Ten Ways Client Loyalty Improves Your Bottom Line
A successful marketing program of any kind hinges first on properly
identifying client needs, and then helping clients appreciate the
firm’s ability to provide the best solutions for meeting those
needs. Consider that clients are satisfied only when value
– as defined by the client - meets or exceeds expectations.
So, how do you create and deliver value to the client? Through asking
clients about them, by implementing a client satisfaction
program. The investment of time, money, and political capital that
it takes to launch such a program is miniscule when compared to
the new revenue the program can yield. What are these revenue enhancement
opportunities?
Research shows that a successful client satisfaction program can
result in the following:
- Improved Profitability: Loyal clients or highly
satisfied clients typically pay their bills on time, are less
apt to haggle over fees, and are less inclined to ask for discounts.
Firms that enjoy high levels of client satisfaction and loyalty
can charge as much as ten to fifteen percent more for their services.
- Reduced Marketing Costs: It costs five to
eight times more to generate revenue from a new client than to
generate the same amount of new revenue from an existing client.
Knowing what your clients think makes it possible to grow the
business intelligently and appropriately.
- Increased Market Share: Loyal clients tell
an average of five to seven other individuals about their positive
experience with a firm, resulting in the best and cheapest form
of advertising – referrals. (Most unhappy clients, however,
do not tell you they are unhappy, they just tell a lot of other
people.)
- Application of the 80/20 Rule: Eighty percent
or more of your firm’s business and revenues comes from
a limited number of existing key clients. Talking with
them about how you are doing and what is important presents a
unique reward/risk reality.
- Creation of “Deep Water” Relationships:
Research confirms that most clients do business with a firm because
of a relationship with one key partner. This does not bode well
for firms since they are rendered vulnerable if that individual
leaves the firm or the principal client contact leaves the company.
“Shallow water” relationships are one-dimensional
and easy to exit. When the client relationship involves several
professionals/practice areas, it is not that easy or convenient
to walk away.
- Measurement of Marketing’s Return on Investment
(ROI): Most traditional law firm marketing efforts do
not provide immediate or even measurable cause/effect results,
in many instances. Getting clients is usually a cumulative process
that can take several years of effort to bring to fruition. Feedback
from clients about what they value, need, or desire from the firm
becomes valuable market research for allocating limited marketing
resources and insuring desired results.
- Gaining a Competitive Edge: A critical by-product
of interviewing your clients is the “straight from the source”
competitive intelligence you often get. Most clients do not mind
talking about the various law firms they use, or sharing their
perceptions of other firms’ strengths and weakness. Most
firms would pay a lot for such invaluable proprietary research—you
can have it just by asking.
- Becoming a “Client Satisfaction” Leader:
Demonstrating the firm’s desire to “super please”
clients can become a distinctive, competitive advantage as word
of the effort percolates through the marketplace. Also, the firm’s
client satisfaction program clearly communicates to all lawyers
and staff that it is serious about achieving service excellence.
- Leveraging of Client/Industry Information:
When a client tells you about potential changes in the company,
industry, or economic/political/social environment, it is highly
likely that such changes will also affect other clients and prospects
in that industry. This insight not only can and should drive efforts
to address existing client needs, but also fuel new business development
opportunities with prospects in the industry.
- Prevention of Client Defections: Many clients
have quietly left firms for reasons as basic as “poor chemistry”
(though “poor service” still ranks as the leading
cause of defections). Whatever the reason might be for a client
to consider changing firms, you get a chance to address it if
you actually talk to them. Also, as client companies merge, acquire,
get acquired, reengineer, or downsize, new decision makers emerge.
Without the benefits of client interviews, it can be difficult
to know whether you might survive as counsel, and how you might
need to “tweak” or even change the client team to
maintain your position.
Find out more about the book The
Lawyer’s Guide to Marketing Your Practice, Second Edition
Find out more about the chapter The
Client Feedback Program, which is available for purchase separately. |
|
