Understand what your ideal clients value
This week is all about how to understand what your ideal clients value about your firm: what they really, really want from you. There are two main reasons for wanting to know this: first, to make sure that you continue to deliver exactly what your core clients love about working with you and second, to be able to articulate to potential new ideal clients what it is about your firm that they are going to love!
Surely all clients want the same thing?
Not at all.
Let's look at sending a letter. How much are you prepared to pay for it and what are the most important element of the service? If you want to send your mother a birthday card, you probably want it to arrive on time, unopened. The cost? First class - 62p. But if you have a letter that absolutely must arrive tomorrow morning before 9.30, that you can track it and make sure that someone signs for it - well, that's £6.40.
Here the client is paying extra for the additional service and the peace of mind that goes with it. The same client might very well usually pay 62p to send their letters. The trick is to know if your 62p client is one who will sometimes really value the ability to pay £6.40 for the same thing - getting his letter from A to B! - or is always going to be a 62p client.
But let's face it, even here, the client is only ever going to pay a 1000% mark up if they are convinced of 4 important things:
How can you tell what clients value?
Ah! Good question.
Value is entirely subjective - only your client can tell you if they think your service delivers good value or not. You can tell them what it costs and how wonderful the benefits of it are: but he's never going to pay £6.40 to send a card to his mother, no matter how much you stress the benefits of her being able to sign for it before 9.30am!
There are 5 things you need to know about value from the client's perspective:
1. There are good things and bad things ("benefits and detractors" in jargon) that will happen while you work with this client, some of which you can control. Some not. Understanding which elements of your service are critical will help you to protect the benefits where possible.
2. Value changes over time, so that features he was initially impressed with are now just service standard - especially if competitors bring out better offers. We see this in the mobile phone industry all the time.
3. Value has nothing to do with the cost of providing the service. This works both ways: popcorn literally costs pence to make but cinema goers will pay £££ for it. Equally, as Peter Drucker puts something is not quality just because it is hard to make and costs a lot of money "This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else"
4. Value points may not be consistent across all services even for one client. What your SME business client wants from your litigation team is different from what he wants from the property lawyer pulling the deals together.
5. What they value about your service is affected by their experiences elsewhere in the world: other legal providers as well as non - legal services they have experienced (e.g. the ease of being able to look something up on Google means that many clients are more informed than they were).
All this means that law firms in 2015 are locked in a constant drive to improve what you are offering balanced with a need to build profitability. The two are not mutually exclusive (as we shall explain next week and in week 4 of this programme) and can work together very well.
Yes, but that doesn't really answer the question. What do clients value and how do you know?
You can do two things: find out ("client research") and make educated guesses based on types of clients ("segmentation"). Client research means gathering as much information as you can from the client themselves, preferably face-to-face or over the telephone. When I was in-house I believed the client research part of my budget was by far the best spent in terms of return on investment and I still think the same today - only these days I am the one visiting law firm clients and asking the questions.
Segmentation means dividing your client base into types of clients: here's a link to some slides I created for Legalex on this topic last year. Since then we have also adopted a pioneering software tool that allows us to show private client law firms not just who their consumer clients are but also what car they drive, what papers they read and to predict with a great deal of accuracy how they will buy services.
Whichever approach you use, understanding what your client values about your service is critical to protecting your future growth.
We have three pieces of exciting news to share with you:
We launch our Retail Strategy for law firms at Legalex on 13th and 14th May at ExCel, London.
Do come and find us on the Conscious Solutions stand: together with other top professionals of the legal world we will be sharing our expertise and networking with like-minded business people. I will be speaking on both days in the Conscious Solutions theatre.
By attending this event, you can be part of discussions that shape the future of the industry, be involved in seminars that can help you make practical changes to your operations and gain valuable insights into all areas of legal business.
If you haven't your ticket already, then don't miss the chance to claim your FREE ticket today!Rob Heaton has joined us as Head of Business Transformation
Rob is passionate about helping clients achieve operational excellence. He loves the excitement of seeing business transformation happen and is happiest when rolling his sleeves up and working on the ground to get the best results. Previously at Eversheds and New Law, we are delighted that Rob has chosen Richmonte Wells.
To find out more about Rob and how he can help transform your processes so that consistent delivery is the norm for your firm, click here.
Rob will be writing the next newsletter which covers how to make the changes necessary to deliver what your ideal clients want efficiently and profitably.
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