Prof. dr. Frank KwakmanCris Zomerdijk MSc

The future of trademark agenciesWinning business strategies in a changing market

THE FUTURE OF TRADEMARK AGENCIES

Winning business strategies in a changing market

Prof. dr. F.E. KwakmanC.J. Zomerdijk MSc

The future of trademark agencies

isbn 978 90 5261 662 9

© 2008 F.E. Kwakman, C.J. Zomerdijk

Preface

Nowadays, trademarks are a part of our economic life and it is impossible to imagine life without them. A trademark can be a word, a shape, a logo, even a sound, a scent or a combination thereof.

Worldwide the number of registered trademarks is increasing rapidly, and every day an average of 11,000 trademarks is registered (source: Thomson CompuMark ISS database). The strongest growth is taking place in the BRIC countries (Brazil, Russia, India, and China) prompted by strong economic expansion in these ‘developing nations’. In Europe trademarks remain popular as well, with over 500,000 new registrations in EU countries in 2007. Registering a trademark in the offi cial trademark registers is therefore an important, and in most countries necessary step to safeguard a trademark and prevent infringement. In most countries, a trademark right is established upon fi rst registration in the trademark register, and not upon fi rst use of the trademark.

As partners of trademark specialists (lawyers specialised in trademark law) we have noticed that our clients’, trademark agents’ and attorneys’ market place has been subjected to signifi cant changes. Thomson CompuMark wants to be a real partner for its clients and help them operate more effi ciently, productively and with more market focus. Professor Kwakman of the Nyenrode Business University was asked to map this market and provide his insights into the future of independent trademark specialists.

Clients of trademark agents and attorney’s offi ces have become more critical and less loyal, and increasingly compare offers from the various players in the market. A good example would be requests for quotations from organisations to various trademark agents to register trademarks and fi le them in the trademark register. Corporations regard this activity as a ‘commodity’ and therefore require sharp prices.

4 THE FUTURE OF TRADEMARK AGENCIES

We have noticed that the wishes and needs of the industry have changed, as a result of which trademark agents must make choices and invest in order to meet these needs. Not only do trademark agents have to make choices, they will have to make changes in their organisation and change the way they deliver their services as well.

In this study we want to show trademark agencies how the demand for trademark services has been developing, and what that means for their role in the coming decade.

Jan BroeckxManaging DirectorThomson CompuMark

Introduction

The increasing importance of trademarks is a fact. However, the market for ‘trademark services’ appears to be undergoing signifi cant changes. Clients’ needs are changing, and trademark agencies need to decide how they want to meet these needs. Many of these market developments can also be found in other professional service sectors, both in research and in daily practice. For instance, law fi rms, consultancy fi rms, training and education agencies, architects and engineering fi rms also face a changing ‘economic landscape’. For that reason, and for inspirational purposes, some of the trends which apply to the entire professional services sector have been included in this report.

We are very grateful to Thomson CompuMark for the opportunity to research the trademark sector, both from the clients’ and trademark agencies’ perspective, in more detail. The research results are unique for trademark agencies and are based on the response of approx. 230 clients and 180 trademark attorneys across Europe.

Our research fi ndings were presented on 2 October 2007 at a congress in Brussels organised by Thomson CompuMark. This report has impressions and pictures of that day. Apart from that, the research results were further elaborated and converted into strategic advice on how to develop a ‘winning business strategy’.

We thank all our interviewees and participants in our research and hope the results and suggestions in this study may help you to shape a successful future!

Nyenrode Business University, March 2008

Prof. dr. Frank KwakmanCris Zomerdijk MSc

brussels.– On Tuesday 2 October 2007 Thomson CompuMark organized an exclusive conference on winning business strategies for trademark attorneys in collaboration with the Nyenrode Business Universiteit (the Netherlands). The meeting was attended by more than 60 participants from 10 different countries who had come to get acquainted with the spectacular results of two recent extensive market surveys which had revealed important trends, opportunities and threats for the business.

In his opening speech Stefaan Dewulf, Vice-President Sales & Marketing, fi rst had to excuse managing director Jan Broeckx, who was absent because of a minor road accident two days before. Then he pointed at the importance of keeping informed of the constantly changing business environment and competitive landscape of trademark agents and law fi rms. For the fi rst time professional trademark attorneys could dispose of the results of a scientifi c approach by means of market research surveys responded to by over 100 trademark attorneys and more than 300 companies. They were presented by Drs. Cris Zomerdijk, senior consultant within the Holland Consulting Group, who supports Prof. Dr. Frank Kwakman and Leo Kerklaan with research and consultancy in the fi eld of performance management and marketing.

