The lifetime value of a client

April 23, 2015 by
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Most lawyers invest more time and money in acquiring new clients than in retaining existing ones. And yet the cost of retaining clients is a fraction of the cost of acquiring new ones.

If you want your clients to keep coming back to you, the first thing you need to do is to realize that it’s worth making them happy.

And it is.

Your average client is worth so much more to you than what they pay you for their initial engagement. Their value is an average of all of the fees they are likely to pay you in the future, over their lifetime as a client.

Some clients won’t come back because they don’t need you again, but others will hire you frequently. Some will have small cases, others will have big ones.

And every client can send you referrals, which also count towards their average lifetime value.

Once you understand that the client who pays you $5,000 this year might contribute an average of $150,000 to your bottom line over their lifetime, you will appreciate why it is worth investing in them.

If you only look at the $5,000, you might resist the idea of spending $50 per client per month to stay in touch with clients via a newsletter, birthday cards, and small gifts. If you look at their lifetime value, however, you might look for ways to invest even more.

Consider the cost of acquiring a new client. Take everything you spent last year on anything that could be considered marketing (and don’t forget the value of your time) and divide that number by the number of new clients you signed up.

If you spent $2,000 to bring in one new client who pays you $150,000 over their lifetime, you did well. So I’m not saying you shouldn’t try to bring in new clients. Just that it’s more profitable to keep your existing clients coming back.

It’s also much easier to get existing and former clients to hire you. They already know you and trust you. You don’t have to find them or convince them that you can do the job. If they need your services and you kept them happy in the past, you don’t have to do much to get them to hire you again.

The most effective marketing strategy for any professional is to make an ongoing effort to keep their clients happy. Find out what they want and give it to them. Encourage them to tell you how you are doing and what you could improve. Find out what they expect of you and do everything you can to give them more.

Because over their lifetime, they are worth a fortune to you.

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Filed Under: Client loyalty, Client relations, Increase your income, Leverage, Referrals Tagged With: ,

It’s official: I’m running for President (but don’t vote for me)

April 10, 2015 by
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No matter what you think about politics, there’s no question that it can be a great way to advance your professional career. You get to meet a lot of influential people. You get your name and face in front of potential supporters and future clients. You get to sharpen your speaking and networking skills. And for the rest of your life, your bio will note that you are a former candidate for office, meaning you aren’t the average schmo.

So consider running for office. Just make sure you don’t win.

If you win, and you’re honest, you’ll have to take a big pay cut. If you want to continue to win, you may have to sell your soul.

Okay, it might be alright to win an unimportant local office, but only if you can serve part time. Just don’t get carried away and think about running for higher office, unless of course you are already wealthy and/or idealistic to the extreme.

Another way you can ride this pony is to work behind the scenes to support a candidate. Your name may not become well known to the public, but you get to go to rubber chicken dinners with people who can send you business, teach you about marketing and building your brand, and introduce you to other influential people.

So yes, I’m running for President; if you want to work for my campaign, let me know. I can’t pay you anything, and remember, we’re not going to win this, so if you’re really talented or hard working, please don’t apply for the job.

That’s all for now. I’ve got to finish working on my concession speech.

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Filed Under: Marketing legal services, Networking, Public Speaking, Referrals

Don’t stop to pick up pennies or you’ll miss out on the dollars

April 8, 2015 by
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At one point in my legal career, another lawyer and I were flipping real estate. The market was hotter than Hades and we were making a boatload of money.

I thought, “Why not get a broker’s license and get a piece of the commissions, too?”

Bad idea.

Many brokers didn’t want to work with me. Others were willing to do so but brought their best deals to other investors first.

If you compete with people who bring you deals, you get fewer deals.

I got rid of my broker’s license.

I also realized that if I wanted brokers to bring me the best deals, I had to make it clear that I would never try to cut their commissions, as many investors do. But I took it a step further. I told them that if I made money on the deal, I would cut them in on the profit. In addition, when it came time to put the property back on the market, I assured them that they would get the listing.

Guess who they brought their deals to?

