EMPLOYING BUSINESS ANALYTICS TO ACHIEVE BETTER SALES RESULTS FOR YOUR LEGAL FIRM

Transcription

1 EMPLOYING BUSINESS ANALYTICS TO ACHIEVE BETTER SALES RESULTS FOR YOUR LEGAL FIRM David Ricketts and Carrie Morgan 2015 C24 Ltd INTRODUCTION Business generation and customer acquisition is changing within the legal sector as newer providers enter the market, offering services at much lower rates. Even supermarkets are now starting to deliver transactional legal services, putting pressure on firms to transition their businesses into being well-oiled commercial operations; complete with marketing and sales functions. This is drastically different to the traditional customer acquisition process generally employed by legal firms where business generation relied on repeat orders built on long-term relationships with clients. Fast forward to 2015 and legal firms are today putting sales and business development at the centre of day to day operations with many partners focused purely on generating new business for their fee earners. And information sits at the centre of this change providing opportunity in a challenged market. A Dun & Bradstreet (2013) report cited better management information being key to helping spot trends for business generation. Recent research conducted by C24 found that 87% of legal firms were mainly motivated to investigate business intelligence solutions so that they could achieve better visibility of sales and business development information. Reasons for achieving better sales visibility ranged from aiding with general business growth, better client retention and sales success probability planning; showing that business development is high on the agenda for many legal firms and analytics plays an important role in achieving sales success. WHY IS THE LEGAL MARKET IN THIS POSITION? Many legal firms have found themselves in a highly competitive market as newer entrants enter the sector offering volume, transactional services at lower costs. This is difficult for traditional legal firms to respond to overnight as it requires a complete overhaul of systems, processes and job roles to compete effectively. A report from RBS (2014) on the legal market showed that in recent years, high street firms have seen traditional sources of income from services such as legal-aid funded clients and conveyancing reduce by over 50 per cent. The

2 report also outlined worrying results: that nearly 31% of law firms are at risk of financial failure in the coming year due to pressure created by competition from new volume market entrants. Alternative business structure (ABS) law firms such as Direct Line who are predominantly an insurance firm and KPMG from an accountancy background are able to offer lower cost legal services by relying on larger teams of support staff to complete the majority of work compared with staffing structures in a traditional legal firm where highcost fee earners take on the majority of a client s work. This calls for restructuring across a legal business processes but also its infrastructure; from the law firms interviewed by C24 the vast majority cited an inability to pursue better analytics for business generation due to legacy infrastructure and a complex mix of multiple applications and reporting systems that made it difficult to collate information together. THE CONSUMER MARKET SALES ANALYTICS IN A VOLUME-FOCUSED BUSINESS Legal firms are approaching customer acquisition in different ways and one of the methods gaining popularity is social media. Attorney at Work (2015) conducted a survey across legal firms and found that of the 91% of lawyers that use social media, 60% identified social media as playing a part in their marketing strategy. 39% perceived LinkedIn as the most effective customer acquisition tool in terms of social media, but when considering ROI of social media marketing, only 4% rated social media as being very responsible for acquiring new clients. Whilst social media alone may not be a method for client acquisition, what is clear is that many firms are relying on it to collect information about their customers or to promote their own businesses to prospects. The next step is to make this information useful and valuable so that it can form part of the customer acquisition strategy and help with making decisions and devising plans for business generation. Being able to effectively collate this information and make it relevant and integrated into day to day business operations is a challenge for many firms whose systems are not yet integrated or where business intelligence tools are not yet able to unify external information with the internally collected data. Analytics deployed across a legal firm can help with providing sales teams with a more accurate view of customers and an awareness of their clients buying behaviour. Using analytics to collect information about how your customers engage with your firm (this could be any interaction point such as website, phone calls, meetings, social media), how often they engage, the types of services they typically purchase and the client s demographics enables

