Seeing through price transparency
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Canny conveyancers have long understood the benefits of price transparency, argues Paul Hajek; it's just a shame the regulators still don't see how informed consent is nothing without context
The short-awaited rules on price transparency became a thing at the beginning of December.
Consumers will now have more information on making an informed decision before choosing a conveyancer on cost (price or value, you choose), service provision, key stages, timescales and team make up.
There is little difference, for obvious reasons, between the regulators in their approaches to implementation of the new rules. The main debate has been undoubtedly centred on price transparency.
I have been intrigued by varied responses from other law firms to the changes. The more commercially minded see pricing as an essential part of the natural sales cycle, while others see the rules as just more burdensome compliance.
Conveyancers with panel considerations and multi-branches are favouring their least-worst option of producing ranges or averages rather than fixed-fee quotations.
I’ll put my cards on the table: I’m a big fan of price transparency. I have been since 2009 when our first Conveyancing Calculator went live on our website.
The 18 per cent or so of conveyancing firms who understood online price transparency have been doing very well, thank you.
ABUSES CHECKED
The new rules should end some of the previous abuses. There will be an end to “Conveyancing fees from £99” and a particular bugbear of mine, the conveyancing estimate – a well-worn tactic which has been abused to win instruction on headline lower fees.
As I pointed out to the SRA researchers, a conveyancing estimate of £500 which ends up as a fee of £750 is 50 per cent wide of the mark.
Some conveyancing firms, who routinely add a referral fee to their standard fee (instead of incorporating the referral fee as a marketing expense) may find it more difficult to justify this approach to prospects.
MENU PRICING
Another feature of the new rules will be a better understanding by consumers of what a standard sale or purchase fee covers.
We have operated a menu pricing system for approximately 20 years ever since the lenders introduced their new standard format where Section 8 detailed the legal fee for acting in a mortgage.
I have never been able to understand why some conveyancing firms charge a client the same fee, for example, where one has a mortgage and another does not.
We explain to clients that we only charge for work we carry out and that it is unfair for clients without a mortgage to subsidise those clients who have mortgages. Clients understand this anomaly very well.
I’ve been banging the drum for price transparency for quite a while. I did a series of talks for Law Firm Services, a software provider to the property industry, both at their roadshows and at their conference back in 2014. There, I posed three questions for conveyancers and asked for a show of hands. Here’s what the response was:
1: How many of you have ever researched how much something costs online before? Of those willing to play, 100 per cent raised their hands.
2: When researching on a particular website and the cost of such a product or service was absent, what emotion did you experience? Responses included frustration – the company was ‘hiding’ something – and a consequent lack of trust.
3: What did or would you do next where pricing information was absent? All agreed we would move onto the next site until we found what we wanted.
CONSUMER BEHAVIOUR
Word of mouth and recommendation will never disappear, but the internet has changed consumer behaviour for good.
Increasingly, clients and prospects use the internet to ask around; to be better educated and get information in advance of contacting and instructing a conveyancing firm.
Prospects are looking for more depth and a more detailed understanding of the law and legal process, what it entails, what to look out for, any tips and advice before making key decisions at a time that is suitable to them.
Clients can ask questions, read reviews, digest content and start conversations with people they’ve never met. And, they want to make their own minds up using the social proof available on line as their modus operandi at any time of the day or night.
The power of pre-selection prior to a prospect contacting a law firm either via an online calculator, by phone, chat box or walk in cannot be underestimated.
HARD DATA
I have had the bene t of hard data from experience at my firm. We use the power of our conveyancing content in all its forms blogs, video, infographics, cartoons and LinkedIn’s SlideShares, booklets, eBooks, and conveyancing courses to attract prospects and clients to our website.
We use modern inbound sales and marketing techniques such as calls to action and landing pages to persuade prospects to register their interest in using us for their home move.
By far the most powerful has been our online calculator. The landing page associated with it has a 47 per cent conversion rate. That’s almost half the people who land there, giving us personal information to access an instant quotation.
This in turn allows our sales department to follow up and start a conversation which we hope leads on to an instruction. More than 99 per cent choose to do so, with under 1 per cent choosing to give fictitious names, emails and phone numbers.
This is the quid pro quo for giving such free informative content before deciding they would like to hear more from us. The resulting sales conversation is the start of the buying process: informed choice followed by informed consent.
Some lawyers believe the Competition and Markets Authority’s ultimate aim is to reduce by regulation the cost of legal services and turn some legal services into commodities. Most conveyancers will tell you that this is strange, as the competition is already fierce. Price without context (brand, if you have a recognised local or national one, will undoubtedly assist) is a dangerous road to commoditisation.
INFORMATIVE AND EDUCATIONAL
We should welcome pricing transparency with informed choice. Consumers will no longer be left hanging, searching in vain on a law firm website for elusive or non-existent details of how much conveyancing might cost.
But, disappointingly the regulators have failed to fully understand that every conveyancing firm is NOT in the market to win EVERY prospective customer. Most firms have clearly defined markets to target. We certainly have no ambition to be all things to all consumers. We do not have a desired client persona within our client journey who is solely interested in price and we have no desire to engage them as clients.
Law firm websites should be informative, educational and fun – ours is – and commercially viable. Lead generators support content to entice prospects to raise their hands and start a conversation.
We are businesses and businesses should not be required to give information to prospects who have no intention of becoming clients. It’s just a pity that the regulators have so far failed to understand the nuances of informed choice and its connection to informed consent.
There was no need to make pricing prescriptive but now it’s here the more enlightened and client centric firms will continue to flourish. Others late to the party may be pleasantly surprised that client relationships prosper more quickly when cost does not dominate the conversation. Just don’t talk to me about price without context.
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Paul Hajek is managing director at Clutton Cox