This month’s column will focus on the first step of the approach: Research. I will help you understand research basics and how it can pave the way to a fact-based marketing action plan. Research is the first step of approaching any initiative — big or small.
“Why waste time on research? I know my client and I just want to get something out there.”
Sound familiar? The legal industry pays the least amount of attention to marketing research of any industry I know of. Why is that? Would you go to court without questioning and building a case? So why would you spend your money on a marketing initiative without trying to increase the odds of achieving your goals with a few facts?
I’ve worked for banks and law firms and led research arms. The difference in research investment is astounding. Any new project for a bank needs to be researched and business-cased. You’d be hard-pressed to find that rigour in a law firm. I’m not advocating spending tons of dollars and taking months of time, but some research and business-casing discipline before initiatives go forward are certainly good habits to get into.
If your marketing team isn’t creating fact-based initiatives and measuring results – you’ve got to ask why.
Research in law firms, outside of legal research, can be grouped as follows:
• internal research and analytics;
• competitor; and
• economic/market research.
There are many terms for marketing research and purists fight over terminology, but in our industry you will hear the “business intelligence” and “competitive intelligence” buzzwords as umbrella terms for the above four areas. I fight with the purists over what’s in and what’s out of the marketing research domain.
Research phrases you should know are: primary research, secondary research, and qualitative and quantitative research methods. (You can sound really research-hip by using the short-forms: “qual” and “quant!”)
Primary research is original research and secondary research is existing research someone else executed.
Qualitative research methods are those that give descriptive results. Quantitative research methods are those that result in numerical results. Numerical results can be statistically significant or not. Be careful — while quantitative results may look impressive, if they aren’t statistically significant, they really are directional or descriptive in nature and you have to be careful what conclusions you draw.
1. Internal research and analytics is all about understanding the mechanics of your law firm and you are probably pretty good at calculating your share of the profit when compensation time rolls around.
Applying these skills to understanding the financial underpinnings of your firm is a crucial skill that could help avoid having to shut your doors someday. Creating a dashboard of the key metrics that sustain your business, following your trends, and building in alerts when things trend abnormally might save your business. Alternative fee arrangements are a big trend and to structure them properly requires pricing knowledge based on your financial analytics.
2. Client/prospect research means research that allows you to retain and grow existing clients, and target prospects to acquire. This research may be obtained from internal and external sources using many different types of quantitative and qualitative methods. These research methods are just research tools like surveys, feedback interviews, and focus groups. Your time and billing and customer relationship management systems will give you a lot of client behavioural information. Behavioural information tells you what happened but doesn’t tell you why it happened. Research that tells you why things happened is called “attitudinal.”
Mining your client information is very valuable and can tell you which client-types or profiles are more profitable than others. This helps in pre-qualifying prospects worth prospecting. If you have a lot of data and are starting to use sophisticated analytics and statistical methods — you are wading into the land of Big Data.
The usual sequence of client research is to: a) mine your client information for trends and insights, b) design and conduct a qualitative survey based on some ideas and hypotheses you had based on data mining, and c) design and conduct a quantitative survey to obtain more precise results in order to create your fact-based action plan.
I have two basic cautions with client research:
• Assumptions are dangerous. Remember New Coke? The company went through all the right steps and spent tons of money and time on research only to find out it made the assumption if people liked New Coke they would switch from Coke Classic to New Coke. They didn’t actually ask that question. Oops.
• Be careful drafting survey, feedback, or interview questions. So many times the questions are not clear and there are multiple questions within a question. You will get meaningless results.
3. Competitor research is all about identifying and understanding your competitors. You need to know them so you can differentiate your firm positively and profitably. Your competitors aren’t always law firms. Accountancies, special boutiques, and in-house counsel can all be your competitors. There’s really no new business today. All your new business and clients come from your competitors. You need to know how to be more attractive than your competitors to win business.
4. Economic and market research is all about understanding the economic, political, and market dynamics of the geographies you wish to compete in. There is a lot of great free secondary research at your Internet fingertips.
Research is a critical component to marketing and will increase the efficiency and effectiveness of your marketing expense dollars. When in doubt, ask a research professional to help you out. That investment will pay you back.