Growth without making choices?In the overview of how the market study was conducted already important differences appeared in the client portfolio: who works with who? Full-service law fi rms deal with 70% large clients (more than 100 registrations). Small clients (less than 16 registrations)

rather turn to medium and small offi ces (1 – 10 attorneys). For large attorneys (11 and more but not full-service) there’s no difference in the client segments (50%/50%).

Top arguments for increase in registrations are different for clients and attorneys. Whereas attorneys in the fi rst place turn to fi nancial value, clients want more increased innovation. On the second argument – differentiating from competitors – attorneys and clients agree but not on the third: easily entering new markets versus more conscious and better understanding.

In the fi eld of client satisfaction and loyalty attorneys tend to put their reputation fi rst but for clients it only comes fi fth. Only half of the clients in the survey would recommend their attorney, the other half even skipped the question. Attorneys think their clients would give them an 8 as overall satisfaction score and 75% would recommend them. So both parties are not on the same wavelength and the approach to the client has to change radically. Critical statements: shopping for another attorney has never been easier and the market transparency has to be turned from a threat into a challenge.

Although a decrease of 6% in trademark registrations is to be expected, attorneys remain optimistic. Too optimistic because attorneys and clients only agree on an increase of online-services.

These are only a few examples but a future strategy can be built upon them. Most attorneys should be more realistic: an increase in turnover can only be realized by focusing on the clients’ needs, by investing in marketing and not only restricting to offering current services

Management Summary

10 THE FUTURE OF TRADEMARK AGENCIES

to new clients. The market is growing, getting more competitive and that implies a strategy to adapt to changing needs.

A ticking time bombAs to Prof. Dr. Frank Kwakman, an expert in the management of professional service fi rms, we must face fi ve critical factors which represent a ticking time bomb.

There’s a growing gap between perception of trademark attorneys and their actual and future clients. Clients’ satisfaction and loyalty are low. New clients are attracted without paying attention to or investing in new services. The expected increase in turnover is unrealistic. Half of the fi rms are unaware of the need to invest in marketing strategies. All these facts are based on recent research and long term personal experience.

The marketplace for professional service fi rms has changed dramatically: competition and pricing pressure have never been as tough as they are today and all branches in this market have to face the same problems and challenges.

The changing client demands are based on three bases: strategic advice for unique issues, solutions for highly standardised services and functional competencies to fi ll in temporary needs. The main question is: will we be able to combine all three?

Traditional monopolies and borders are fading: the market has become more global, there are new players in the fi eld, everybody competes with everybody, which causes an unseen new competitive pressure. Clients become more critical buyers and that implies new professionalized purchasing functions.

On the other end labour markets tend to get more fl exible with an increase of self-employed people creating their own networks, a growing demand for temporary staff and last but not least more and more offshore business units. The answer is providing services across borders and winning the war for top talent.

To deal with these challenges the fi rm of the future should no longer sell hours because clients want to buy results. We have to take in account that the average client does not exist and thus focus on the individual client, build up partnerships with strategic clients: loyalty is highly effective to create stability for the future, more likely than reputation which is always the result of something else and can’t be built on itself.

Client orientation at all levels and continuous innovation of all services can only be achieved by means of intelligent use of it. In this fi eld we are running behind on industry. Technology is available and we only have to make it work in a smart way. Easier made communication and quick availability of worldwide knowledge are but a few of the many it advantages.

Winning business strategies are divisible into two groups: general strategies and differentiated ones for solutions fi rms, advisory fi rms and full service fi rms. All three are faced with the same implications for the marketing function though: external communication and pr, practice groups to stimulate marketing activities, sustain customer relationships and develop strategic positioning.

At the end of his lecture Prof. Dr. Frank Kwakman invited his audience to take part in two out of three workshops after lunch. So we did…

11MANAGEMENT SUMMARY

The stronger the brand, the bigger the miracleThe last ten years the percentage of the world population using the internet multiplied by ten from a fringe 1.7% in 1997 to 17.8% now. In 2007 half of the Belgian population uses the internet on a regular base, in the Netherlands the rate is even higher (73.3%). The user growth in the European Union has reached 170.8% in the past eight years. The predictions for 2020 are even more optimistic. We must face the fact that the world has evolved to one big global village. This offers great opportunities but also includes risks. Whether we’ll be present on the internet and perform online services or not is no longer an issue. The question is: how will we be able to turn the worldwide web into a winning business strategy. Our guide was Frank Swolfs, owner-manager of an independent design and advertising agency and member of the board of the PanEuropean Design Association.