If you want insurance agents and financial advisers to send you referrals, get rid of your insurance and securities licenses. If you handle divorces and you want referrals from business lawyers, think twice before you include business law on your list of practice areas. If you have bar licenses in other jurisdictions where you don’t actively practice, consider retiring those licenses.

When you compete with people who send you referrals, you get fewer referrals.

Think about where you earn most of your money, or want to, and focus on that. Don’t stop to pick up pennies or you might miss out on the dollars.

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Filed Under: Referral sources, Referrals, Specializing

Paying for referrals and getting away with it

February 20, 2015 by
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Okay, let me first say that you need to check with whoever regulates you and make sure that this is something you can do. I’m covering my behind by telling you this so please cover yours.

It’s a very simple idea, really. But it could bring you a lot of business in the short term, and a lot more long term.

You’ll need a website (that you control) and a way to capture email addresses. An autoresponder is your best bet. You can see what I use and recommend here.

Yes, you can also do this “old school,” i.e., manually, but you’ll get better results if you automate everything and spare yourself some calluses.

Now, you’re not really going to be paying for referrals. You’re not even going to ask for referrals. Not directly, anyway. Instead, you’re going to ask people to help you build your email newsletter list. You ask them to refer subscribers, not clients.

As people come to your website to subscribe, they see what you do. Some of them hire you, or take the next step in that direction.

After people subscribe, you stay in touch with them. You send them helpful information, and information about what do. Over time, some of them hire you. Or send you referrals. Or send you other subscribers who hire you and send referrals.

Build your subscriber list and you build your client list.

You can stop right there if you want to. Simply ask your clients, friends, readers, subscribers, social media connections and anyone else who will listen to help you build your subscriber list. They’ll help you because they like you. They also want their clients and contacts to know about you and the goodness you offer.

Ask them to Tweet, Like, post, and otherwise recommend your newsletter or download link (for a report, ebook, or other incentive) and your list will grow.

No legal or ethical issues with this, right? Where it gets iffy is when you offer to compensate them for doing so. But doing so could multiply your sign-ups manifold. If you would otherwise get 100 sign-ups, offering compensation might get you 1000.

What you do is announce a contest. Anyone who sends subscribers has their name entered in a drawing for a prize.

How do you track this? How do you know who sent subscribers?

The simplest way is to hold another drawing for all of the new subscribers, with an equally spiffy prize. When you draw their name as the winner, you email them and ask them who referred them and they both get a prize.

There are other ways to “pay” people for their help in building your list. You can sell your book, for example, and set up an affiliate program. There are many others. But if you are allowed to do so, a drawing is a simple and effective way to pay for referrals and get away with it.

For more ideas, get The 30 Day Referral Blitz.

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Filed Under: Email, List building, Newsletters, Referrals

If my dentist managed your law practice

January 23, 2015 by
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My dentist send me an email that said:

NORDSTROM GIFTCARD GIVEAWAY

INVITE A FRIEND AND WIN A NORDSTROM GIFTCARD!

Introduce friends, family and co-workers to our office, and when they come in for their appointment between now and February 19th, you will be entered into a drawing to win a 0 NORDSTROM Giftcard!

The rest of the message said when the drawing would take place and that the “New patient must complete routine exam, cleaning and x-rays to qualify for drawing entry. One entry per person seen in the office.”

Not bad. Get more referrals, total cost: $100.

Two things come to mind:

(1) You could use something like this in your law practice, and

(2) If you do, you can get more bang for your buck than my dentist

First, let’s put aside the notion that you can’t do something like this in a litigation practice. You can. Not necessarily to get clients immediately, although you might, but to build your email list, which will eventually lead to new clients.

Now, how could you get bigger results than my dentist?

For starters, how about something obvious like having the drawing for the referring parties instead of (or in addition to) the new clients?

Hello. . . ?

Yes, it’s nice that you’re going to enter my friend in a drawing if I refer him, but how about something for me? Give me a reason to think about this for more than the three seconds it takes me to delete your email. . . let me imagine that I might win this thing. . . let me get excited and start thinking about who I could refer. . .

Okay, what else?

How about not requiring the referral to actually hire you?

It should be enough if they only have a free consultation, or even if they just schedule one. Or only opt into your list.

