How to improve client retention at law firms
The new Alternative Business Structure (ABS) could herald major changes to the way that law firms conduct themselves. So called “Tesco Law” has the potential to attract clients away with aggressive retail marketing techniques. How can local independents survive in the new marketplace for legal services? How can you retain clients when they are being targeted by new competitors?
For some time now legal forums have been abuzz with comment and speculation on the public’s response to the liberalisation of the legal services market in the UK. Whilst some comments have done more to confirm the author’s beliefs than in inform debate, there are some real concerns. Frequently contributors point to opportunistic approaches, or advertising bombardment, as tools deployed to poach clients. Whilst these tactics would normally be seen as legitimate, the predatory nature and scale of some of the newer entrants to the market are cause for concern.
What hope is there?
The first thing to recognise is that what got you where you are today – will not be enough to keep you there. So if your business has grown over the years on the strength of client referrals and the odd call from a Yellow Pages advert, it is time to make changes. In later blogs I will discuss techniques to improve client acquisition in a competitive market, but this blog focuses on client retention.
All clients are not created equal
Whilst there may be equality in the eye of the law, there should be none in the eye of the business development person. Treating clients equally is a sure way to waste a marketing budget. A better approach is to understand who your ideal client is. Based on this understanding, you can develop marketing programs to assist in client retention. Bear in mind that clients have a lifetime value. Your ideal client profile should recognise this and highlight future potential as well as current needs.
More clients for your products – or more products for your clients?
If you have key sector specialisations then it may be attractive to go out and look for new clients who could utilise that experience and knowledge. However this can lead to significant up front costs associated with acquiring clients. By analysing your existing client base it may be possible to identify unfilled needs. These needs should inform your future growth plans, possible leading to a merger or acquisition with a complementary organisation. The benefit of this approach is that you are developing an ongoing conversation with your clients. This reduces the likelihood of defection or attrition.
Think like the big guys
Many of the retail giants that are entering the market through the ABS already have experience of customer loyalty programs. Whilst a “loyalty card” may not be practical for all clients, some larger firms are already using them to encourage increased spend.
Much of the value in a store loyalty card is the data they provide on the purchasing profile of the holder. The data you already hold in existing time and matter recording systems provide the insight you need into your clients needs. Bringing together data from all of your systems is an essential first step to understanding your clients. It is only through this understanding that you can develop client retention programs.
Think like a client
One inevitable effect of the massive increase in marketing spend will be an increased client interest in legal services. Within the affluent “Generation Y” target demographic this will lead to increased web searches for key terms, as cynicism looks to challenge those advertising claims. This represents a major opportunity for smarter marketing spend. By harnessing the power of Inbound Marketing you can use these searches to improve your client retention rates. Turn scepticism of big brand marketing into trust and recognition of your brand and services.
All of these steps are designed to support independent law firms to meet the challenges of ABS, and to win. This is not an exclusive list, nor do I promise instant results. When these tactics are used within a broader business strategy, I believe they will improve client retention. In a future blog I will discuss building on that base to drive client acquisition. If you would like to contribute to that blog please contact me at paul.pitman@collierpickard.co.uk
Paul Pitman is a Solutions Architect at Collier Pickard.
