Measure for measure (First published in Managing for Success - May edition)
28th May 2014
Knowing which marketing activities work best is key to efficient business development activity for law firms. Sue Bramall explains how to plan for and measure your marketing activities for maximum impact. Sue Bramall explains how to plan for and measure your marketing activities for maximum impact.
Well executed marketing for law firms will bring in more of the type of business that you want, at the fee rates that you want. However, when marketing a professional service, there is rarely a direct line between any single marketing activity and achieving those objectives, particularly where there are multiple stages in the decision-making process.
Consequently the concept of "return on investment", when used in the context of marketing legal services, can be misleading in the short term and particular care is required when choosing your performance measures.
Some firms may be good at 'being busy' with their marketing, but are not sure what they are getting for their money. Typically, on scratching the surface it becomes clear that marketing lacks clear direction, and there is little communication of objectives amongst the team and management of performance is weak. The choice of activity (and allocation of budget) may be responsive - agreeing to an advertising or sponsorship idea that comes through the door - rather than following a long term campaign to achieve an agreed strategic objective.
There are many metrics to choose from to measure the effectiveness of business development activities. This article outlines some key measures which will improve the efficiency of your marketing activities.
The (fictional) case study of ABC LLP features throughout, to highlight how a firm can implement these measures in practice. The firm has built a niche in providing employment law advice to care homes. It currently bills £48,000 acting for six care home operators, and around 80% of that work is currently employment law advice.
1 Set your strategic objectives
You need to set clear growth objectives which can be measured in terms of overall fee income from a service or sector, analysed by both average spend per client in that service or sector, and number of clients.
If you wish to grow fee income from any source, you can either get your current clients to spend more, win more new clients, or do a bit of both. However, the two objectives require very different marketing approaches and resource allocation – the former strategy is one of cross-selling, which was covered in detail in an article in the February edition of Managing for Success, and the latter is one of client acquisition, which is explored in more detail here.
Take our case study firm. ABC LLP's first objective is to double the number of care homes that it works for, from six to 12, in the next three to five years. The second objective is to increase fees per client by 50%, specifically by winning more property and corporate work in this sector.
So, the firm's measurable objectives are:
- Target number of clients: 12
- Target average spend: £12,000
- Target income: £144,000 (12 firms x £12,000).
2 Understand your market
Knowing your target market is key in ensuring that any marketing expenditure is focused in the right direction. Any target market can usually be defined in clear terms by:
- geography – such as by postcode or drive time from office;
- sector – such as care homes or haulage companies;
- size – by turnover and/or number of employees in a business; and
- income, house value, family structure and so on, for private clients.
It is relatively inexpensive to research or purchase this sort of information to give you an idea of the scale of the potential market, and whether your ambitions are realistic.
ABC LLP discovers that there are 42 care homes within an hour's drive of its offices. In addition to the six clients, it has contacts in another three homes, leaving 33 cold prospects. It currently acts for 14% of the target market, so increasing its market share to 29% looks entirely achievable. The firm also researches other organisations locally that have good links with the homes, notably banks, accountants, property agents and recruitment agencies. This results in a database of around 120 contacts, comprising owners, senior managers and professional influencers, within their target market.
3 Build brand awareness
Steps 1 and 2 have given the marketing team and fee-earners at ABC LLP a clear framework for action. In order to meet the firm's strategic objectives, they will need to:
- create general awareness of ABC LLP within the target audience;
- create specific awareness of the firm's credentials with care homes, such that ABC LLP becomes the firm of first choice for any care home owner or manager;
- promote the established employment law service to target care homes; and
- actively promote commercial property and corporate service to this market.
This will lead to specific measurable objectives over the next 24 months. For the firm's marketing team, this might include:
- develop key messages and marketing materials to promote expertise in care homes, including a new solicitors website, print, email marketing and social media;
- ensure all care home owners have heard from ABC LLP at least eight times (quarterly) in this period; and
- organise two events per year.