3 the forward-thinking legal organisation to turn this incoming information around and transform it into outward facing marketing for better business generation. For example, a firm may notice that, over time, younger customers tend to first engage on social media, then through the firm s website and finally download a service overview PDF before they take the decision whether to call the firm and speak to a partner directly. This information would normally exist within a firm, but may not be collected together to create a customer lifecycle, from which marketers can develop a plan on how to engage those clients. The plan may be that as soon as someone follows them on social media, a message is sent to them asking if they would like to connect further via a phone call to discuss their legal services in more detail. Without analytics, a firm would not be able to measure whether this would be an effective approach or a relevant activity for their customer base. With analytics, organisations can see whether, over time, the proposal of a call early on in the prospect s engagement results in better success rates and more client calls. Outside of general marketing and business generation activities, there is much more pressure on consumer-focused firms to be more agile and cost-effective in their service delivery to compete with ABS firms who are capitalising on their size and scale to deliver low-cost services. This means it is more important than ever for traditional firms to understand their customers and have a clear awareness of what their clients want and how much they expect to pay for that service so that the firm can align their business to suit. Once the customer has been acquired by a firm, it is critical that organisations are able to retain clients through the effective management of a volume customer base. Managing an existing client base of tens of thousands of clients is very different to managing hundreds of corporate clients so analytics can play a crucial role in helping with client retention by tracking customer behaviour and enabling sales teams to take action before losing a client. The legal sector can look to certain universities for their innovative way of tracking student behaviour to take action based on behavioural triggers (such as absence from a certain number of lectures, social media negative commentary etc.) to engage with students to aid with study concerns or discourage students from dropping out of their university programmes. Analytics can support the law firm in spotting these trends to enable action moving analytics away from being purely a reporting and information-providing service to a solution

4 that promotes and directs immediate action. This ensures that analytics demonstrates a tangible ROI and provides a next step rather than just being a collection of data. THE CORPORATE CLIENT AND ENTERPRISE ACCOUNT MANAGEMENT Social media within the corporate legal world is also employed for firms looking to win larger, enterprise clients over typically longer sales cycles. A recent report from the RAIN Group (n.d.) highlighted the RAIN Group Strategic Account Management Process which separated the enterprise sales process into a number of key stages. In the Research Stage, data was highlighted as being key for pulling together information to create a big picture outlook for clients, and for gathering together client data to inform sales strategy. At the Strategy Stage, data was crucial for establishing success metrics and criteria whilst at the final Review Stage tracked data was central to analysing success metrics and KPIs. Within a legal firm specifically, analytics can provide useful information to help manage larger clients for increased customer satisfaction and better client retention levels. Analytics can be employed to determine whether the customer is receiving regular contact from your firm s sales teams or to help predict outcomes to customer cases to provide more calculated judgements on case successes. Social media sentiment analysis from business intelligence tools or social selling software can be used to track clients sentiment towards your firm and to guide on what action to take if a customer is in a particular business scenario that your firm could assist with. Using analytics to spot trends within your own customer base is key for instance, tracking your customer s news and social media feeds to get real-time information on potential mergers or acquisitions is a way of staying up to date and quickly sifting through information to quickly find the most relevant data. Firms can also use social media analytics to track industry trends and issues of particular importance which may inform their thought leadership strategies helping their marketing activities to have more impact with prospects. For wider client retention, analytics can assist by providing an up-to-date and easy-to-access source of individualised client information whose sole purpose is to keep the client informed on performance against set KPIs, billing information, contract changes and fee data.

