Thanks to the pandemic, law firm marketing, sales, and business development (BD) efforts took a massive hit in 2020—much like other commercial functions. As the latest 2021 LexisNexis InterAction Marketing & Business Development Survey reveals, 66% of law firms found their BD and sales to be more difficult, requiring professionals to devise new strategies to win new business and retain existing clients. Interestingly, the firms that overcame challenges and found growth approached marketing differently versus the firms that found themselves in the status quo camp; i.e., those that achieved no business growth.
It’s official—marketing is of strategic importance to law firm leadership
They say every cloud has a silver lining, and perhaps the good news for marketing and BD professionals is the conclusive recognition that marketing is core to their firm’s overall strategic direction. A whopping 79.7% of law firms stated that marketing was an important piece, with 60% of high growth firms agreeing that marketing and BD leaders drive strategic outcomes in their organizations. Noteworthy here is that only 45% of firms that saw no growth last year believe the same to be true in their organization. Perhaps because no growth firms don’t necessarily have a long-term strategy (29.7%), are challenged by insufficient investment in marketing technology (21.6%), and have the wrong kind of systems that don’t support their processes (16.2%).
Digital is the way to go
Given the fully virtual business environment last year, it’s no wonder that eight out of the top 10 marketing techniques used by firms were of a digital nature, including things like websites, social media platforms, webinars, virtual events, podcasts, and video content. Interesting to note is that high growth and no growth firms used the same techniques, but the former utilized some of the methods—like webinars, virtual events, video content, and podcasts—more frequently than the latter. Clearly, the high growth firms were proactively showcasing their thought leadership, confidently participating in live events to establish relationships and build trust. Perhaps this is something for the nogrowth firms to consider?
Value of marketing metrics shone bright
An area in which high growth and no growth firms differ significantly is tracking marketing metrics. High growth firms are more strategic in their approach to marketing, continuously evolving their program, where it would appear that the slower growing firms were simply executing. To illustrate, 54.3% of high growth firms use historical data for goal setting and 42.9% determine patterns that lead to success and adjust processes accordingly, versus only 37.8% and 24.3% respectively of the no growth firms. The results showed that 77.1% of high growth firms were successful in their marketing efforts, compared to 59.5% of no growth organizations.
Predictably, law firms cite competition as their top challenge in 2020 when it came to both winning and retaining clients. In fact, no growth firms were harder hit (56.8%) by competition at retaining clients than high growth firms (37.1%). It wouldn’t be far-fetched to assume that no growth firms faced competition from their peer-group firms as well as the high growth firms (who have larger budgets, of course, but are also more agile and nimble), based on the metrics-led approach to marketing. Again, maybe a leaf to be taken out of high growth firms’ marketing handbook?
Direct correlation between CRM and tracking metrics
In turn, metrics-led marketing is more likely to be successful with the right technology tools. Firms that saw high growth (more than 20%) were four times more likely to track metrics for marketing and BD efforts. Furthermore, CRM technology users track the metrics of their marketing activities almost three times more than non-users. It’s not hard to see why! Typically, law firms store and manage marketing and BD data in the CRM system, and these applications offer rich functionality for everything from data quality management through contact management, engagement scoring and relationship intelligence, and more, making tracking metrics an intuitive and “business as usual” activity. The survey findings reinforce this view too—nearly 66.6% of law firms that did not grow don’t use a CRM system.
Marketing spend is on the up in 2021
With the year of unprecedented change that 2020 was, judiciously, firms of all sizes expect to increase their marketing spend in 2021 by an average of 15%. Breaking this down, high growth firms plan on raising their marketing spend by 38% versus 10% (still respectable) by no growth firms.
After seeing the positive impact that marketing can have on client retention rates, winning new business and firm growth, marketing heads must take the opportunity to robustly make the case for their function, restrategize, and invest in tools and approaches that have proven to deliver success in a hugely disruptive and challenging year gone by.
Do these findings resonate with you? How did your firm perform? What kind of changes did you make to your marketing and BD function? How has the pandemic changed your approach to marketing for the future? We would love to hear from you!