Take inventory of your marketing to save time, save money, and improve results

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Taking inventory of your marketing can help you gain clarity about where you are and make it easier to get to where you want to go.

Here’s how to do it:

Pick a period of time in the past. Six or 12 months will do. Write down how many new clients you took in during that period, who they are, and the amount of income those clients have or will generate for you.

So far, so good.

Next, look at the names of each of those new clients and write down where they came from. You need to know whether they were referrals (including self-referrals, aka repeat clients), or they came from some other source.

You can break this down any way that makes sense for your practice, but I suggest something like the following:

  1. Referrals from clients (including self-referrals)
  2. Referrals from professionals, others; networking
  3. Online (Blogging, SEO, social media, webinars, articles, etc.)
  4. Paid advertising (PPC, direct mail, display, radio, directory, ezine, banners, self-hosted seminars, etc.; if you do a lot of adverting, you should break this up into different categories)
  5. Other (Public speaking, publicity, writing (i.e., trade pubs), etc.)

Okay, now you know where the business is coming from. What now?

Here are my thoughts on how you can use this information:

  • Most of your clients should come from referrals. If they don’t, ask yourself why and what you can do about it
  • If you’re not getting business from some of your marketing activities, or they are too expensive relative to the business they bring you, consider eliminating those activities.  For example, if blogging and social media take up a lot of your time but you’re not getting the clients from it, why do it? Use that time for something that is producing.
  • There will be some cross-over or ambiguities. For example, blogging may not be producing a lot of traffic, inquiries, and new clients for you but it still has value as authoritative content you can show to prospects who come to you via referrals, or to add value for your clients.
  • If something is working for you, do more of it. You can find more time for networking, for example, by reducing or eliminating some or all of the time you spend on (whatever is not working). If advertising in trade publications regularly brings in new clients, increase your media buys in trade publications.
  • Before you cut anything, consider the “back end”. For example, you may be breaking even on advertising (or even losing money) but if you are able to get referrals from the new clients that are produced by that advertising, you’re still earning a profit.
  • If you aren’t in the habit of recording where your clients come from, you need to start. Instruct whoever answers the phone to ask everyone, “Where did you hear about us?” and add a line to your new client intake form.
  • Track these numbers going forward so that you can periodically take inventory and see where you are.

A friend of mine says, “You have to inspect what you expect”. He also says, “You have to slow down to speed up.” Take his advice. Once or twice a year, shut off the phones and email and take inventory. It will help you save time, save money, and improve your results.

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Why you should consider increasing your legal fees

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Times are tough. Clients are having trouble paying their attorneys. And that’s exactly why you should consider increasing your fees.

When times are tough for your clients, you also feel the pinch. But your overhead keeps increasing, doesn’t it? At some point, some of the services you offer will no longer be profitable. “We lose money on every client but we make it up in volume,” is an old joke. But some attorneys don’t understand, the joke is on them.

What would happen if you raised the price on those services? You may lose a percentage of your clients, but the increased revenue from your remaining clients would provide a profit on every “sale”. And if you lose more clients than you expect, you will have more time to do more (higher paying) work for other clients.

True, you may not have other clients to fill the gap right now, but you will have more free time for marketing so you can bring in new clients, something you may not have time to do right now.

And you may find that you don’t lose many clients when you increase fees. Prices for everything are going up these days, so to some extent, your clients expect you to follow suit.

When an airplane loses cabin pressure we’re told to put the oxygen mask on our mouth first. Once we’re out of trouble, we can help the people next to us. It’s the same thing in a law practice. If your practice is in trouble, you won’t be around long to help your clients with their troubles.

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Could you charge more for your legal services? Here’s how to find out

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Could you charge higher fees for your legal services than you charge right now?

What if you could get paid one-third more than you now get without losing any business. Wouldn’t that be cool? Or, maybe you might lose some business but increase your net income because of the higher fees you are paid from everyone else. Also cool.

Most attorneys set their fees by looking at what other attorneys in their market charge. They don’t want to charge a lot more or a lot less so they play it safe. But some attorneys do ask for more and they get it.

True, these higher paid attorneys may have more experience or a higher-profile reputation. They might offer more value to their clients. Perhaps they are better “sales people” or have more chutzpah. Maybe they took a chance when quoting fees and got lucky.

The point is that some attorneys get paid more than other attorneys for doing essentially the same work. What if you could, too?

