The fifth fact lawyers must know to develop new business is that “selling is a numbers game.”
New life insurance agents are often taught the “100/ 10/ 3 formula” – you must approach 100 people to get 10 appointments and 3 customers. The exact numbers will be different for lawyers, but in any kind of selling you must approach a large number of prospects in order to get a small number of sales.
In his book 101 Marketing Strategies for Accounting, Law, Consulting, and Professional Services Firms, Troy Waugh talks about the need to “succeed by failing more.” “All advertising, public relations and direct mail programs have failure rates (nonresponse) that exceed ninety-five percent. But the one to five percent success can create excellent leads and pay for all your efforts.” (page 227).
That’s one of the reasons that I often say that finding new clients is the hardest work you can do in a suit. It takes an enormous amount of persistence, and the ability to shrug off rejection, day after day.
It also takes time to build relationships. When Don Schrello analyzed data on face to face selling data from several sources, he found that 81% of the time, sales professionals require at least 5 face to face meetings to close a sale. And Neil Rackham’s data on major account sales are even more daunting: “fewer than 10 percent of calls actually result in a [decision of] an Order or No Sale.” (p. 42)
Lawyers can think of the process of building client relationships as a five stage “sales cycle”:
Stage 1: Identify prospects - Build a list of people and organizations who may need the legal services you provide.
Stage 2: Qualify prospects – Improve the list by focusing your time on the people who are most likely to want to work with your firm, and make a decision within a reasonable period of time. (“Will they buy? Will they buy now? Will they buy from me?”)
Stage 3: Get advances – Build the relationship step by step.
Stage 4: Obtain engagements – Actually get the business.
Stage 5: Create raving fans – Remember that selling does not end when you sign a new client. In fact, the best part is begins after you obtain the first engagement, and begin thinking about the second one. This requires providing exceptional service to turn clients into what Ken Blanchard calls raving fans.
Professional sales organization collect data on the number of meetings each sales person holds every week, the average number of prospects they need to contact for each sale, the length of a typical sales cycle, and much more. This enables them to plan and track the effort needed to produce the desired number of sales next year.
CRM (customer relationship management) software systems such as LexisNexis InterAction and ACT can track this information. They only work when firms succeed in motivating rainmakers to constantly update data about all the people they meet with. Otherwise, it’s garbage in, garbage out. But that’s a discussion for another day. Today’s main conclusion is that, as Mike Bosworth put it in Solution Selling (page 83): “Sales always has been and always will be a numbers game – no matter how good you become, not everyone will buy from you.”