Squaring up to the age of the customer

The Law Society's January 2016 report on the future of legal services identifies a number of driving forces influencing the sector. Two of these, buyer behaviour and competition, focus attention on the need for firms to have a mature strategy in place for customer experience.

There is a well-established acceptance of the direct and powerful relationship between customer experience (CX) and financial success, as exhibited by the majority of professional services providers. But delivering high-value, personalised experiences across both personal and digital touchpoints demands focus, investment, and operational commitment. It's a big challenge.

According to an October 2015 report from Forrester, the international research and advisory firm, this is 'the age of the customer' and 2016 could be the watershed year in which the winners and losers are determined. Leading companies will have CEOs who drive change and square up to the rapidly changing market, leaving behind old leadership structures.

Forrester identifies key traits for CX leaders, customer-obsessed organisations that will lead the way by differentiating themselves. We see these reflected in our work in the field of CX, which is designed to support our network members in building and developing infrastructure, and there are four areas that should have particular resonance for law firm leaders.

Culture

Culture fuels change, rather than the other way round. It demands the right leadership, prepared to invest in culture to create customer-centric change and accelerate the business pace. And the importance of employee engagement in achieving cultural change can't be underestimated. One has only to look at retailer John Lewis to see the results of its strategy of putting employees first.

Certainly, the impact of culture is demonstrated time and again in our network's agenda for both CX and employee engagement. Our firms regularly measure the extent to which employees know where the firm is going and how motivated they are to help achieve business goals.

Customer-led and loyalty driven

Traditional customer loyalty is changing, across all sectors. Today's customer expects to be treated as an individual and legal services have a particular challenge in that, according to the Law Society report, consumers are still apparently 'confused' about what a solicitor can offer them.

In the past, firms thought they delivered value through their legal expertise, but clients today are looking for value beyond that. They seek personalised service, rather than passively receiving something that suits the provider. Runners want their running shoes tailored to their gait; drivers want their motor insurance customised to include add-ons such as breakdown or legal expenses cover.

Law firms need to understand their customers, identify their needs, and tailor-make services to suit them. Where previously discrete services were delivered at departmental level, now it's about providing the right package of services for individual clients at different life and business stages.

Analytics and data

Data is the golden ticket to communication. Today's customers expect every interaction to be informed and enhanced by knowledge of their previous history and preferences. This requires existing client data to be analysed and used in an intelligent and creative way. Effective data analytics and cutting-edge algorithms will be a major competitive weapon in future, and the key to providing the truly personalised experience clients seek.

Data also has the potential to influence legal sector customer behaviour, as data privacy continues its shift to becoming a value proposition in itself. Cybercrime and the rise of identity theft have changed the dynamic.

Digital innovation

Digital innovation is proving to be a core driving force in business transformation, when embedded at the heart of and extending into all parts of the business. It's not enough to simply bolt on digital experiences or tools.

We have seen many firms making huge investments in IT to streamline processes and upskill staff, recording growth in turnover as well as enhancing workforce agility. Technology has an important role to play in attracting and retaining high-quality employees, with younger workers in particular viewing the available technology as a key determining factor in evaluating employers (see PwC's 2011 'Millennials at Work' report).

They say that disruption is now the new normal, but traditional firms can fight back against market disruptors and challengers. Market footprint, capital, and massive amounts of customer data can all be turned to a firm's advantage, but only if the sector uses these as the springboard for change and to adopt more agile ways of working and interacting with clients.

Firms that succeed in future will have already faced up to the change and disruption taking place, and are now focused on differentiation through innovation, both human and digital. They are able to respond swiftly and are driving through the profound change needed to compete and win. SJ

Helen Hamilton-Shaw is member engagement and strategy director at LawNet