Tying the knot

Last summer, the Chartered Institute of Marketing’s chief executive, Peter Fisk, outlined his vision for the future of marketing.  He said ‘Marketers must look at how they can create great marketing, which also delivers business performance by working through the detail of how what they do impacts on the business’.

The fundamentals

Peter’s vision is fundamental to marketing, and marketing’s accountability has been hotly debated for many years now.  It is an issue that affects all businesses, whether they have a consumer, industrial or professional services focus.  There are several barriers that affect the measurement of marketing’s effectiveness.  Firstly, marketing is often separated from the business development process, and therefore there is no link between marketing and business development activity – or its results.  Secondly, marketing is often perceived to be the role of a department, sometimes divorced from the ‘real’ business conducted by the rest of the firm.  Finally, marketing plans tend to be backward-looking by nature and reflect what was perceived to work or not work in previous years.

We are convinced that marketing can demonstrate a measurable return on investment if it is linked closely to a firm’s business development strategy.  In doing so, marketing planning becomes more focused and in turn more effective.  The responsibility for marketing will also be widened, so that it isn’t just the remit of one department.  Law firms can gain a better ROI on their marketing spend both by tying it more closely to their business development process and by understanding the different levels of marketing and what to expect from them.

The beginning

The first point on the road to marketing effectiveness is to start with a firm’s corporate objectives.  These may relate to turnover, they may also address the type of work or clients the firm wants.

They may also cover what industry it would like to specialise in.  Whatever the objectives and their timescales, these are the foundations.  They should guide all the marketing and business development activities that the firm subsequently undertakes.

The dream portfolio

In our work, we often ask law firms what their ideal client base should look like in two to three years’ time.  Invariably they say it would be different to their current one and refer to a ‘dream’ client portfolio.  This portfolio will bring a number of different benefits such as a better and more enjoyable quality of client relationships or greater kudos from having ‘high profile’ clients that generate other new client interest.  Some also hope for more of the type of work that stimulates them, whilst others seek a specialisation in a particular industry sector.

Underpinning all of these desires is the fact that these law firms invariably seek greater profitability.  ‘Dream’ portfolios are achievable and a firm’s corporate objectives can guide it (initially in broad terms) in defining the types of clients and prospective clients it wants.

Having looked into the future, the next stage is to look at the existing client portfolio and see how far from the dream it is.  The gap will guide the firm in deciding which clients need to be kept (and protected from competitor advances), which do not fit the dream and need pruning, and how many new clients are needed.

Pruning

For those clients that do not fit the ‘dream’ portfolio ambition, the firm needs to consider whether they should continue to work with them.  From our experience, many fee-earners spend significant parts of their fee-earning time working for clients they wished they didn’t have.  Moreover some firms would be financially better off they didn’t serve these particular clients.  Our message here is simple, if somewhat challenging.  If law firms could eliminate work that is of a low level and / or high hassle, then more time could be devoted to carrying out the marketing and business development aimed at winning the high value and high profit clients.

Triggers and filters

To begin the process of deciding exactly which prospective clients they should seek to approach, law firms need to analyse these potential prospects using ‘triggers and filters’ selection criteria.  Triggers are those factors that indicate that it may be timely and appropriate to develop the relationship with a particular prospective client.  For instance, there may be a change in management or the business may be going through a period of significant change.  Filters are those factors that make it easier / more difficult or more attractive / less attractive to do this.  For example, we may have a track record in their marketplace or the incumbent provider may be perceived to be too big / small to serve their needs.  By implementing triggers and filters selection criteria, a list of the most appropriate prospective clients can be identified.

Widening your radar

This list of prospective clients should not be kept to the chests of the fee-earners alone.  If the firm is to succeed in winning a particular client it will need to demonstrate tremendous understanding of their business and the issues facing them.  The greater the knowledge, the more focused and innovative the firm’s solutions will be (in turn setting up a barrier to any competitors considering courting the client).

