on 6 September, 2010 Email this Email this - Print this Print this

We’re looking at the key marketing challenges facing law firms and providing lots of practical advice and insights.  ‘How to build an accurate client database’ is the second a series of articles by Jon Hepburn at The Fedora Consultancy (CoreLegal’s marketing experts)

How to build an accurate client database

As an existing provider of legal services, you already have a considerable advantage over any new competition. That is, a bank of customers who already know you and are doing business with you. But, the value of this is limited if you don’t know who buys what from your firm, why they do so, when and how.

  • Your client database is a potential gold mine. Effective management of it can help you get the most out of the business you already have and give you access to potential new clients for other services.
  • It can also give you valuable information on how to develop your product and service delivery. And, it is widely accepted that it is cheaper to sell more to your existing clients than to go out and find new ones so it makes sense to make sure that your database is accurate and up to date.
  • The costs of developing the database should be seen as an investment likely to produce clear and obvious benefits to the law firm in terms both of enhancement of goodwill and the generation of new work. And importantly, when it comes to attracting external investment.
  • With multi-disciplinary practices and alternative business structures starting soon, firms considering these will undoubtedly find that their value to others as an investment opportunity will depend on their ability to attract future business. A firm’s database thus becomes a significant asset.
  • Many of you will already have the required technology in your case and practice management systems to keep in touch with past, current, and potential clients. However, some effort may be needed to re-organise your existing data into a useful system from which regular and, most importantly, relevant information can be sent.

With a detailed knowledge of your clients, the ability to pro-actively manage your relationship with them increases, as does the ability to offer more relevant services and focus on the profitable work the firm is seeking.

How To Profile Your Current Clients

This will help to organise your database and getting more of the type of business you really want.

  • Profiling, or to give it its technical name, ‘segmentation’, is a method of creating distinct groups of clients with similar needs. This means that a subset of your client base can be selected as a specific target market and reached with distinct marketing activities.
  • There are many different ways of doing this, but by work category and activity level is often the most useful when it comes to legal services. They provide a good starting point, especially if you don’t have much information about your existing clients.
  • If you are profiling by category, you may divide them into, say, private, commercial and publicly funded. If you are profiling by activity level, this involves quantifying the volume of clients you actually have. Doing this will enable you to observe any different purchasing patterns and estimate their potential value, both in the short and long-term.
  • Obviously, devise your own categories but, if you are looking at each legal service you offer, make sure you count clients for each service they use. The important thing is that you do categorise them and don’t treat them as all the same. Do remember though that it is better to form a dialogue with 80% of your clients rather than spend weeks trying to identify all of them.

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Topics: Business development · Law Firm marketing · Marketing planning
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