For the firm's solicitors, objectives might include:
- ensure relationships have been established with at least 24 new contacts (target one per month);
- introduce commercial property and corporate partners to all six current clients; and
- develop relationships with all the relevant intermediaries (total of eight).
With this level of clarity, it is easy to identify what has and has not been achieved by the solicitors and the marketing team. It is also important to view an integrated growth programme like this over a realistic time frame.
Be persistent. Most of the time, your clients and potential clients will not need a lawyer – they will be busy with daily home and work life. One advert, email newsletter, e-shot or seminar will not build sufficient profile in their minds to ensure that you are the lawyer that they call when the need does arise. Each contact or 'touchpoint', however small, adds to your overall brand profile and reputation.
Like Robert Louis Stevenson, you need to “judge each day, not by the harvest you reap but by the seeds you plant”.
4 Monitor and review
Some business development activities are easier to monitor than others. Digital marketing provides some really clear, simple opportunities to monitor everything from social media followers, to email open rates and downloads, to the keywords people use to find you online. Key reporting tools include Google Analytics, email marketing software, and social media management or monitoring tools like Hoot Suite or Sentegrade. Monitoring these statistics to see which content is of most interest will help you to refine your marketing messages.
A far more important measure is how your business development activity translates to new business enquiries. This requires a system for reporting the source of enquiries, to show which marketing activities generate the most leads, and the most profitable business.
This article is supplemented on the Law Management Section website with a table that provides a structure to track trends in new business enquiries. Click here to view.
The three key types of activity shown in the table are explored below.
Client loyalty and referrals
Evidence of a decline in repeat business or client referrals could indicate problems with client satisfaction. It might also be an indication that one of your competitors is actively targeting your clients. There are a number of options for firms to measure client satisfaction including interviews, focus groups, questionnaires, and mystery shopping. Make sure that you use this information to improve service levels.
All clients are different, and will respond to different approaches. The plethora of media channels (offline, online, social) has multiplied the choice of routes to market, and you need to understand your ideal client and their preferences. For ABC LLP, sending eight e-shots to the care home managers might seem like the most cost-effective way of meeting the target for regular communications, but not if 70% of those emails are not opened, as the manager rarely has time to sit at a desk. Teaming up with a bank and an accountant to run a couple of breakfast briefings each year would require more time and resource, but would be more productive for ABC LLP in networking and relationship building.
Your team spends a lot of time out and about developing relationships and entertaining introducers. Recording who exactly refers work to you, and the value of those referrals, will help you to identify the most important referrers – those that you might wish to find opportunities to refer back to – and weed out the 'hunters', who will go to the opening of the proverbial envelope if it might win them business, but will never think of returning the favour.
5 Convert the enquiries
The number of instructions you secure, divided by the number of enquiries received, will provide the measure of how effective a team or individual is at converting new business opportunities. For example, Joseph at ABC LLP receives 48 enquiries in a month and 16 become clients, so his conversion rate is one-in-three. Joanne receives the same number of enquiries, but only signs up 12 clients, making her conversion rate one-in-four.
If Joanne can improve her sales skills to the same level as Joseph, then this will yield four more clients per month, at no extra cost.
A number of factors affect conversion rates, including the type of work and the competition in the market. By the law of averages, your conversion rate may be much lower in a highly competitive market. However, solicitors with highly developed sales skills can achieve much higher than average conversion rates in most markets. Creating empathy with the potential client over the phone is key – it's surprising but true that simply asking if a client if they wish to go ahead can increase the proportion of enquiries that instruct.
Quite often, as demonstrated by mystery shopping for legal services, enquiries are lost en route to the appropriate solicitor. This can be for any number of reasons, so it is important to identify any weaknesses in enquiry-handling in order to maximise conversion rates.
Legal marketing is not an exact science, but measurement allows you to continuously refine and improve your effectiveness. As the Chinese proverb says:
“Only when you can say you know why you have hit the target have you learned archery”Back to Blog
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