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Are You Leaving Money on the Table? · Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love

• 0:03
  Hello, I'm Davina Frederick. And I'd like to welcome you to the
• 0:06
  wealthy woman lawyer podcast. If you've been a fan for a while
• 0:09
  now, thank you. We appreciate each and every one of you. If
• 0:14
  you're new to the wealthy woman, lawyer podcast,
• 0:16
  welcome. I'm so glad you're here. The wealthy woman lawyer
• 0:19
  podcast is sponsored by wealthy women lawyer, a company that
• 0:23
  helps women law firm owners scale their law firm businesses
• 0:26
  to and through a million dollars in gross annual revenue with
• 0:30
  total ease, so they can fully fund and still have time to
• 0:34
  enjoy the lifestyle of their dreams. If that sounds like
• 0:37
  something you'd like to do, they come hang out with us in our
• 0:41
  Facebook community, wealthy woman lawyer or you can follow
• 0:44
  us on Instagram at wealthy woman lawyer. So today's topic was
• 0:49
  inspired by a conversation I was having with some of the members
• 0:53
  of the wealthy woman lawyer the community about key performance
• 0:56
  indicators or KPIs, as we call them. One important performance
• 1:01
  indicator in your law firm business is the cost to acquire
• 1:04
  a new client? In other words, how much does it cost you on
• 1:08
  average to acquire a new client. And a lot of people are get
• 1:12
  really confused about how to work through this calculation.
• 1:17
  Well, there's a really simple way to calculate this. And that
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  is to add up all you spend on marketing, all you spend on
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  marketing last year, and then divide by the number of new
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  clients you brought in during that same time period. So for
• 1:31
  instance, let's say you spent $50,000, on marketing and
• 1:34
  advertising your law firm business in 2021. Perhaps you
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  paid someone to create content for you on social media, maybe
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  you tried out Facebook advertising or your aunt's
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  Google ads, it could be that you had a professional photographer,
• 1:48
  take photos of your team. So you could use that on your website
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  and in your marketing. Whatever you invested in branding,
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  marketing, advertising, speaking engagements, webinar creation,
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  add all of it up, you should have a line item in your Profit
• 2:05
  and Loss report for advertising and marketing that provides this
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  total if you don't, that's a whole nother discussion for
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  another day. But we need to get a bookkeeper for you providing
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  that information, right. So now let's say you acquired 100. New
• 2:22
  matters last year, we're going to take and divide that 100 into
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  the $50,000 you spend on advertising and marketing. And
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  we'll see that your cost to acquire a new client is about
• 2:33
  $500 per new client, if the average value per matter is
• 2:39
  let's say 2500. So let's say you only bring in on average 2500
• 2:44
  For every each one of your cases, and it cost you $500 To
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  acquire HD matter, you can see where there can be a problem
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  with this over time you are it's costing you way too much to to
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  acquire that client if all you're charging him is $2,500.
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  However, if it costs you $500 To acquire a new client and your
• 3:06
  average value per matter is say $30,000, it might be well worth
• 3:11
  it for you to pay $500 to acquire that new business,
• 3:16
  right? Of course, there are a couple things that can skew
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  these numbers that are sort of out, we've left out of this
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  calculation, and that you may want to take into consideration.