There is a way to find out if you could charge more. No, not by asking your clients or prospects if they would be willing to pay more. They have a certain, um, bias, don’t you think? No, if you want to find out if people are willing to pay more you have to charge more, and see if they pay it.

But hold on. Don’t raise your fees across the board just yet. That’s too risky. You don’t know if this will be successful. What if you ask for too much and lose too many clients? Not good. Conversely, what if you don’t ask for enough? Your clients may pay ten percent more without flinching, but how do you know they wouldn’t have paid twenty percent more?

The answer is to test higher fees with small groups of clients and/or prospects and measure the results.

Pay-per-click advertising is a great way to do “split testing”. Basically, you quote one fee to the first inquiry and a higher fee to the second. You alternate quotes until you have a meaningful sample of responses and clients. With enough responses, you’ll be able to see which fee is producing (a) the most clients, and (b) the highest income.

Pay-per-click advertising has become extremely expensive and you might not want to use it as an ongoing marketing tool. But for short term testing purposes, wouldn’t it be worth it to find out conclusively that you could safely charge a lot more than you do now?

If your practice isn’t amenable to advertising, there are other ways to test fees with smaller groups of prospects. If you do seminars, for example, you could quote every other attendee a different fee. Or quote different fees at every other seminar.

The results of price testing are often surprising. You would think that charging higher fees would decrease the number of sales (clients) but that is not always the case. Sometimes you sell just as many at the higher price. And sometimes, believe it or not, you sell more at the higher price.

But you’ll never know unless you test.

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Seth Godin’s latest example of bad advice

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I often comment on other blogger’s posts. I take their ideas, add my two cents, and re-frame their generic information so it is appropriate for attorneys. I think writing teachers refer to this as, “compare and contrast.” It’s an easy way to create interesting, timely, and relevant content.

But while “comparing and contrasting” might make for an interesting post, there’s nothing better than writing a post where you completely disagree with someone, especially when that someone is a respected and well known expert. Such was the case with a recent post by marketing expert extraordinaire, Seth Godin, with which I completely disagreed.

Oops, Seth did it again.

Seth’s new post is about “sampling,” offering free samples to prospective customers to get them to try your product. In the food market, shoppers are offered a taste on a cracker, for example. If they like it, they buy the product.

Seth says it’s a bad idea. A waste of money.

Au contraire, mon frère

Sampling works. Yes, you wind up giving free samples “to people who have no intention to buy,” as Seth points out, but you sell far more than you give away.

Seth claims merchants look at sampling as a cost of doing business, like overhead. Not true. It’s an investment. Done right, it earns the merchant a big return on that investment.

Spend X dollars giving away free samples. Take in Y dollars in resulting product sales. The difference is profit.

You spend money to make money. It’s how business works.

And let’s not forget that once you try a new product and like it, you might then purchase that product every week for years to come.

Or, you might not buy the product being sampled but you might like the cracker it was served on and buy that. You might see something on the shelf you had not noticed before because you usually don’t stop in that part of the store and buy that. Or maybe it’s as simple as coming back to shop at that particular store because you like the free samples and the store down the street doesn’t offer them.

Look, the retail industry tracks everything: every product, every price point, every penny earned as a result of a sale or promotion.

If sampling didn’t work, trust me, they wouldn’t do it.

Well guess what? Sampling works for attorneys, too. When attorneys invest an hour in a free consultation, they usually get the client to sign up. (If you’re not, we need to talk). Those consultations don’t cost you, they pay you, by bringing you more clients, some of whom come back again and again and refer others.

Give prospects a sample of what you sell and they will buy more of what you sell.

Not only is there a mountain of empiracal evidence to support this, it’s also been documented by psychologists. It’s called “the law of reciprocity” which says that when you give something to someone, they are psychologically compelled to reciprocate.

The more you give away, the more you get in return.

For the record, there are other ways attorneys can offer samples besides a free consultation. You can give away the service itself, a free will for example, knowing that in doing so, you’ll sign up many of those clients for living trusts or other services.

Of course marketing is both art and science. You have to know what to give away, and to whom. You have to keep track of your results so you know what works best. You don’t want to give away more than you need to get the client, but you don’t want to give away less than you need and not get them at all.