The name of the game is getting people to know about you and how you can help them. It’s about building your list.

Get more people on your list and you’ll get more clients.

The prize doesn’t need to be won by someone who referred a client (or became a client). So what if the “winner” is someone who refers ten people, none of whom become an immediate client? As long as your list is growing, your practice will be growing.

What else?

Well, you might offer a bigger prize.

Assuming your margins are higher than a dentists (arguable, I know), you can afford to offer the winner more than $100. You may not have to, it’s true, because winning anything is exciting. But a $250 prize sounds much more exciting, especially at Nordstrom where $100 would only buy you one shoe. For another $150, you might get a lot more participation.

You could also offer more prizes, e.g., three or five winners. Or you could offer a big first prize and lesser value second, third, and fourth place prizes.

NB: if you’re thinking of awarding prizes based on the number of referrals, i.e., the winner being the one who refers the most clients, do your homework re possible legal and ethical issues.

One more thing.

How about promoting your drawing to people who aren’t your clients? Contact other professionals you know (and ones you don’t know) and offer the same deal. Why not offer this to anyone in town (through your blog, social media, ads or mailings, or word of mouth)?

Would it be okay if you got referrals from strangers, people who have themselves never hired you, people who only send referrals so they can get a shot at winning a prize?

Yeah, that’s what I thought.

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Filed Under: Advertising, Email, Leverage, List building, Marketing legal services, Referrals

Bundling isn’t just for political campaigns

January 21, 2015 by
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I just got an email with a great offer on a “productivity bundle”: “For just $59.99, you can unlock one-year subscriptions to Wunderlist Pro, Pocket Premium, Evernote Premium, and LastPass Premium.”

If you’re interested, here’s the link.

Now, put on your thinking cap. How could you use bundling to market your services?

Find one or more compatible service providers–lawyers in different practice areas, (including lawyers in your firm), a CPA, a financial planner, or a business owner–anyone with a product or service your clients or prospects might want and need–and create a bundle that each of you can offer to your lists.

It might bring in more clients but it will definitely get your name in front of a lot of prospects and help you build your list. It’s also a great way to deliver added value to your clients.

You could offer a “entry level” service, a review package, or a maintenance contract. Or you could also do this with information products. (If you handle litigation only, this is probably your best bet.)

Your ebook, video course, recorded seminar, checklist, form set, or anything else, combined with something similar from other professionals, all bundled up and available for a small payment, or even free.

Of course putting this together is a great way to meet other professionals and start building a referral relationship.

Check with your handlers to make sure you are allowed to bundle services with non-lawyers. And note that some professionals (i.e., insurance, securities) probably cannot bundle their products, but they may have a service or information product that would work.

Talk to another professional and tell him or her your idea and see what they think. You only need one other participant to create a bundle, but I’m betting that once there are two of you, you will quickly find others who want in.

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Filed Under: List building, Marketing legal services, Networking, Referral sources, Referrals Tagged With: ,

What do you “know” to be true about legal marketing?

January 13, 2015 by
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Smart people once believed that it was impossible for man to fly. Most accepted this as truth and never considered challenging it. The Wright brothers thought differently and changed the world.

Orville Wright said, “If we worked on the assumption that what is accepted as true really is true, then there would be little hope for advance.”

It got me thinking about what we (lawyers, society) believe is true about the subject of legal marketing.

Not long ago, many lawyers said that other than writing scholarly articles, public speaking, and networking, marketing wasn’t appropriate for an attorney. While this is still true in some places, most of the world has evolved.

Advertising was long thought to be inappropriate, even unethical. Most western jurisdictions now recognize that with certain standards in place, advertising isn’t the stain on the profession it was once thought to be.

Question for you. What do you know to be true about legal marketing? What do you do, or refrain from doing, to market your practice based on your beliefs?

Let’s take the subject of referrals. It is widely understood that you get more referrals if you ask for them. Yet many attorneys don’t ask. They think it makes them look weak or needy, or they don’t know what to say so they don’t even try.

