Is It Time to Commoditize Your Practice?

Recently, in initial meetings with prospects, there has been a significant increase in questions relating to the price of our planning. This had not occurred previously in my practice. I undertook the job to examine why it was occurring by asking clients, prospects, and referral sources and discovered there is a tremendous amount of financial fear in the marketplace. Everyone is holding on to their discretionary dollars. Most people view estate planning as a discretionary expense. We are now competing with Best Buy and Home Depot for clients’ dollars. Those that would have considered estate planning in the past are now more concerned and requesting lower fees. I also witnessed other law firms in the marketplace offering to do what we do at “half the price". This put a lot of pressure on me to consider changing my practice model to a commodity-based model and start getting into a price war with the other attorneys in town. I opted not to, but instead, made a strategic change to my business model which has served the best of both worlds.

After hearing fear from clients and prospects, I began to sit with several referral sources to discuss what they were finding in their practices and interactions with clients. Interestingly, I discovered two schools of thought among advisors. One school related to those that agreed with the clients that it was all about price. This group of advisors determined their value to their clients was find ways to "save them money" by seeking out the cheapest attorneys in town. The second group of advisors was staunchly opposite. They, in fact, were compelled, now more than ever, their clients needed effective planning, and more important than price was to ensure they had the proper planning to alleviate their fear and anxiety and protect them where they needed it most. Interestingly, this group of referral sources assumed their clients will continue to hire me regardless of our price because the referral source believed in what we were doing and the method in which we were able to show value to the client. Ultimately, what I realized is, this group success was based predominantly on relationship and trust they were able to have with the client.

So what is one to do in this conundrum? As a solution, I modified my conversations with clients to offer either. I am simply speaking into their listening in a way that makes a difference for them. Our process is the same but we modified the conservation to advise clients on the difference between Wills and Trusts and more individualized planning to accommodate the individualized personal needs of the family not provided by the “standard” plans. The difference, however, is now I explain to those who are more “price” oriented, how our “standard” plans are competitive with those "other attorneys" talking about prices. In fact, we have a price match guarantee. We also explain the 7-10 differences available for a “personalized” plan to determine if it is important to them.

I have discovered two things with this new approach. First, 30%-40% choose the standard plans and 60%-70% choose the personalized. Second, I recognized not all clients are willing to pay for the customization and individual planning and are satisfied with the general "commodity-type" trust. This enabled me to have these clients hire me when they, otherwise, would not have. My job as a counselor is not to dictate to clients whether they need a personalized plan or a standard one, but to offer them options so they can choose the one best for them.

The critical element to the success of this new approach, however, is dependent upon my firm's ability to ensure the process for the standard plans is more streamlined, takes less time, and does not provide any customization. Because remember, a confused mind says NO! Most lawyers, in my experience, want to customize everything, even if the client is not willing to pay for it. This has been the strength of our two-platform system where we are offer standard documents and personalized documents. A single meeting educating the client on all the options and having them do an analysis to choose what's best for them, will easily guide those that are price-oriented into the standard plan and those that are results-oriented into the personal plan. All this has been integrated in the MPS “Client Enrollment System”. Advisors are extremely comfortable with it because now they have the ability to refer all of their clients to us even those that are more price conscious. So the question of whether it is time to commoditize or not? Answer: Absolutely not. Always maintain your ability to stand above the rest in the marketplace to create personalized plans, but also respect clients’ wishes and commit to help guide them to the plan they are comfortable with. Most importantly, ensure your office systems and processes distinguish between the two so you can be efficient and consistent in the marketplace, and oh yeah…profitable.

How Am I Getting Referrals?

Referrals are the lifeline to any business, particularly a law firm. Over the last 18 years in practice, I have found many ways to generate referrals. This new economy, however, has changed the impact on each and garnishes different results. The following is my observations from "the trenches".

There are generally three ways to lead people to contact you: (1) retail marketing, a direct call to the consumer; (2) relationships, both personal and business; and, (3) branding, what you stand for in the marketplace.

Retail Marketing. Retail marketing has had a diminishing return over the last 10 years, but still proves to a viable approach. Ads in newspapers, radio, or other publications, must call awareness to the services you provide to target those needing your services now. Chet Holmes International did a multimillion dollar study and learned that at any given time 3 % of the population needs what you have to offer right now. An additional 6 % will need it in the near future, typically less than 30 days. Of the remaining 91 %, the study revealed, approximately one third, doesn’t know whether they need your service or not (they hadn’t considered it). One third needs it but doesn't know they need it, and one third does not need it. When totaled, approximately 70 % of Americans need what you have, will need it, or would consider it if they knew about it. That is what your retail marketing is going after.

When running retail ads, I found it important to include words like “protect” from government, taxes, lawsuits, nursing homes, and in-laws, or a combination of those. It is also important to stress you will keep the client in “control” and you will “keep it simple”. Another important factor when running retail ads is to make it about the reader, not you. Most ads I have seen start with the law firm name at the top or a general statement like estate planning services. This is a big mistake. The most prevalent part of the ad must be something relevant to the consumer's world. For example, an ad beginning with estate planning, many people would look at and glance over assuming they don't need it, while in reality they don't even know what it is. On the flip side, an ad beginning on top with protect your family, or protect from the government, or avoid nursing homes, are much more relevant to the consumer. After reading those headlines, they are much more likely to read the body and content underneath it to see how it impacts them. I typically have my law firm name at the bottom of the ad, so they have to read thru the ad to find it. That being said, your ad should not have so much copy they get lost in it. You should utilize bullet points and bolds strategically. Pictures are also important to tell a story. Chose pictures people can relate personally to.