Sampling isn’t something an attorney must do. But clearly, it works. If you don’t want to give away consultations or services, you can give away digital products–reports, ebooks, audios, and so on–to provide prospective clients with a sample of your knowledge and expertise. Seth thinks this is a good idea and does this himself to promote his products. Digital products are good to sample, he says, “. . .because more free samples cost you nothing.”

Oh, now I get it. Seth does know that sampling works. He’s just cheap.

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Marketing legal services like Starbucks or Amazon

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Whether expressly forbidden by ethical rules or just inappropriate for a professional practice, attorneys can’t do many of the things a retailer can do to bring in business.

Like have a sale or special promotion. Or an army of affiliates.

But don’t you sometimes wish you could?

Actually, there is a way. All you need to do is create a product you can sell to the people in your target market.

A book or audio course. A set of forms or checklists. A do-it-yourself kit.

Take your expertise and turn it into a product. Not only can it bring you more clients, it can become an additional source of income.

You have a body of knowledge that people are willing to pay for, don’t you? Your expertise is valuable. Take a portion of that knowledge and “product-ize” it.

It could be a $5 ebook or a $5,000 8-week seminar. It doesn’t matter. Anything you can offer to the market place will do. Promote that, not your services, and watch your traffic and leads grow.

Now before you say, “it won’t work for my practice,” (you were going to say that, weren’t you?) go to your closet, get out your thinking cap, and put it on your head.

What’s that? You don’t have a thinking cap? No problem. I can get you one wholesale. Just need to find my affiliate link. . .

If you have trouble creating something your prospective clients would buy, find something that’s already available and sell that. Someone else’s book perhaps (e.g., an expert in a related field, a consumer advocate), or even a product.

You could even sell t-shirts if you wanted to. The trick is to tie it to a cause. Find something you’re passionate about (literacy, rain forests, cure for cancer) and donate the proceeds to an appropriate charity. They get the money, you get the customer list.

Anyway, don’t be so quick to dismiss the idea. If you can make it work, it would open up all kinds of marketing possibilities.

Yes, check with your bar association to make sure. We know how fussy they can be. They may claim that because the purpose of selling your book or widget is to bring in clients, the same ethical restrictions apply. Argue it, if you can. Find a way around it.

And stay tuned. Next week, I’m having a sale on thinking caps. You’ll want to stock up.

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Why the average law firm doesn’t grow

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Over the last couple of posts I talked about legal fees. The average lawyer is paid average fees and they will continue to be paid average fees as long as they don’t do anything to distinguish themselves from other lawyers.

Similarly, the average law firm doesn’t grow. They have approximately the same number of clients today as they had six months ago. Six months from now that number will be approximately the same.

They may see spikes in new business, a rapid influx of new clients here and there, but in the growth department, most law firms aren’t seeing large and steady increases in clients or revenue.

But some firms do see that kind of growth. Every month they see more clients and higher revenue than the previous month. They aren’t churning, they are growing.

What do these lawyers do that average lawyers don’t do?

They provide exceptional service.

When you provide average service, nobody cares. “Yeah, my lawyer was okay–he did the job I paid him for. . .”. Yawn.

When you do more, when you provide clients with exceptional service that surprises and delights them, they’re going to talk about you. “Wow, if you’re looking for an attorney you should definitely call mine. She is absolutely amazing!”

Lawyers who are growing give people something to talk about. They provide exceptional service that makes clients feel that they got more than they paid for. These clients will not only recommend those attorneys, they will often go out of their way to do so.

They’ll talk about them to anyone who will listen. They’ll keep their eyes and ears open, looking for people who need them. They’ll recommend them, send traffic to their web site, and invite people to their next event.

The law of reciprocity says so.

When you give something to someone, there is a psychological compulsion to reciprocate. Give them what they paid for, it’s a fair exchange. Give them more than what they paid for or expected and they will return the favor.

If you want to charge higher fees than other lawyers, or you want to bring in more clients and see your firm grow, it all comes down to service. Average service, average fees and (lack of) growth. Exceptional service, higher fees and steady growth.

Fortunately, since the average attorney provides average service, it doesn’t take much to stand out. A little creativity and effort on your part and you’ll be the one people are talking about.

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Why the average lawyer earns average income (and why you don’t have to)

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In yesterday’s post I made the point that most clients don’t price shop, that price isn’t at the top of their list of hiring criteria. A lawyer posted on Facebook that he sees price shopping all the time, the result of the commoditization of legal services.

