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Diary of a CPSM Candidate – The End is in Sight!

June 4, 2013

SMPS CPSMIt took me 3+ years of owning the book and 2 solid months of reading it, but I have finished reading The Marketing Handbook from cover to cover, whew (back of hand glides across forehead). While that in itself is an accomplishment, I still have 1 month of solid studying in front of me in order to prepare to take the CPSM exam. On June 28th, a group of SMPS Boston members will be sitting down at 9 am with our pencils sharpened and our brains filled with professional services marketing facts and tidbits to complete the 3 hour exam. Think of us and send us your positive energy.

Last week’s study group centered around Domain 6. This is the domain that helps the marketer become an integral part of their firm. Think of it as the information you need to know if your career goals include any title above Marketing Manager*.

One of the most important aspects of this is being able to read, digest and understand your firm’s financials, including all of the equations that the accounting people pepper throughout their reports. Better yet, you should be smart enough to know which equations are giving you a clear picture and which are lying.

My personal favorite (to pick on) is a firm’s overhead rate. This is your firm’s Overhead Costs divided by Direct Labor. Overhead includes operating expenses and indirect labor, i.e. marketing and admin labor. A good firm-wide target is 60-65%. Most firms will set utilization rates for each employee and some go as far as to focus staff meetings on who is and isn’t meeting their utilization targets – talk about the stick vs. the carrot. However, the dirty little secret about utilization rates is they’re the easiest metric to game, making it entirely possible to have a firm with an 80% utilization rate and negative profitability.

Instead of focusing on utilization, I prefer to focus on net fee by staff. To get at this number take your net fee (Revenue minus Consultants and Reimbursable) and divide that by the Number of Staff. I recommend looking at both net revenue by overall staff and net revenue by direct staff. By studying this number you’ll have a better gauge of how much billable work your firm needs to produce each month to meet profitability goals. It also gives you a good metric to look at when you’re thinking about adding staff.

The most important thing to understand is that there is no one number that will give you an accurate picture of the financial health of your firm. The best financial reports are those that track consistent metrics over time. Choosing those metrics is an exercise in determining what is most important to your firm.

Enough about financials. As a bonus for sticking with me through that discussion I’ll throw in a book recommendation. If you too have spent the past few months immersed in business reading, it’s time for a laugh out loud novel to transport you to a lighter, less serious place. Where’d You Go, Bernadette by Maria Semple delivers. You can catch me in the streets of Boston literally laughing out loud as I listen (thank you audiobooks) to the rants of Bernadette, a MacArthur Grant recipient and former architect, as she navigates agoraphobia, life with her Microsoft tech star husband and being the non-conforming “private school mom” to an incredibly bright and sweet child. It’s not all laughs, but it’s full of poking fun at humanity and the idiosyncrasies of modern day life.

This brings us to goodbye as I’ve reached the end of the last domain and the last post of the diary series. I truly hope you have enjoyed reading my posts as much as I’ve enjoyed writing them. And that perhaps I’ve planted a seed of inspiration in you to take on the challenge of getting CPSM designation for yourself. You can catch up on past diary entries here, here, here, here and here:

* This is a huge generalization as titles vary considerably by firm

2 Comments leave one →
  1. June 5, 2013 7:42 am

    When I prepared for my CPSM exam in 2003, I read the Marketing Handbook from cover to cover. That was the only thing I read. Someone I respected told me that the exam would be harder for me because I had so many years of experience and knew that there was more than one way to do something, but the exam has only one right answer for each question. So I chose to work with only one resource and stuck with that. These days, I know that the exam uses multiple sources, so I hope your studying included more than just the Handbook. Good luck to the Boston SMPS members on June 28, and to everyone else who takes the exam.

  2. June 6, 2013 11:55 am

    Thank you, Bernie. We have an exhaustive list of recommended reading (many with outdated and irrelevant information), but have been told by many people that Marketing Handbook remains the main source followed by Ford Harding’s book Rainmaking.

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