First conclusion: the internet is a new medium with its own rules but it doesn’t offer any more guarantees about the amount of prospects than the old media. Nevertheless it’s free and it can be fun provided that we leave the actual general trends and use all available technology.

Websites are on the whole clear and clarifying but still too much focused on text so that they don’t exceed much brochures on paper.

A website is not a sheet of paper though: it’s a full option television screen including motion, sound, colour and interactivity. Audio-visual elements must focus on ratio, emotion and functionality: not only words but feelings and structure as well.

Although there’s a difference between full service law fi rms and trademark attorneys/companies concerning trends, contents, evaluation and

recommendations, they all have to swap attention for attraction: tell a unique story, share fast, unexpected and involving ideas and captivate visitors by understanding their needs and motives.

The emphasis is on audio-visuals, contents, interactivity, linguistic usage, structure and objectives. Internet changed the world but how can we change the internet? The ideal website is a matter of screening. (S) Set your goal and collect items to reach it. (C) Create a difference for the client. (R) Reach the client. (E) Experience with sight, sound and motion. (E) Enable the client to regulate business instantly. (N) Neaten the website by taking care of a clear and logical structure and navigation.

Customers should do your advertisingWhat’s the ultimate way to manage client relationships for trademark attorneys? A lot of questions to be answered by Drs. Jos Burgers, economist, registered marketeer with over ten years experience of practical business, teaching and consultancy.

To begin with we should ask ourselves a few questions rather than annoying our clients with questionnaires. Customers don’t like them and strategic clients are too valuable to offend them with questions. The only questions are: would you recommend us to others? And: are new customers being referred to us by others?

As to the lecturer marketing starts at the top, not at the bottom. Clients’ fi rst experience is capital: nobody wants to buy, everybody needs help and that’s exactly what we should offer them. How can I help you? And is there anything we could do better? Just asking improves the relationship with the customer. If the customer leaves, keep helping him and do anything you can to get him back. But that doesn’t go without further

12 THE FUTURE OF TRADEMARK AGENCIES

restrictions. First of all there are two ways of making profi t. There’s good profi t and bad profi t. Good profi t means you’ll be successful for years. Bad profi t is a short term return achieved by working with passives (score: 7-8) and criticasters (score: 1-6) at the cost of strategic customers (score: 9-10), promotors, as they are usually called. As a measure of success the Net Promotion Score is the substraction of score 1-6 from score 9-10.

Marketing is not always a question of budget and our business is based on confi dence since it doesn’t deal with fast consumers’ goods. So No Budget Marketing is nothing more than having your clients doing your own advertising. By the way: the only professionals who don’t advertise for themselves are… advertising agencies. What does No Budget Marketing include? How to fi nd and keep customers? Building a strong reputation on a brand name, effective use of mailings, websites… but don’t overfeed your clients with information, the value of having promotors, rewarding those promotors and using them in getting new clients. Totally different in fact from the usual account managers’ talk.

Starting a new approach to customer relation management? Remember these: avoid ‘cattle behaviour’ – the average client doesn’t exist – and dare to make choices, identify your strategic customers, formulate clear criteria, distinguish between satisfi ers and dissatisfi ers, formulate your strategy in account plans.

Make your audience laughThe fi nal tune was played by court jester Bob Delbecque. The big chatterer managed to carry out one the most diffi cult tasks in business: making his audience laugh. Since nobody’s at the same level of sharpness we’ll restrict to some of his remarkable statements. Without any comment…

The future is not what it used to be.

If you always stay with both feet on the ground, you’ll never make a step forward.

Make your customers laugh: don’t sell, just tell.

If everything is under control, you’re not fast enough.

If you’re certain, you’re lost.

You’re thinking about the quality of your life? There’s still enough time to think about that later.

You have to think ahead of things. Thinking is working too!

Be a participant in life, not just a spectator.

This is a gap in the market. But is there a market for this gap?

Loyal customers are made, not born.

Only 17% of the clients leave because the price is too high, 92% for lack of attention.

You’re born with two ears but just one mouth. Start listening instead of talking.

Do what you love to do and quickly fi nd a way of getting paid for it.

Never sleep at the offi ce in the morning. Otherwise you won’t know what to do in the afternoon.

And just a few seconds before the champagne sparkled, the complete audience received a copy of Bob’s latest book Crisis Chance! Signed by the master himself…

Copywriter: Guy Goewie guy@deksel.be