Who’s right? We both are.

If the services you sell are just like everyone else’s, you have a commodity and if a client can buy it from someone else for less, they often will. In the age of the Internet, it’s easy to find dozens of lawyers who offer the same services. If the attorneys advertise their fees, as many who offer commodities do, it’s even easier to compare prices. When all the client has to go on is price, price becomes important.

At the same time surveys consistently tell us that price is not the number one criteria among clients. It’s not irrelevant, they are just more concerned with issues of trust and quality.

So, we have a dichotomy. Clients say price isn’t the number one factor in choosing a lawyer and yet many clients do compare prices. How do you reconcile these two statements? More importantly, how do you avoid the price shoppers?

There are two ways. The first is to not offer what everyone else is offering so there can be no comparison. When every other attorney is offering apples, you offer oranges.

Package and promote your services so that they are different from what other lawyers offer. The average lawyer offers a commodity, you don’t. You offer something different and better.

If you handle consumer bankruptcy, for example, look for ways to add value and scope to your services and offer a comprehensive bundle of benefits that goes beyond the core services you now offer. This might include loan modification, tax lien negotiation, foreclosure defense, and credit repair. You might offer these additional services yourself or partner with other professionals who do. If not a complete service, at least offer information and advice so the client can get the solutions they need.

Don’t just treat the disease, cure the patient!

Put on your thinking cap and get your creative juices flowing. But don’t start with your services, start with your clients and the problem they want to solve. What caused the problem? What do they need to do to fix it? How can they avoid having this problem in the future? What other problems do they have? What problems have they had in the past or are likely to have in the future?

The answers to these questions will allow you to create a unique bundle of services that distinguish you from other lawyers and allow you to charge more than they do.

If you offer what everyone else does, as the average lawyer does, you will continue to see price shoppers, and in today’s economy especially, downward pressure on your fees. If you offer what nobody else does, or if you promote your services in ways that nobody else does, you will be (or appear to be) unique. You can sell your oranges for more than average attorneys sell their apples.

The second way to avoid price shoppers is by getting referrals. Referred clients come to you pre-sold. Somebody they trust already checked you out, took the risk of hiring you, and gave you a passing grade. If the referred client does go looking at what other lawyers are charging, they still won’t know if those lawyers are any good. And they know they will have to “answer” to the friend who refers them if they decide to go somewhere else.

If you combine the two strategies, packing your services in unique ways and getting most of your business from referrals, your income will be anything but average.

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How much should you charge for your legal services?

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Most lawyer’s fees are too low. They don’t want to scare off any clients so they quote a rate they think is in the ballpark of what other lawyers charge. As a result, they charge less than they could.

You’re not like other lawyers. You’re different. Better. You offer more and you can charge more. At least I hope you feel that way and can back it up (or are working to get there).

Charging what other lawyers charge isn’t a good strategy anyway because most clients don’t price shop. Price is not at the top of their list of criteria. Trust, responsiveness, availability, and added service are all far more important. And clients who are aware of what other lawyers charge will still hire you if you charge more, but only if you’re worth it. So be worth it.

Okay, so you’re worth more and you raise your fees. You may get some resistance. That’s to be expected. In fact, if you don’t get any resistance you’re probably still not charging enough.

If you owned an apartment building and had zero vacancies for an extended period of time, barring other problems, you would know that your rents are too low. If you raise the rents and your vacancies get too high, your profits will suffer. And so you adjust your rents until you find the right balance. There’s a sweet spot for apartment vacancy rates, probably in the 3-10% range depending on location and other market factors. Smart apartment owners continually adjust their rents to stay in that range and maximize their profits. You need to do something similar.

If you raise your fees and lose some clients that’s okay too, so long as you replace them with clients who are willing to pay the higher fees. The hard part is losing clients before the higher-paying clients show up. Be bold. Take a chance. Make room for some new, higher-paying clients. You’re worth it, remember?

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How to get a lot more clients without doing ANY additional marketing

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Most people who visit your web site, hear you speak, or read your article, don’t call you. And if they don’t call, they aren’t going to hire you.

What’s worse, they’ll never return to your web site or re-read your article. At least you have to assume that because that’s almost always the way it is.

Unless you have a lead capture mechanism in place (and you should), this is a squandered opportunity, a loss for both you and the prospective client.

