The Case for Targeting and Profiling
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Lawyers resist personal marketing planning (targeting, profiling and positioning) because they are afraid of what they will exclude by declaring a specialty, targeting a particular group or staking out a specific position. To them, words like "focus" and "target" really mean "narrow" and "exclude." Most lawyers have enjoyed the benefits of the demand for legal services exceeding its supply for virtually their entire careers. Enough business came in each year that no one worried too much what kind it was. This history of success with the (unconscious) strategy of accepting any and all business makes lawyers understandably reluctant to focus on one area, because they see only half of the equation: the peripheral business they’ll be giving up. While demand was strong, there was nothing wrong with this reactive approach. But the demand curve has changed, permanently, and increasing competition makes it very important to focus on getting as much of your business from your target market as possible. You can defend a strong position in a well-defined market. It is impossible to defend many weak positions. While you can accept business from "anybody," you can’t market to or pursue "anybody;" that’s really trying to pursue "everybody." There are too many "everybodys" out there. The richest corporations in the world are forced to select a specific segment on which to focus their marketing and sales resources. Let’s look at this more positively. If we get the amount of business we need from our target market, why care what else we may have "forfeited" by focusing so precisely? Targeting and profiling don’t mean turning our backs on clients outside our target who choose to call us with business. Nor will we refuse referrals, as long as they don’t require us to re-invent the wheel to serve them. "Accept" vs. "Pursue" Because I specialize in law firms, am I precluded from accepting a sales training engagement from an accounting firm, bank or technology company? Not at all. The key word is "accept." If one of those companies hears about me and approaches me, I’ll evaluate the opportunity and try to close it if it makes sense. But, I can’t afford to invest my limited time and money to try to get noticed and hired by these other businesses. I must channel my resources into becoming better known and preferred among law firms. Understanding--and remaining credible in--one market is about all any of us can manage. Neither you nor I should divert our limited marketing and selling time or budget chasing peripheral business, simply because none of us can afford to fund the pursuit of "everybody." Those that try end up catching "nobody." What To Do Define your goals, e.g., amount of new business origination, percentage of clients you need to upgrade, etc. Subtract from this your average annual origination for the past three years to yield your incremental origination goal, i.e., how much you need for success. Define your most attractive work, i.e., most professionally interesting, challenging and satisfying; most profitable; and most appreciated by clients. This is the work that’s worth pursuing and actually investing limited selling time for. If it isn’t what you want, you’ll just go through the motions. Estimate annual billings per client for such work. (I know. It "varies widely." Just use a median number that makes sense.) Divide your incremental goal by this figure to yield the number of new clients you need. This will be a smaller number than you might think, and will encourage you about your chances of success. You also give yourself the right to say "no." If you only have to be right eight or ten times, you don’t have to chase bad deals or participate in wired beauty contests. Profile your targets in objective terms, e.g., those companies most like your best clients, or that likely face problems you can solve. You may need some professional guidance at first, but it will quickly become second nature. Focus your proactive marketing and selling effort only within your target range. Say "no" to speaking engagements that don’t reach your target audience. Don’t write articles for publications that don’t reach your target. The Benefits of Targeting By targeting well, you will:
You’ve probably heard of the 80-20 Rule (80% of your revenue and profit comes from the top 20% of your clients). Less well known, perhaps, is the "80-20-30 Corollary", which says that 80% of the aggravation and irritation comes from the bottom 30% of your clients, whose demands far exceed their value. By targeting, not only will you increase the amount of business that you originate, but you will acquire clients that you really want. Because you will have a higher percentage of work that you love, and clients who love your work and appreciate you, you’ll both find your practice more interesting and rewarding. This mutual satisfaction will earn you additional referrals, so that each year you can increase your percentage of "A" work, shrinking your 80-20-30 percentage even more. What of those matters and clients that fall between the "A" level and the "I hope I can replace them" level? They come from numerous sources, most of which you’d be hard-pressed to identify. Will you keep getting them once you focus on the A’s? Don’t worry. They will continue just as they have throughout your career. Call them the return on your 15 years invested in being a good lawyer, writing articles, speaking, and maintaining relationships with colleagues and fellow lawyers. Many of these matters use skills outside your specialty, skills that you enjoy using occasionally and that introduce some welcome variety into your practice. Sure, over time there will be some attrition as you refocus and channel more of your marketing and selling time each year. But, whatever erosion you experience in the "miscellaneous" category will be far more than offset by your increasingly strong proactive position. Many lawyers’ current business mix is an accident of history, the result of a 50-year demand (seller’s) market. We are now in a supply (buyer’s) market. The reactive strategy of the past won’t produce the same results now, and it is naive to hope for a steady stream of favorable accidents. Follow the steps above to begin taking control of the makeup of your practice. It will simplify your life and pay big dividends. |