In a recent piece of research, Hinge Marketing and the Rain Group looked at how buyers choose their service provider in various professional service markets. They looked at over 500 sellers and 800 buyers of Business to Business professional services .Legal services was not a market they considered, but the research is nonetheless interesting and provides food for thought for lawyers considering how they engage with potential clients.
The first conclusion drawn is that the overwhelming majority of people buy on the recommendation of a friend or colleague. This is not news to most people in the legal profession, but it does underline again the importance of relationships in this market.
Know Your Competitor
A slightly less obvious finding was that 75% of the competitors identified by the buyers in the sample were not even considered to be competitors by the sellers – i.e. many firms simply did not know their competitors. This is something we have also come across with law firms, and it is unfortunately likely to become even more prevalent as new types of businesses enter the market. Even the savviest firms should be thinking very hard, not only about competing firms, but about what kind of products and services might be substitutes for their own offering.
Unsurprisingly, the most effective method of marketing was seen as personal relationships – by buyers and sellers alike. However, it seems that many sellers in professional services markets underestimate the value of education as a way of reaching clients. It also appears that firms often overestimate the role of cost as a factor in buying decisions. Although important, more buyers prioritise expertise and skills, and a similar number value an existing personal relationship. So selling on the basis of the firm’s expertise, and prioritising maintaining relationships with existing clients over seeking out new customers, should form a core part of the firm’s marketing strategy.
Becoming a Trusted Advisor
Interestingly, many buyers perceive the real value a provider brings in becoming a trusted part of their team and informing better decision making, as well as, of course, providing solutions to problems. Client loyalty seems to be most influenced by the degree to which they feel that the seller has delivered in their promise, and they are most receptive to new service offerings when they receive a personal call or visit. It also seems that many satisfied clients do not refer new business to their provider simply because they are not asked, and that most would in fact be willing to do so.
The reports contain only a few surprises, but their depth and range of coverage reinforce the point that buyers buy for their own reasons, not ours, and it does offer a timely reminder as we enter a new year of the priorities firms should be considering in their business development and marketing plans.
Paramount must be relationships, first and foremost with existing clients, and then with new prospects where possible. Service, becoming a trusted adviser, and solving clients’ problems are of crucial importance. And firms should conduct robust analyses of the markets in which they operate, and think about just where clients may opt for an alternative product, service or provider.