Data is everything
Invest your marketing budget wisely, then monitor and use your data closely, says Qamar Anwar
It’s long been known that law firms and marketing haven’t been easy bedfellows.
But surely the industry has moved on and progressed – after all, these days marketing is king, isn’t it? Possibly not in the legal sector.
This year, First4Lawyers undertook research to try to uncover if lawyers understand what is driving consumers and how they were approaching their marketing as a result.
For this, we commissioned consultancy IRN Research to survey 100 personal injury (PI) and general consumer law firms on how much solicitors understand their clients, and to gauge firms’ marketing activity and spending.
With a backdrop of covid-19, we knew from the outset that this is a difficult year for all types of business; even more so for PI firms who are uniquely squeezed at one end by covid-19 and, at the other end, by next April’s launch of the Ministry of Justice’s whiplash reforms.
But the reality is, now more than ever it’s vital that firms understand what drives their customers.
Not working well
The backdrop to all this pre-dates the pandemic and goes back to December 2016 when the Competition and Markets Authority (CMA) released its report on the legal services market.
This found that the sector wasn’t “working well” for consumers and small businesses.
The report highlighted lack of transparency over price, service and quality, making it very difficult for consumers to compare providers.
None of this is new to any of us: it’s been a key focus for the sector for nearly four years now.
But what is surprising is where the sector is now at; and the seeming hesitancy to engage in moving this forward.
In September 2020, the CMA announced it would be undertaking a three-month review of the findings from its 2016 report, to assess what progress has been made across the sector.
While it is not undertaking a full assessment, it is keen to see that there are “initial indicators” that progress is being made.
The last thing any business needs at the moment is another stick to be beaten with, but we cannot stress enough the importance of this, particularly now.
Our research showed 40 per cent of firms have already cut their marketing budgets because of the pandemic, while 19 per cent of PI firms have made marketing staff redundant (11 per cent of general consumer firms), with another 12 per cent planning to.
A bullish 17 per cent of PI firms (double the number of general consumer firms) increased their marketing spend instead.
While the impact of covid-19 has been hard on businesses – and it can be tempting to cut all ‘unnecessary’ spending – now is the time to invest.
At First4Lawyers, we upped our investment considerably during lockdown as we recognised that now wasn’t the time to retreat; and that marketing spending at that time was far from unnecessary expenditure.
It’s when times are good that you take it easy.Look at Amazon: it stopped advertising during lockdown because the market played into its hands and restarted when shops began reopening.
We’re not suggesting you invest millions or hundreds of thousands, but whatever you do invest, the most vital thing is to then monitor the data closely.
Your marketing budget can quickly disappear without achieving the desired results, if you’re not careful. And even if it appears to be delivering, are you sure you’re making every pound work for you?
Data is everything and businesses now have so much access to it. Yet just 42 per cent of PI firms say they monitor the return on investment (ROI) on all their marketing, with a further 35 per cent doing so on some of it.
Six out of 10 solicitors told us they utilise their data to better understand how to engage with customers, while another 44 per cent use it to understand the purchasing decisions of their customers.
But staggeringly, almost a quarter didn’t make any use of the data at all. The last time we researched marketing trends like this in 2017, one concern was the decision-making process when it came to spending budget.
The proportion of PI firms where the decision is made at management or partnership level has remained steady at two thirds, and just 41 per cent at general consumer firms.
But are they best placed to determine the evidence and strategy for such decisions?
Only half of those firms analyse the performance of their marketing in the previous quarter or year when making spending decisions – again, no change on 2017 – with only 25 per cent of PI firms driven by competitor analysis.
It seems that too many firms are still making decisions based on gut instinct or anecdote, rather than data and hard evidence.
This means that lawyers are having to put more work into getting work, which doesn’t make sense if you have the data and can analyse and see where your prospects are coming from.
A good content strategy which is well-executed will pay dividends for your business.
Our research also highlighted an ongoing mismatch between what lawyers think is important to consumers and what consumers rate as important.
While you might be tempted to dismiss this as something that can be delegated to the marketing team and for-gotten about, you’d be making a grave error.
Engaging with consumers is no longer something that is a ‘nice to have’ if you’ve got time to fit it around fee-paying work, it needs to be front and centre.
If you don’t know what consumers are looking for, how do you know where to go to find new business? How do you provide a good customer experience that results in recommendations and great online reviews?
In an increasingly competitive marketplace, all lawyers now need to have a savvy marketing hat they can wear.
Consumers today are savvy and like to source services in a similar way to how they shop online.
They expect information about price, service and quality to be readily available – if not, they easily move on and look for where this information is available.
While more than two thirds of solicitors we polled believed that clients shopped around before choosing a lawyer, the reality is that only around a quarter do, highlighting the importance of making a good first impression.
Also, recommendations from family and friends, and having a local office and a quality mark, don’t rank as highly with clients as lawyers think.
Surprisingly, most solicitors still don’t think online searches are that important, although PI lawyers (15 per cent) are nearly twice as likely to think they are the main route to finding a firm than other lawyers (8 per cent).
Firms who underestimate the importance of online searches are making a big mistake.
It’s the best quality enquiry out there; and our statistics show that a contact that’s come from search engine marketing activity is more likely to convert into a live lead than from any other form of marketing.
Lockdown had a huge impact on buying habits, with consumers accelerating their online use to purchase both goods and services, which is likely to last now.
And research shows that many consumers, particularly younger ones, would rather communicate via web or mobile than telephone.
Simply knowing this means you can channel your marketing spend more effectively and gain more bang for your buck.
By and large, the legal market seems to have coped admirably with the pandemic and there are positive signs in many practice areas that the market is rebounding.
But business conditions are likely to be challenging for some time to come and it’s clear that the PI market, in particular, is going to get more competitive.
If April’s whiplash reforms push firms out of low value road traffic accident (RTA) claims, then there are going to be even more eyes
turning to other areas of PI.
Add in the regulatory pressure to encourage consumers to shop around and getting them just to look at you in the first place is going to get harder.
There are 10,500 law firms in England and Wales and plenty of them do PI.
To consumers, they largely look the same. So if you are going to attract new clients, you need to be smart, strategic and stand out from the crowd.