The most critical element of retail marketing is it must have a call to action. Typically you can invite the public to a free seminar or workshop or a free consultation. In this recent economy, I have found retail marketing is actually getting a greater response than usual. The general public has a lot of concerns with the current economic condition. We have found, it is more difficult to get them to do planning, but many are in an information-seeking mode to determine if they need to be doing something they’re not. Recently, in a local newspaper, in addition to my ad, three other estate planners ran ads. I'm not sure how they made out, but we had the highest response from a retail ad in recent memory. I don't believe they did as well and here is why I believe so. All of their ads were invitations to go to their office for a consultation. Ours was a call to come to a workshop to discover the “7 Threats to their Family Security and How to Avoid Them™”. Many people who attended the workshop found it informative and empowering. We discovered that current consumers are very interested in Family and Asset Protection Planning and they are hiring us for our iPug™ Trusts. Believe it or not, the thought of going to sit with a lawyer for a personal consultation is not on most people's top ten list. In fact, I wonder if it hits their top 100. Most of them will wait until crisis. Our job, in this slow economic time, is to remind them that there is still strategic advances to doing planning without having to wait for crisis occur. A workshop is a great format to show that.

Referral Relationships. The second element to generate referrals is relationships. Relationship referrals are personal, including family members and friends, or business, including allied professionals, nursing homes, home care agencies, etc. Over the last year I noticed referrals from professional relationships have dropped off significantly. As I examined this, I discovered, like us, most of them are scrambling to save their practices, protect their relationships, and are struggling to create value for clients. The idea of referring a client to an attorney is not on their top ten list as well as most clients are crying poverty, fear, and holding on to everything they have.

Like the retail advertising, your conversations with your referral sources must also be in their perspective. Many are struggling to maintain relationships. Sitting down with them to discover ways to create value for them and their client and create a win, win, win situation is warmly received. Recently, I sat down with four different advisers whom were operating their practices from a realm of fear. After a one-hour MPS Strategy meeting, they were excited to sponsor private workshops for their clients for us to put on (one commitment to getting 50 clients to come). The success of this was because we identified the advisors pain and offered topics important to the clients (i.e., The 7 Threats™). We targeted their client base and asked the clients to "invite a friend". Instead of being overwhelmed and concerned, they saw the value in time management savings doing a group workshop which would enable them to see many of their clients in a one to two hour setting, to reestablish relationships and to meet their clients' friends and create opportunities for new business relationships. I highly recommend in this down economy, you consider discussing these types of private workshops with your referral sources.

Branding. The last and most important element in getting referrals is branding. Unfortunately, branding is a high cost and little immediate reward. Branding represents who you are in the marketplace. Currently, if you were to needed to buy a new car where would you be going in your community? The answer you just put in your head is that company that probably had the best branding. The strongest element of branding in and of itself may or may not be clients call you when needed. You know your branding is working when potential clients are talking to their financial advisors or others in the community. When your name is raised from multiple sources, it creates agreement and helps build confidence in consumer’s decision to call you. I had three clients in the last month tell me they knew me from my advertising and then checked with their advisor who also had nice things to say, and they had a friend that was happy with what we did for them. This multiple prong approach of having people think of you is ultimate success in generating an ongoing referral base.

So what can you do now? I recommend the following three things to start getting your referrals moving:

1. Consider running an ad in a newspaper periodically, or swap sheet that serves your target market. The ad should relate to the consumer’s current pain (i.e. their need to protect from government, nursing home, lawsuits, or the in-laws). It should be a call to action to come to a workshop which is less confronting than a consultation.

2. Have three Synergy, or Strategy, meetings per week with allied professionals and discover their frustrations, and identify ways you can support them. Consider doing a private workshop for them with the “invite a friend” approach.

Get out of your office. Create opportunities to speak anywhere and everywhere possible. Raise awareness, and make it about the consumers’ needs not yours.

Your Feedback is Very Important To Me

Hello Friends,

It's hard to believe that we are midway through March already. How is 2010 going for you? What have been your biggest challenges so far? Are you meeting your goals? What are your biggest areas of concern? For instance, are you finding any of the following areas particularly challenging?

• Acquiring new clients
• Marketing your firm
• Finding referral sources
• Balancing work with personal and family time
• Holding your prices

I certainly would love to hear from some of you. Feel free to leave me a comment and let me know how things are going. As always, I look forward to supporting your success.

Thanks,

Dave

If you're feeling challenged in any of these areas, it’s time to explore and discover new methods…Join us on the call on March 18th to find out more! Click here for details.

Do You Know What Your Clients Are Afraid Of?

Do You Know What Your Clients are Afraid of? Do You Know What They are Not Getting From You? Do you know why you are not getting paid the FEES you should be?

1. Find out why you MUST be using the Asset Protection Analysis

2. Find out what clients need that 99% of attorneys are NOT giving them

3. Identifying the obligatory tools to avoid Malpractice!

4. How to build profitable referral relationships to avoid becoming commoditized

5. Learn how to transition from attorney to entrepreneur in 90 Days

6. What you need to show your value in the market place…and close no less than 77% of the time.

If your pipeline is not full, it’s time to explore and discover new methods…Join us on the call on March 18th to find out more! Click here for details.