The good news is that for everyone who does call, there may be three or five or ten people who almost called. They liked what they saw but for one reason or another, they didn’t take the plunge. If they aren’t ready or they don’t have any money, there’s not much you can do. There is one reason prospective clients come close to calling but don’t you can do something about. And if you do, it could bring in a boatload of new clients.

Many people don’t call lawyers simply because they’re intimidated. Let’s face it, attorneys are usually not known for being warm and fuzzy. But while a tough exterior may be a useful quality in an advocate, it can damage our ability to connect with prospective clients.

Fortunately, there is an easy solution.

Your web site or other marketing communication needs to reach out to the reader or visitor, invite them to connect, and make them feel comfortable about doing so.

One way to do that is to feature testimonials from your clients, who speak about how great it was to work with you, how you were kind and helpful and took a personal interest in their case. They can say how they felt scared before they called and thought they were going to get a sales pitch or be told they had to come into the office before they could get any information. Instead, you talked to them on the phone and answered a lot of their questions and there was no pressure at all.

Another way to make people feel comfortable about contacting you is to describe the process. Tell them what happens first, who they will speak to when they call, what will be discussed, what happens next, and so on, so that people can get a picture in their mind’s eye of what it will be like when they call.

Yet another way to reach out to people is to simply tell them directly that you will be happy to speak to them via phone or via email, that you will answer any questions they may have, with no cost or obligation.

No pressure. No intimidation. Call or email, the door is open.

There are other things you can do to make people feel comfortable about contacting you. Reduce or eliminate the “disclaimer” language so prevalent on lawyers’ web sites and emails. Photos of you and your staff are good. Use head shots and also some informal shots of you with clients or you outside the office. Personal information helps. Talk about your kids, sports you enjoy, or your volunteer work. On your web site, consider adding a video of you speaking and welcoming visitors, telling them what they will find on the site, and inviting them to contact you by phone or email.

Show people you are a regular person and you want to speak with them and more people will call.

Want more great marketing ideas? Check out The Quantum Leap Marketing System for Attorneys

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The problem with most consumer law practices

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Most consumer oriented law practices have a big problem. Lawyers who practice family law, bankruptcy, criminal defense, estate planning, personal injury, real estate, and other areas, have a preponderance of “one time” clients. Once the initial case or engagement is completed, the attorney gets no additional revenue, or at best, very little.

The problem is worsening. It costs more to bring in a new client today, and overhead and manpower expenses to service those clients are also higher. But clients aren’t willing to pay more, and they don’t have to. With more lawyers competing for the same clients, clients have more options.

I just spoke to an attorney who is spending $13,000 a month on yellow pages. The good news is that her ads bring in a lot of new clients. The bad news is that she loses money on every one.

The solution to this problem is for attorneys to develop their “back end”–services and other profitable initiatives they can offer their clients after the initial engagement.

In any business, most of the profits are made on the back end. There is a cost to acquire a new customer, and while it is hoped that this can be done at a profit, it’s not required. So long as the business can make enough profit after the initial sale, if the back end is big enough, most businesses are willing to lose money on the front end.

How can an attorney develop a back end?

Some attorneys are branching out into new practice areas. So the bankruptcy lawyer who sees a downturn in new clients starts offering family law or estate planning services. The problem with this is that it makes it much harder to get referrals from family law and estate planning attorneys with whom you are now competing. It’s also more difficult to market a general practice than a specialized one.

Instead of taking on new practice areas, here are two things an attorney can do to develop a back end:

  1. Expand and systematize referrals. Focus on getting more referrals, better referrals, and more frequent referrals from your clients. In this way, each client you bring in on the front end represents more profits on the back end. If you spend $1000 to bring in a new client who pays you $1000 on the front end, but you earn an average of $3000 from their back-end referrals, you can afford to bring in as many “break even” clients as possible. You can even lose money on the front end.
  2. Market the services of other lawyers to your clients. Instead of you taking on a new practice area, associate with other attorneys who are specialists in those areas and offer their services to your clients in return for a share of the fees (if ethically permissible) or in exchange for marketing your services to their clients. (You aren’t limited to working with other attorneys; you can also market the services of other professionals and businesses.)

A key number every attorney must know is the “lifetime value” of a new client. This includes the value of their repeat business, their referrals, and other revenue derived as a result of having them on your list. Take some time to determine this number and then work on increasing it.

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