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  So number one is the calculation doesn't take into account the
• 3:30
  amount of time you personally invested in marketing. So you in
• 3:36
  your marketing and advertising, if you have a team member who's
• 3:39
  devoted to marketing, that costs can show under your marketing
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  and advertising. Or you might have it listed as a professional
• 3:47
  service provider. So that might be like a graphic designer you
• 3:52
  have on contract or whatever, that you that's an easy way to
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  add that hard cost into that. Okay, so you would just simply
• 4:00
  add whatever you're paying the graphic designer on top of the
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  other hard costs, right? If it's not already calculated there,
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  but the time you personally invested we often forget about
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  that. So let's say you do that at a rate of $400 an hour,
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  right, your your time is worth $400. Okay. So if you add up all
• 4:20
  the time you spent on marketing, and then you add that to your
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  heart costs. Now you can see where the cost to acquire a
• 4:26
  client figure of $500 may not be the complete story. So when
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  you're when you're calculating this KPI, you really want to
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  think about the true cost of a thing, not just the hard costs
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  that we're seeing there. That doesn't mean that I'm advising
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  you to take yourself out of your marketing. If we need to take
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  photos of you if you need to create some videos, batch those
• 4:51
  videos and create them that certainly can be important. You
• 4:55
  also might consider having other team members involved in that
• 4:58
  process as well. So So that cost could go down. Or you might
• 5:02
  consider investing more in, let's say, Google advertising.
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  Because while at first blush, Google advertising may seem more
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  expensive, it may be less expensive if you don't have to
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  put your time cost calculation in there. Okay? Also, number
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  two, we have not yet considered the lifetime value of a client,
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  not only in what they invest in working with your law firm over
• 5:27
  time, but also the value of their referrals. So this may be
• 5:31
  harder to calculate, just like calculating your time. But it
• 5:35
  can be done if you haven't accumulated historical data that
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  you can reference, right. So in fact, in your accounting
• 5:43
  software, you might be able to pull report income by customer.
• 5:48
  Okay, I know in QuickBooks, you can do that. That'll tell you
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  exactly what each client has spent with you for any given
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  period of time. tracking referrals is a whole other
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  animal and one we will get into today, because there's something
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  more important I want to share with you in the limited amount
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  of time that we have.
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  Did you know According to Harvard Business Review,
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  acquiring new customers for your business is anywhere from five
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  to 2525 times more costly than retaining an existing one. Not
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  only that, they're 60 to 75% success selling rate to
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  customers who already have you that you already have while five
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  to 20% success selling rate to the new prospect. So reselling
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  services to your existing clients, people have already had
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  a chance to work with you and have a great experience with you
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  is much much easier than trying to sell to a brand new prospect.
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  So instinctively, you probably already know that it's easier to
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  sell to someone who's already bought your services services
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  before. Most of us may have even heard this type of statistic
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  before. But when was the last time you thought about how you
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  can do that more effectively in your law firm business. If you
• 7:14
  haven't given it some thought, then I promise you, you are
• 7:18
  leaving money on the table. So here's how I've seen law firm
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  owners do just that leave money on the table by not giving
• 7:30
  thought to their current clients. Number one, is they
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  neglect to set up a marketing system that retargets clients,
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  once their current matter is complete, something that softly
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  reminds them that you're here for them for life and happy to
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  serve other needs, they may come up that may come up in their
• 7:50
  lives, or to serve the needs of family members and friends, you
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  may think you're in one of those practice areas where it's a one
• 7:58
  time deal one, maybe they're going to get divorced, and it's
• 8:01
  only gonna be one time. But that's not really what
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  statistics bear out. And also, there may be modifications and
