between this option and the last is that this one allows for the possibility that things aren’t actually heading in the right direction, and that a step change is needed. Setting aside the fact that some part of its success may be owed to the fact that its brand just doesn’t sound as “accountanty” as the others (not being made up of a bunch of letters), Deloitte is arguably the best proponent of this approach, to the point where it’s not really the subject of this blog. It went after a new market aggressively and is a great example of a firm that was prepared to put its money where its (sizeable) mouth was. To use the anchor analogy, I don’t think it cut itself free, but I think it made itself a much longer chain.
Best suited to: PwC. For some time the broad consensus has been that Deloitte and PwC have been pulling clear of EY and KPMG from an advisory standpoint, and although EY has arguably started to bridge that gap, the data suggests that the advantage still persists somewhat. And yet, despite the aggression that it showed in buying Booz&Co (now Strategy&), and making a number of other acquisitions, the PwC brand still feels anchored to its past somehow. The success of its audit business, especially relative to Deloitte, is almost certainly a part of that story, but it just doesn’t feel as though the needle is moving on PwC’s brand in the way it is on Deloitte’s. Nevertheless, it would take a brave person to recommend the creation of an entirely new brand for PwC’s advisory business, so my sense is that it needs to invest some serious time figuring out what it wants to be, and some serious money becoming it.
3. Create a new advisory brand. Professional services firms don’t have the greatest track record of rebranding (Monday, anyone?) but it can work, and there are occasions when it’s the only option. The most obvious example of this is the renaming of Andersen Consulting, which became Accenture in 2001. In this case the firm had no choice, but against the expectations of many in the industry (and even within the firm itself) the Accenture brand has been an enormous success. Its structure helped, but so did its willingness to spend big. Accenture just went for it, and it’s now reaping the rewards.
Best suited to: KPMG. Possibly. KPMG has probably suffered more than most through its association with recent accounting scandals, and that trouble has come at a time when its advisory business is struggling to match the pace being set by its Big Four peers. Recent months have seen a steady trickle of articles questioning whether the firm can survive, and while the greatest danger almost certainly comes from the poisonous nature of the narrative itself, that makes it no less of a threat. But although KPMG arguably does more to hold itself back than any of its Big Four peers (which is saying something) it remains a fundamentally good firm, with good people doing good work: We’ve got data to prove that point—I’m not just saying it because I like the people (though I do). What’s needed, then, might be a complete change. Like PwC, KPMG needs to start by figuring out what role it wants to play in the world. If that role is focused on applying itself in familiar ways to new challenges—managing the back-office, financial and risk implications of digital transformation, for example—then dropping the KPMG brand from its advisory business would probably be unwise. Nothing I’ve said here should be interpreted as me suggesting that the KPMG brand is broken; on the contrary, I think it remains a colossus in the accounting world and could yet help it to be a colossus of the advisory world. The question is whether it’s going to hold the advisory business back if it decides it wants to be at the leading edge of the digital agenda, going toe to toe with the likes of Deloitte, Accenture and McKinsey on the front office and strategic aspects of digital transformation. In that scenario, a more radical approach might be better, one that sees KPMG ploughing its significant financial resources into creating a new advisory brand before those resources dwindle and it’s too late to do so . While there are almost certainly lots of options on the table, and a lot more careful thought is needed, I think nothing should distract from the idea that it’s decision time for KPMG, and that it needs to do something big, and do it fast.
Posted , in Marketing
Posted , in Marketing
Posted , in Marketing