5 THE WIDER SALES PROCESS WITHIN LEGAL FIRMS When looking at the wider sales process within a law firm, many organisations are now starting to deploy Customer Relationship Management (CRM) systems across their businesses, however many are still relying on spread-sheets to collect client data. CRM systems can help to drive sales behaviour; pushing partners to collect data that may not appear relevant but becomes more important in a win/loss analysis, for instance. Many firms collect information about their clients, but it is siloed between different applications, between digital and paper formats and within individuals own computer and storage systems making it difficult to bring this data together for organisation-wide visibility. The first step for any firm looking to make use of analytics in their business generation activities is to look at ways to pull data from different tools, spread-sheets, applications and formats into one place where they can be reviewed and processed holistically. Certain business intelligence tools can do this without needing to replace legacy infrastructure. Once this data is in one place, or contained centrally within a CRM system, firms must then look at new ways they can extract information to make judgements. CRM analytics is an important starting point for creating a sales strategy by evaluating typical customers and understanding how you usually win client projects based on their demographics and typical engagement strategy. Here are a few report ideas where legal firms could use analytics in their business development activities: Sales strategy creation Analysing your customers and potential opportunity scenarios. Marketing campaigns Evaluating what issues are creating the biggest headaches for clients or why clients usually engage with you and then creating marketing campaigns around those challenges. Target customers Creating target client lists to pursue - based on prospects collected, leads, previous wins and activity.

6 Win/loss analysis Reviewing what worked well and what didn t work well across sales approaches. Efficacy of engagement types How many clients engaged with you via different marketing and sales channels (cold calling, meetings, events, and social media). Client retention Trends that led up to losing existing clients. Customer-spend Understand how often a customer spends and when your teams should be re-engaging with an existing customer based on historical spend reports. Social media and web traffic Indications of when a new prospect is showing interest or engaging with your brand and next steps to bring them into your sales engagement process. Predictive analytics Determine the chances of recovering fees from clients based on locations, demographics, previous activity or type of service contracted. These reports can also be combined together, to unify both internal data that you collect about your prospects and customers with external information such as social media sentiment and wider industry changes. The report previously cited from RBS (2014) highlights how a large number of firms have captured market share despite the increased competition in the industry by developing a more focused and considered approach to client management and relationship management. If you have just a handful of clients then you can easily track their information, trends and buying signals however if you are looking after hundreds or thousands of clients, spread across different Account Managers or partners, then how do you ensure that you deliver a consistent client experience and have KPIs in place to create better client retention levels? Analytics enables a consistent approach to customer management within your organisation by collecting data which enables firms to create rules which sales teams must adhere to in order to increase the chances of winning new business or securing existing clients. An example rule might be that a client should be contacted at least once a month even if the firm is not actively working on a case as this has shown to be a reason why clients move away from the firm after little contact experienced in between services.

7 CONCLUSION Whilst the sector may be changing, clients still expect the same high levels of quality and interaction from their legal partners, yet the way in which this interaction and quality is delivered is transforming. Many legal practices are now delivering services and information online, providing updates through web portals or as they attempt to cut down on costs and become more agile in a volume-focused industry. This move to providing more transactional services creates a headache for business development leaders who now need to manage many more customers and services than they may have previously done rather than working closely with a few, key clients. Analytics is crucial to making sense of this new world and taking the vast amount of information collected about clients and services and using it to inform strategy, advise on activity and review performance in order to make business improvements. Without effective use of analytics, firms risk being uninformed about their clients as their businesses become even more volume in nature and the modes of interaction change to being web-focused and social media driven. Using analytics as actionable intelligence rather than just a vault of collated information allows firms to make calculated and reasoned judgements every time, with the data ready and available to back these decisions up. ABOUT C24 LTD C24 Ltd is one of the UK s leading privately owned specialist managed service and hosting providers, based in the Midlands, UK. Working with businesses all over the globe, the company manages, secures and delivers critical business applications to over 100 countries, with a particular focus on the legal sector. As a strategic Thomson Reuters partner, we deliver enterprise hosting platforms for Thomson Reuters Elite clients who are looking for more flexible solutions for their core practice management platforms.

8 References: Dun & Bradstreet. (2013) Industry Analysis: Strategic Information [Online] Paul Westcott. Available from: [Accessed 11th March 2015] RBS. (2014) A perspective on the legal market [Online]. Available from [Accessed 11th March 2015] Attorney at Work (2015) Lawyers on Social Media: 2015 Survey Results [Online] Available from: [Accessed 11th March 2015] RAIN Group (n.d.) 5 Keys to Maximising Sales with Existing Accounts [Online] Available from: [Accessed 11th March 2015]