Our beliefs create our reality. If you believe that asking for referrals makes you look weak or is an imposition, you won’t ask. On the other hand, if you believe that referrals are good for all three parties (the referral giver, the client, and you), your entire framework changes.

You’ll ask for referrals because you know that a referral helps the referred client save time and avoid the risk of making a bad decision. You’ll ask for referrals because you’ll know that your clients and contacts want to help the people they know get the benefits you offer and you’ll know they also want to help you.

If your beliefs about referrals currently preclude you from asking for them, changing those beliefs could transform your practice.

It’s time to re-examine all of your beliefs about legal marketing and re-validate them. Are they still true? Has anything changed? Are there any exceptions?

Have you “closed the door” to things you might now consider?

Have you looked at things as black and white and not seen the gray areas within within which you could operate?

Step away from the construct that is your existing practice and look at it from a distance. See your practice and all of your existing beliefs as contained in a giant box.

How can you think outside that box?

Because progress never occurs inside the box.

Marketing is easier when you know The Formula

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Filed Under: Legal industry, Marketing legal services, Referrals Tagged With: ,

What to do when you have nothing new to offer

January 12, 2015 by
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What’s new?

Unfortunately, for most attorneys, the answer is “nothing”. They offer the same services today that they offered last year, and the year before that.

The clients change, the cases have different elements, but for most attorneys, same old same old. Even if they offer a menu of services, the menu rarely, if ever, changes.

Worse, many of their clients need them only once in their lifetime.

If attorneys owned any other type of business, they would regularly offer new products or services. Their business would always be growing.

But if a client doesn’t need another divorce, or doesn’t get in another accident, it’s game over.

It would be great to be able to offer the client another service, wouldn’t it? But if you specialize (as you should), you probably don’t have anything else.

Some attorneys offer updated documents, reviews, and modifications, and that’s good. But what about everyone else?

Well, there are a couple of things every attorney can do.

First, you can partner with other attorneys and promote their services to your clients. In return, your partner promotes your services to their clients. You can also do joint ventures with other types of professionals, and businesses, too.

Your clients have problems and needs that go beyond what you can do for them. They need help finding high quality professionals and vendors. They would love to get a good deal, or at least know they aren’t getting a bad one.

You can help them, and in so doing, help yourself.

Think “clients” not “cases” or “engagements”. Continually look for ways to help your clients with their other business or personal needs.

See The Attorney Marketing Formula for different ways you can work with joint venture partners.

Second, no matter what kind of practice you have, you should continually be creating new content.

Every article, blog post, report, seminar, video, or ebook you produce and put out into the market place can bring you new clients.

They can bring traffic to your website via search and social sharing. You can ask your clients and contacts, (and joint venture partners), to share our content with their clients and lists. You can offer them for sale on Kindle and other venues, where millions of prospective clients can find them.

Each piece of content you create educates prospects about what you do and how you can help them. It pre-sells them on the need for an attorney, and why that attorney should be you. And it prompts them to contact you to ask questions, make an appointment, or sign up for your list.

New services, albeit someone else’s, and new content. These are your new products and services. This is what you should continually create and offer.

Then, when someone asks, “What’s new?” you’ll be able to show them.

To learn more about joint ventures, get this

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Filed Under: Increase your income, Legal industry, Leverage, List building, Marketing legal services, Referrals, Web traffic

The best way to get more legal work

December 19, 2014 by
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I spoke to an estate planning lawyer the other day. He’s getting ready to do another mailing to his client list to encourage them to make an appointment to review and update their estate plans, due to a change in the law. It seems many people are either unaware of the new law or believe it doesn’t apply to them.

We spoke about the content of the letter, including whether or not to extend a special offer or incentive to get more people booking appointments.

I am sure he will get more work out of this, but not nearly as much as he could.

One letter (or email) isn’t enough. Selling your services to prospects or clients is a process, executed through a series of communications. Even if the letter he sends is brilliant and makes the phone ring, a second letter would bring even more.

Some people won’t read the first letter. Some will mean to call, but forget. Some will need time to take care of other business. Some won’t have the money today, or not want to spend it today, but that will change over time.

Never rely on a “one off”. If you do, you’re leaving much dinero on the table.