• 8:11
  things like that in the future. So you want to make sure that
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  you set up a marketing system that retargets clients once
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  you've closed their case out and just kind of keeps that
• 8:20
  relationship that you've worked so hard to build with them go
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  away because you definitely can get increase their lifetime
• 8:29
  value with you if you do that. Number two is failed to set up a
• 8:34
  tickler system to remind clients when something you know is going
• 8:38
  to come up in the future is about to occur. So perhaps it's
• 8:41
  been three years since they did their estate planning a lot can
• 8:45
  happen in three years. Now maybe time to reach out to them to see
• 8:49
  if they need to revisit their estate plan. Perhaps you've
• 8:53
  helped an entrepreneur trademark their brand or form a company
• 9:00
  you know, what would it be like if to reach out every year with
• 9:03
  a check in to see if they've had any new business ideas or
• 9:08
  they've expanded their current business which could raise new
• 9:10
  legal issues and needs. So think through your your own clients in
• 9:15
  your practice areas and play futurist for a minute. It's
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  really fun to play futurist, right. I've always wanted to
• 9:20
  have a business card that says futurist Divina Frederick
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  futurist on it. Alright, number three, treat clients
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  disrespected disrespectfully, once you've acquired them. Now,
• 9:31
  this is kind of my pet peeve. It drives me absolutely crazy. This
• 9:36
  often comes up in the form of making clients feel like you are
• 9:40
  a very important person. You're very busy and you're very
• 9:43
  important, and they are bothering you when they have a
• 9:46
  question or they need clarification. Yes, you need
• 9:49
  boundaries as professional don't get me wrong. I know that you
• 9:52
  need boundaries. But I want you to remember the time you want to
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  clients, new clients so badly You were hungry you want to new
• 10:01
  clients, you were worried about whether they were going to keep
• 10:04
  coming in, would you ever be able to get enough to build a
• 10:07
  nice referral network? So now that they're here, consider how
• 10:11
  are you treating them? How are you treating them? Are you
• 10:14
  arrogant? Are you letting your ego lead the way? Do you feel
• 10:19
  like that they should be feel lucky that they have you. There
• 10:25
  are numerous ways you can make your client feel valued and
• 10:29
  important without sacrificing your personal and professional
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  boundaries. condescending to them. Training your team to
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  condescend to them is the surest way not only to lose them, but
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  to damage your firm's reputation. As my Angelo
• 10:44
  famously said, I've learned that people will forget what you
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  said, people will forget what you did, but people will never
• 10:51
  forget how you made them feel. So if you have not got a system
• 10:58
  set up in your law, firm business, and a culture where
• 11:01
  you have trained your team, to make people who your clients
• 11:06
  feel important and valued and like you appreciate them, then I
• 11:11
  would really recommend you do some work here because this will
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  be more damaging to your business in the long run than
• 11:17
  anything. That before us forget to say thank you to your clients
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  kind of following along that same vein, there are 1.3 million
• 11:26
  more than 1.3 million lawyers in the United States alone. They
• 11:31
  did not have to choose you and yet they did. When was the last
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  time you thank them for being your client. And how many ways
• 11:37
  have you thank them? Did you put it on your invoice, but never
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  say it to their face? Because as someone who has received
• 11:46
  invoices with thank you on it, well, that's really nice. But
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  it's even nicer when somebody says to your face, I really
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  appreciate you and what and that you chose us. If you think
• 11:58
  showing appreciation for your clients is too much work. That
• 12:01
  is because you haven't learned how to incorporate appreciation,
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  engagement and relationship building in your law firm
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  culture and in your systems. And the wealthy woman lawyer league
• 12:15
  that's one of the skills we teach our women law firm on our
• 12:18
  clients. If you were a woman, law firm owner, and you're
• 12:21
  considering joining the wealthy woman lawyer League, the wealthy
• 12:24
  woman lawyer League is a coach led mastermind community
• 12:28
  exclusively for women law firm owners who are ready to scale
• 12:32
  their offer businesses to and through a million dollars with
• 12:35
  total ease and learn the skills they need to do so. You can find
• 12:40
  out more by visiting www dot wealthy woman
• 12:44
  lawyer.com/league/so. There's two brackets around the word
• 12:49
  League. The link is in the show notes excuse me, the link is in
• 12:54
  the show notes. So that is a wrap for this episode of the
• 12:58
  wealthy woman lawyer podcast. I hope you've enjoyed it. If so,
• 13:02
  and you're listening on Apple podcasts, please leave me a
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  review I still appreciate you for doing so. Apple loves it.
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  share this episode with other friends. I I love to share
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  podcast episodes it's a great way to add value with my
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  clients. I will often listen to a podcast episode and I will
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• 13:49
  thanks again for being here and being a part of the wealthy
• 13:52
  woman lawyer community. We really appreciate you I really
• 13:56
  appreciate you