Well let’s talk about their success for a moment. I just picked out one or two things. If you take, first thing is durability. One of the things that I find intensely irritating about when marketing is taught is this dangerous concept called product life cycle. There are products and brands in this world and we still love them both today. There a hundred, 200, 300 years upward. And many of the products we tell the market is to worry about their life cycle. We’ll long outlive the three or four year life span of any brand managers job. But in this industry, you’ve got businesses that are several hundred years old. Some of the law firms based in London, just across the river from where we’re holding this seminar, are 2, 300 years old. Price with the housekeepers when I was a partner, it was created in the Victorian period and throughout the period that time, that hundred years since then. They’ve net margins of around 30, 35, 40 percent. Rain. Shine. Economic. Recession. Economic growth. War. Depression. I think that’s a really successful business model. And marking needs to understand first why are they successful before it can apply its Tawson techniques to help them grow their businesses even further.
But one final thing about this industry is their amazing influence. All of these people are accountants, consultants, lawyers. They’re in the business of selling and marketing ideas. I heard recently that Stalin said, ideas are as dangerous as guns. We don’t let the population have guns, why should we let them have ideas. And this industry has been fabulously successful at understanding trends in the world. Understanding the thinking of the business people in particular and politicians, and creating offers, ideas, practices to meet those needs. Now that’s how they would say it, in essence what they do is they make things up and sell them to business people across the world and they do it really, really well. Ideas like globalization and share holder value and even originally the Boston Matrix, were created by this industry and sold so that they can make money. So they’ve been incredibly influential.
And just one example here, I’ll go through this quite quickly. This is a firm, probably one of the leading accountancy firms in the world, Deloitte. And, I just show you where it came from, it looks very old and Victorian there. But Bill, William Deloitte, Bill, set up his business in the bankruptcy courts of England in 1845 when he was 25 years old. So he looked very, very different from that picture. And at the time, it’s very, very difficult for people today to really understand how revolutionary and scientific the railways were at the time. It was the first time in human history that mankind can go faster than galloping horse. They created new ideas like holidays and vacations. Here in England, the tiny island, the railways make consistent time and reality for the first time ever. Before the railways, Bristol has a different time to London, for instance. And it doubled the iron manufacturing output in England. They have a fantastic influence across the world.
And what Bill Deloitte, old Bill the accountant recognized this and he was the first person to create a method of understanding the way this new form of business would work, this industrialize service business. And he found a way of doing their books which resulting in two things. Firstly, he uncovered the first big fraud for which he got a great reputation. And secondly, he became the first ever public auditor in the world. And he took in his first partner a few years later and he got a reputation for being Avant Garde for exploring new ideas. For instance, when he opened his office in New York, he got as a client Procter and Gamble and the new soap companies because at the time soap was again a revolutionary product.
And today, this business still bears his name a hundred years later. They still want to be pushing the envelop, creating new ideas, solving unique problems for their clients and this is one of the big four accounting companies in the world. Employing hundreds of thousands of people with several thousands of partners and several billion dollars worth of revenue just from starting from the energy of this man. And this is typical of many of the professional services heritage, high margin intellectual energy. And also run by people who are powerful intuitive marketers.
The irony of this industry is that people like Bill and many, many thousands of partners in the world since have created amazing revenue and yet they despise the world marketing. The marketers they do employ often work at low levels in the business. So they do great marketing and they create enormous wealth, but they will not acknowledge the formal practice of marketing in their own business. For them, marketing has remained caught up in soap powder and washing dishes and other things. And it doesn’t seem relevant to their great intellectual enterprises.
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