Your letters and emails, your newsletters, and everything else that comes out of your office, should be part of a sequence of communications, designed to educate and stimulate response.

But don’t stop with the written word. Or other static ways to educate and motivate your list (e.g., videos, seminars, speaking engagements, etc.)

I told this lawyer that if he wants to book more appointments, there’s something else he needs to do.

Call the clients.

You are their lawyer. They need to have this work done. You’ll book more appointments and get more legal work if you talk to them.

Actually, have someone else in the office call on your behalf: “Mr. Twinkletoes wanted me to call you to make sure you received his report about the recent changes in the tax law and to see if you have any questions. He knows you’ll want to take care of this immediately, so we’re booking appointments right now for the week of the 5th. I have an opening on. . .”.

You’ll get waaay more appointments if you call.

What’s that? You don’t do estate planning? Your practice area doesn’t have a lot (or any) repeat business?

No problem. Here’s a couple of things you can do.

  1. Team up with an estate planning lawyer and promote his or her services to your client list. That lawyer can then promote your services to his or her list.
  2. Call you clients and tell them you have a special offer or promotion going right now and you want to let them know so their contacts can take advantage of it. Referrals, baby.

Your list is incredibly valuable. Repeat business, updates, and referrals await you. Call and get some.

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Filed Under: Client loyalty, Marketing legal services, Referrals Tagged With: , ,

How to get your first client (or your next client)

November 13, 2014 by
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An attorney who is starting his own practice wrote me asking how he could get his first client.

I’ve written before about the value of doing a S.W.O.T. analysis. “S” stands for “Strengths”; “W” means weaknesses; “O” is for “Opportunities”; “T” means “Threats”. You can read more about this here and here.

If you’re launching a new practice, or setting goals for growing and improving your existing practice, a S.W.O.T. analysis is a good place to start.

The attorney who wrote me didn’t tell me anything about his background or experience, or anything else, frankly, other than the fact that he doesn’t have an office. (I’d put the latter in the category of “Weaknesses”. Get thee some office space, my legal friend.)

Anyway, getting your first client. Or your next client. Start by assessing your “Opportunities” (and keep an eye on your “Strengths”).

Who do you know? Make a list of employers, your employers’ clients with whom you have a relationship, other lawyers, and business contacts. Include family and friends on your list.

Who do you know socially or from church? Do you have hobbies or something you do outside of work? If there are other people involved, put them on your list.

The point is that everyone you know, or have known in the past, may have legal work for you, or referrals. They may be able to introduce you to people who have work or referrals.

To get your first client, contact everyone you know and let them know what you do and what you want. Tell them how they can help you and ask them to do that. Ask them for referrals, ask them for introductions, and if they have experience in the business world, ask them for advice.

While you’re at it, ask them if they know where you can find an office space. Which reminds me, when you get an office, get in a suite or building with other lawyers. You can get work from them. That’s how I got clients when I opened my first office. Overflow, conflicts of interest, appearances.

What else?

Create a website. Add ten or twenty articles or posts that demonstrate your expertise. You need an an online presence so prospective clients and referral sources can find out what you do and how you can help them.

In fact, do this first. Then, when you contact everyone you know and tell them what you’re doing, you can send them to your website.

If you don’t know how to create a website that pulls in business, get my course, Make the Phone Ring, to learn what to include on your website and how to use it to get traffic, build a list, and get new clients.

Other opportunities? Look around you. Find some places to network or deliver a presentation. You’ve got the time. Don’t sit there organizing files, go meet some new people. Look for people you can help, and not just with legal issues. Send them business and introduce them to others who can help them. Build a relationship with them.

Every day, you need to build your email list. All of your marketing efforts from this point on should be designed to get more people to opt into your list. As your list grows, and as you stay in touch with them and remind them that you are available to help them solve legal problems, your list of clients will grow.

That’s enough for now. Do these things and you’ll have your first client. Or your next client.

Want more referrals? The 30 Day Referral Blitz shows you how.

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Filed Under: List building, Marketing legal services, Marketing Plan, Networking, Online Marketing, Referrals, Relationship marketing Tagged With: ,
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