A bird in the hand is worth two in the bush. At no time in advertising or law firm marketing has the above proverb been more true than it is today. Consumers – your potential clients – are subjected to a barrage of advertising for law firms thrown at them from social media, print media and even television and radio.
It can be very expensive to be the stand out firm with all this competition to a potential client who has no knowledge of your firm as a firm, or yourself as a practitioner.
The bird in the hand in law firm marketing
It is no marketing secret that law firms need clients and a steady income stream to stay afloat financially, and the more clients the better. With all the advertising that is available in print and digital format, even on radio and television, it is easy to fall into the bottomless money pit of chasing new client after new client, without nurturing the clients that you already have.
According to Douglas Karr of ‘Customers That Stick’, the cost of acquiring one new client is up to 10 times the cost of retaining an existing client. In fact, the probability of a retained client opening a new file is a whopping 60-70%, while the probability of opening a file for any new potential client who has come across some of your advertising is, according to Invesp Consulting, only 5-20%.
Getting to the point of opening a file for a new client also means a lot more work for you.
According to Karr, it costs 16 times more to bring a new client up to the same level of profitability as a current client, who would cost 16 times less to be retained.
Money that is then spent on advertising and beating out the competition – whether it be a cut-price service or a bigger, more established firm with name recognition – getting to know the client, gaining their trust and finally forming a relationship can cost several hours of your time and billable hours that you may not be able to charge for.
Why not spend that time with a client who has already knows you but just needs to know they are remembered.
In your efforts to retain your client, and ensure that his or her new files are opened with your firm and not with your competitors, you must then look at the best ways to retain your client base. Karr says that just a 5% increase in client retention rates can produce up to a 95% increase in profit.
In this very competitive market communication with clients is essential and the content you produce and the way you distribute it has to be done in a professional manner. It is imperative to attract the attention of your retained ‘birds’ with content that is both interesting and factual – that looks professional and instils a feeling of confidence in your firm and your people.
Confidence in your brand will ensure that when your client does hit a legal snag, or encounters a life changing event that calls for an adjustment to their documents filed in your secure storage or a problem their friend might have, when they are looking for legal help your firm is the first name that springs to mind, rather than another firm who may have caught their attention in passing.
The chirping bird
There is no reason why customer care and retention should not lead to new clients and new opened files. Happy, satisfied clients will tell others about the great service and positive results that they achieved, and gather more birds together into the profitable bush.
It is much more profitable for you to have comfortable, content and loyal clients who tell their friends and family about the fantastic service and results that they received, than it is to have a bunch of marketed social media ‘likes’, each of which is costing your firm money.
In addition, according to Invesp Consulting, existing clients are much more comfortable to spend money with a firm they already know, and will spend 31% more than new clients.
The valuable bird’s nest
The cost of acquiring a new client can be up to 10 times the cost of retaining a client for whom you have already performed a service in the past.
It makes both business sense and common sense to put time, money and energy into maintaining and strengthening relationships with the clients that you already have in your database.
A firm can throw dollar after dollar into expensive advertising campaigns to reach the maximum amount of potential clients, get ‘likes’ and interaction on line – but the easiest conversion is the one that your firm has already made. You can still do other things but it pays to nurture them too!
About the author
Brian has more than twenty years’ experience in marketing and management across diverse industries including legal, real estate, tourism and technology. Brian lives in Sydney with his wife and two daughters.