In law firms, fee-earners have a host of other responsibilities including business development.  We therefore suggest sharing client and prospect lists with a wider audience in the organisation.  It engenders greater team spirit and shares the load of business development (and marketing) amongst employees and can also lead to new business.  As an example, one of our clients published their prospective client list in the firm’s coffee area.  This in turn led to a secretary helping her firm win a piece of business as she recognised one of the targets as the company her husband worked for. 

Economies of scale

So how is this going to make a law firm’s marketing more effective?  When targeting a new client, we need to know as much as possible about them, otherwise the offer we make is likely to be ill-informed and unsuccessful.  One of the key tactics to winning a new client is securing knowledge through information gathering.  This helps us understand the prospect’s business and competition.  It also makes us aware of the current business issues that affect them and reminds us of the key industry developments that will have an impact on them.

With their firm’s prospective and existing client list to hand, legal marketers are in a better position to gain economies of scale from market intelligence and research.  This requires identifying ‘similarities’ in the prospect and client base (for example industry sectors or size of company) and segmenting them into groups.

Research expenditure can then be refocused to be more supportive of the fee-earners’ business development effort.  We’ve heard of firms setting up ‘industry watchers’ who monitor their clients’ particular industry developments, investing in very specific newsfeed systems or conducting research relating to a particular issue that a group of clients / prospects are facing.

Rethinking the marketing strategy

Now equipped with a defined prospect or client list and a very focused stream of intelligence, the firm can rethink its marketing strategy.  This requires a degree of bravery – it means re-evaluating priorities based on the firm’s targets.  The fact that we’ve always carried out a particular form of activity will not necessarily help us achieve our future objectives.

There are three levels of marketing to your prospective and existing client base which aim to encourage them to want your services.  We believe this is achieved when the three levels of marketing are working concurrently.  Collectively they create the image or ‘brand’ – which makes clients choose to buy the services of that firm over another.

These three levels are:

  1. Corporate marketing – activities that create a general awareness and understanding about what the firm does in general.
  2. Capability marketing – those activities that specifically illustrate its capabilities.
  3. Contact marketing – these activities involve direct contact between the client / prospective client and people from the firm and demonstrate the firm’s understanding and support of its prospects.  They seek to add value to the client based on this understanding.  It is these activities that differentiate a firm from its competitors.

From our experience, whilst the general understanding of marketing within legal firms is good, the amount of contact marketing (which is almost exclusively the remit of fee-earners) is usually quite low.

We have seen much enthusiasm towards contact marketing as a concept but the reality often is that corporate and capability marketing (which are by their nature more passive) are relied upon to generate and keep clients.

The three levels

There are a wide range of marketing activities and tools available to law firms.  We believe, however, that with each level of marketing each activity profiles different aspects of the firm and will therefore achieve different things. 

Marketing ROI

Typically in law firms, tremendous time and financial resources are devoted to corporate and capability marketing whilst very little is spent on contact marketing.  In contrast, when you look at how hard the three levels are to measure, contact marketing (because of its direct and active nature) is the easiest.  This is one of the reasons why firms have difficulty measuring their marketing expenditure.  They devote significant resources to what are the most difficult areas to measure.  In turn they also expect results, which only contact marketing can deliver.

Corporate and capability marketing do have a strong role to play in building awareness in the client’s mind.  However, without contact marketing the client / prospective client is unlikely to buy from that firm.  Whilst we are not suggesting that firms halt expenditure on corporate marketing, we do recommend that the marketing budget is re-examined against the new understanding of the firm’s clients and prospects.  Over time a greater proportion of the budget can then be devoted to contact marketing.  It will also enable measurement systems to be adjusted (or in some cases introduced) to reflect this change.  We do believe that only then will firms see the direct correlation between what they spend on marketing, the new business they win and a reduction in the clients they lose to competitors.

Great business

Marketers and their law firms have a tremendous opportunity to meet Peter Fisk’s challenge.  By linking marketing to business development strategy they will not only demonstrate a return on marketing investment, but marketing campaigns will be more focused and innovative.  Law firms will truly achieve ‘great marketing’ and win great business.

 

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