|Centurion Consulting Group||
|Market and Communicate to Grow Your Firm|
ďTharís gold in them thar hills.Ē Like the miner panning for gold, you can increase revenues and profits by finding nuggets of data, which has been captured in your software programs. This critical information can provide a blueprint for creating a plan for future business development that will increase your revenues and your profits. Yet, few law firms take advantage of their existing data by analyzing it and then using it strategically.
Data, such as the client referral source industry or marketing activity that generated the client, the client industry and client matter linked to the clientsí revenues can be the foundation for future marketing efforts.
Case in point: an attorney determines that 40 percent of his or her revenue is generated from referrals who are bankers. This attorney should market to bankers by focusing on writing for banking publications, speaking at banking organizations and networking with bankers. Through data mining, the attorney analyzes the clientsí industries and sees that 25 percent of the revenue is generated by video game companies. The attorney, who is familiar with the nuances of this industry, should find it easier to attract clients in that industry as opposed to one in which he or she knows very little. Itís more efficient to market by industry segment than it is to conduct general marketing to all industries.
Not only should annual data be analyzed, but data should be compared from year to year to determine trends. A growth in a particular industry could signal a unique opportunities that, otherwise, may not have been recognized. For example, one year of revenues generated in a particular industry yielded a 25 percent growth from the previous year. The next year the growth was 50 percent and the following year it was even more. The firm saw an opportunity that they wouldnít have recognized if they werenít mining data. They decided to focus on that work and enjoy a thriving and profitable practice in that industry.
Most law firms have a substantial amount of data that can provide attorneys with historical information, which is crucial in making decisions about the future. The data can help in developing strategic plans, business plans, projections and budgets. However, one of the best ways to use the data is in marketing plans.
Data, which can be the cornerstone of a marketing plan, can be sorted in the following ways:
Clients in descending order of revenue
Calculate the percentage revenue for each client and make sure that no one client generates more than 10 percent of revenues. One client that generates more than 10 percent can be dangerous if the client decides to bring the work in-house or leaves the attorney for some other reason.
Referral sources in descending order of revenue
Identify the referral sources that refer the largest percentage of revenue, so they can be cultivated further.
Client industry in descending order of revenue
Clients segmented by industry can indicate areas of focus, around which the attorney can build an industry practice.
Referral source industry in descending order of revenue
This data highlights the industry where top referral sources are located. If past clients are generated from other attorney referrals, for example, then target attorneys for future marketing.
Type of work (matter) in descending order of revenue
This data indicates what type of work was performed. Attorneys can develop an expertise in a specific area of work based on their past experience. For example, one attorney discovered that the majority of his work was shifting to a new area. He realized that there were more cases in that area and decided to aggressively market the area through articles and speeches.
The data can be analyzed by using revenue figures or the number of clients. In most cases, the results are similar. There are some instances where one client may generate the largest industry revenue; however, attorneys shouldnít develop a strategy based on only one client. In this case, the number of clients should be used for the analysis.
Sometimes marketing events generate clients instead of referral sources. For example, attorneys may get clients from articles or speeches. These events should be tracked as well, so that the attorney can determine if they are worth replicating. One attorney gets clients from a state bar association speech and so she continues to give the speech each year.
Once the data for 2003 is sorted, it is compared to data from 2002, 2001 and previous years to identify trends. While historical data doesnít always indicate future paths, itís one of the best ways to determine whatís worked and whatís not working. The information can be analyzed quarterly or semiannually, as well as annually.
Decisions about future marketing canít solely be made as a result of internal data analysis, but are tempered by external forces as well. For example, a change in the law may open new areas of practice or signal a decline in a specific area, which may prompt attorneys to examine other complementary areas upon which they can focus.
For example, a relatively young law firm with a thriving real estate practice considered the regional economic forecast, which predicted that the economy was headed for a downturn the following year. Hard pressed to believe the forecast since business was booming, the attorneys studied the leading indicators, which formed the basis of the prediction. In an effort to insulate themselves against the forecasted business climate, which could spell disaster for the firm, the attorneys began retooling themselves for workout projects. The downturn came and the law firm, unlike many of their competitors, sailed through the recession.
Most contact management, billing and accounting software programs can be customized to capture information crucial to data mining. Once the data is gathered, it may be sorted by the software, if the capability exists, or it can be exported to spreadsheet software, such as Microsoft Excel. Using an imbedded Excel program, the data can be automatically exported to a spreadsheet.
Easy to use, Excel facilitates the analysis through filters, sorts, graphs and charts. At the completion of the analysis, most attorneys are surprised by the results: they didnít know that a specific industry comprised the largest segment of clients or that the client industry was experiencing such dramatic growth; they had no idea that so much of their work involved a specific type of matter; they didnít recognize that such a high percentage of clients came from a specific marketing event; or they were shocked to learn that the investment they made each year in a marketing activity didnít generate one client. Oftentimes, data mining is an eye-opening, jaw-dropper.
Attorneys only have a discrete amount of time to market, so allocating resources appropriately is important. Tracking and analyzing data can provide easy answers to the interrogatories: who, what, where and how to market in the future, which can increase revenues. And since the marketing efforts are focused, based on data analysis, profits should increase as well. Like the miner panning for gold, attorneys can boost revenues and profits through mining of their data.
|General Information Email: Centurion@CenturionConsultingLaw.com
Telephone: (818) 784-9888 Fax (818) 788-9825