Successful business development and the use of a database
In discussion, most firms agree that they should start their business development activity by reviving relations with past clients, but the reality is that only a few of them do so. The reason most firms are unable to capitalise on the potential business opportunities arising from clients’ changing needs is the lack of an up-to-date database.
Many firms have literally hundreds of former clients who, due to the change in their age or lifestyle, could benefit from a whole range of services supplied by the firm. Sadly, due to a lack of information reaching them, they have probably sought these services elsewhere, not even thinking that their “family solicitor” was the best place to start.
A simple database recording client details, completed at the time of the first instruction and updated, for example, bi-annually, can open the door to providing regular information to clients, in a letter or brief newsletter and keeping your firm’s name uppermost in their minds. This is a cost-effective marketing exercise which can be targeted at specific clients according to the service or services being promoted. It is not difficult to devise a simple database and keep it up-to-date but it is important to remember that it is now necessary to register the database. Further details can be obtained by phoning the Data Protection Commissioner on 01625 545745 or via the Internet (www.dataprotection.gov.uk). This link is also provided on the Society’s web site www.lawscot.org.uk
Many firms have yet to realise fully the potential of grouping services together to meet the needs, e.g. of a young family, especially if the firm offers financial services or works with a financial consultant. Apart from the obvious house sale/purchase service, there is a range of financial products relating to mortgage, pensions, school and university fees. There may be additional services related to personal injury, employment law or advice on establishing a business which could be of use at some time. For the older client, advice on wills and executries (if this hasn’t already been dealt with), selecting nursing homes, etc. Packaging services creates the opportunity to make the client aware of the range of relevant services, so that your firm is the first port of call when the need arises.
Promotion and new clients
Promotion is a topic high on the list for discussion with many of the firms using the Marketing Advisory Service. The choice of a professional services provider is usually based on trust, so creating opportunities for potential clients to meet you is most likely to result in a new client. While advertising (especially Yellow Pages) seems to work more for “criminal” firms, generally activities like networking, seminars (your own and appearing at other people’s), local involvement in community groups, etc. appear to be effective at generating new clients. For smaller firms, especially outside the cities, writing an occasional article for the local paper or speaking on a local radio programme may give short-lived, but influential, celebrity status and credibility as a result of being selected, even if you made the initial contact and offer to contribute.
Where a firm spends money on promotion the guidelines for making this promotion effective are clear. Firstly, it must be attention catching; secondly, show the main benefit the service offers the client (and what is distinctive about this service compared to others); and, thirdly, clearly confirm what the client is expected to do as result of the message. The promotion must mirror the ethos of the firm (i.e. its branding). In fact the consideration of branding must be applied to all aspects of the firm. A useful statement to remember is “Everything the client experiences, counts”.
The effect of any promotion is cumulative. Rarely is a single promotional message the only reason that a firm wins a new client. This means that firms need to be consistent in the messages they give out and have thought out the process through which a potential client is likely to go. It is important to consider the break even point of any promotional campaign before embarking on it, .i.e how much extra business should it generate in order for it to be judged successful. Similarly more firms need to track the effectiveness of their promotion, often by asking their new clients how they became aware of the firm.
Many firms ask about setting up web sites. The main issue for a firm is to determine what it expects a web site to accomplish. Many are simply used for electronic publication i.e. the firm’s brochure on-line which may be all that the firm needs at that particular time, but they must be aware of the rapid growth in this market and the user’s expectations of this form of communication. Other firms seek something more sophisticated where they can have greater interactivity with potential clients. Whatever level the firm requires, it needs to be thought out in advance before embarking on setting up a site. And once it is constructed, firms must remember that the site must be updated regularly both in content and scope.
A further common area of concern for the firms visited by the consultants is an uncertainty of what their own hourly rate should be for private client work. Many revert to the suggested hourly rates in the “Fees Supplement” but have not calculated if this is enough to cover the costs and profits of providing advice in their firm.
The firm’s profit at year or quarter end should not be a surprise to any of the partners. Those firms which compile - and analyse - monthly management accounts will be able to identify adequacies or inadequacies in overall income and costs. But a firm can only take proper action to control its overall profitability, when it knows how much each of its individual departments or services contribute or drain the overall profit. It is not good business planning to say “we must increase turnover in x department - we know that is profitable” when e.g. a slight reduction in the unprofitable department, or redeployment of certain resources in the firm could solve the overall problem, with a great deal less stress, and less promotional cost, to the whole firm!
Of course, some departments within a firm might run at a much reduced profit, and the firm may decide to keep those in place as they attract new clients to the firm. But the consultants do ask the firms to bear in mind that if the first matter is provided at break even, or just above it, the second should be completed very soon after the client joins the firm, and definitely at a higher profit than the “average” in order to balance out!
Many firms are still insecure about warning clients about the likely fees for a project. We all know it is difficult to be precise about legal work - but surely an experienced solicitor can give a client a rough idea of what to expect - and can periodically warn clients about costs as the work goes on. The firm’s “hourly rate” in itself is meaningless to clients, unless they can have some idea of how long the job is likely to take too.
This further detail about fees requires a little organisation and a little reconciliation of time against each matter on an ongoing basis - amounting to a little administration for a great more client satisfaction. When client and solicitor have had an ongoing, open dialogue about the full ongoing costs of handling a matter as it has progressed, as well as the details of the matter itself, it is both easier for the solicitor to feel he or she can bill the full cost of providing the advice, and for the client to accept that the true cost is good value for money.
The Marketing Advisory Service offers free professional advice from marketing consultants, tailored to your own needs, whether you are in private practice, commerce and industry or the private sector.
If you would like to take advantage of the Marketing Advisory Service, or would like a leaflet explaining more about it, please contact Sharon McFarlane at the Law Society of Scotland on 0131 476 8151 or e-mail her at email@example.com
In this issue
- President's report
- Marketing Advisory Service
- Developers have human rights too
- What difference will the Human Rights Act make?
- Preparing reports for the court in family actions
- Let's talk about money!
- Reservations about frivolous grounds of appeal
- Contention over confidential soundings
- Standard instructions for domestic conveyancing
- Making money on the web
- When clients ask and expect too much