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5 posts from May 2006

May 31, 2006

Six facts every lawyer must know to develop new business – Fact 5

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.”

May 24, 2006

Six facts every lawyer must know to develop new business – Fact 4

The fourth fact lawyers should know to develop new business is You must plan advances. The concept of a sales “advance” comes from Neil Rackham’s SPIN Selling system, which is based on the most systemtic real world research ever conducted on the sales process. According to Rackham’s web page, “more than half the Fortune 500 train their salespeople using sales models derived from his research.”

When Rackham analyzed 35,000 sales calls over 12 years, he found that “In major account sales, fewer than 10 percent of calls actually result in an Order or a No-sale.” The other 90% of sales calls should be classified as successful only if the sales person gets an advance: “A specific action taken by either party that moves the sale forward ” such as scheduling another meeting, getting introduced to someone new, or providing a list of references. (For more, see The SPIN Selling Fieldbook, p. 42)

One big mistake that novices often make is they try to push for too much, too soon. Successful rainmakers are experts at judging what advance can realistically be achieved at any stage, and getting it. Which creates a natural progression to actually getting new business.

When a client says we should talk again, but does not specify a date or time, that is not an advance, because there is no specific action. Rackham calls this a “continuation” and considers the meeting unsuccessful. It does not mean that the sale is dead, but it does mean that you are not making progress.

Great sales people succeed because they plan every sales call, and strategize how to get the largest possible advance. Rackham’s book provides examples and guidance of how to brainstorm possible advances before a meeting, and then select the one that is likely to lead to the greatest progress. This takes effort and practice. But the ability to consistently get advances is often the difference between success and failure.

In Rainmaking Made Simple (page 100), Mark Maraia provided a slight different definition of an advance, specifically for lawyers: “An advance has three elements: (1) a commitment (2) to take action (3) in a definite time period.” For complex legal matters, the advance often involves getting a meeting with others who may be involved in making the decision.

Any lawyer who feels that she has enough meetings with potential clients, but that they are not getting far enough, would be well advised to read Maria’s chapter on how to “Avoid Random Acts of Lunch.” It explains how to prepare for every business development meeting by writing down the needs of the person you will meet, a few questions to ask, and the advance you would like to achieve.

As Rackham summed it up: “If there was just one piece of advice we could give to people to improve their selling, it would be this: Plan your calls… Do you know exactly what outcome you hope to achieve?...Plan what to ask, not what to tell.” (From the SPIN Selling Fieldbook, p. 171)

May 17, 2006

Six facts every lawyer must know to develop new business – Fact 3

The third fact that lawyers must know to develop new business sounds deceptively simple: You must listen. In The Seven Habits of Highly Effective People, Stephen Covey wrote: “If I were to summarize the single most important principle in the field of interpersonal relationships, listening is the key.” When Suzanne Lowe and Larry Bodine published a recent survey of 377 marketing professionals on “Increasing Marketing Effectiveness at Professional Firms,” one of the best metrics for tracking success was whether rainmakers consistently listened to their clients. In the book Advanced Selling Strategies (p. 133), sales guru Brian Tracy explains four reasons why “Active sincere listening leads to easier sales”: 1. Listening builds trust. In a survey of professional purchasers, the single biggest complaint was that sales people talk too much. If you show that you are interested in understanding what people really need, they are more likely to believe that you will provide it. 2. Listening lowers resistance. It helps to make customers feel relaxed and comfortable instead of tense and defensive. 3. Listening builds self-esteem. Everyone wants their views to be heard. So when you listen to a client, it shows that you respect their opinions. 4. Listening builds character and self-discipline. Hopefully, this fourth point won’t come up very often. But from time to time, you may sell to a client who is, shall we say, not overly dynamic. As they keep talking, it’s easy to start daydreaming about which type of salad you should order for lunch. But the more boring your client is, the more character you will build by listening. And the better you understand what they want, the more likely you are to get a new engagement. Why is listening so hard for many lawyers? Well, first of all, you have to talk less. Experts say that when you are building business relationships, you should spend 50% to 80% of your time listening. But when lawyers meet potential clients, many think that they need to talk quickly so they can list all the wonderful things their firm can do. This is a mistake. Listen3 The customer is a lot more interested in her own problems than in your capabilities. If she did not think you were good, you wouldn’t be meeting. So you need to devote most of your time to focusing on what she wants, needs, and feels. As the old saying goes, that’s why you have two ears, and one mouth. Great listeners don’t argue. That’s another reason many lawyers find it hard. To listen effectively, you must give up the need to be right. If you want to improve your listening, start with these five steps: 1. Establish genuine interest by asking questions that you care about. 2. Take notes. Writing down what people say shows that what they say is important, and that you are paying attention. Just put the pen down if the talk turns confidential. 3. Respond to the speaker’s nonverbal cues, and monitor your own, including eye contact, smiling, and frowning. 4. Keep people talking. Paraphrase, summarize, and restate what you hear. When you agree with people, they will think that you are smart. Especially if you don’t interrupt them or argue. 5. Come prepared with good questions. Lawyers must start by “mastering the art of the easily answered question,” as explained in Kevin Daley’s Socratic Selling. The book describes several types of non-directive probes that will help a client think through a situation without trying to push her to a particular conclusion, or distracting her. For example, draw probes keep drawing out information until the client and the lawyer are satisfied that all the important points have been covered, such as Tell me more about ____. Give me an example of ____. What else should I know about ____? Access probes allow you to obtain access to other topics without forcefully changing the subject . These non-threatening questions introduce a new topic, but stll leave the client free to take the conversation wherever she wants. For example: How does ____ fit the picture? Talk to me about your experience with _____. How do you handle _____? It sounds simple, but asking this type of question does not come naturally to me, nor to many lawyers I know, because we like to be in control. Well, clients do too. Professional sales people have an old saying that “Whoever talks the most, will enjoy the meeting the most.” If you want to build a relationship, the client should do most of the talking. For more advanced questioning techniques, see my Amazon list of the top sales and marketing books for lawyers, especially the SPIN Selling Fieldbook,and The LegalBizDev Success Kit.

May 10, 2006

Six facts every lawyer must know to develop new business - Fact 2

Last week, I introduced Fact 1 from my talk on Six Facts Every Lawyer Must Know to Develop New Business: There are many ways to sell. This week, Fact 2: You must start with current clients.

According to Harry Mills (in the Rainmaker’s Toolkit, page 95): “ Research shows:
The chances of selling to an existing client are better than 1 in 2.
The chances of selling to a lost client are 1 in 3.
The chances of successfully selling to a fresh prospect are 1 in 8.”

The exact numbers will be different for your firm, but experts agree that in every business, it’s much easier to sell to people who know you than to sell to strangers.

ALM Research and The Brand Research Company will soon release their 2006 survey of what law firms are doing to develop new business. When it comes out, I’ll post a blog describing their findings. In the meantime, I can tell you that when it comes to new business, they concluded that even now “the largest share of growth by far is from selling more of the same work to existing clients.”

One way to get started with your current clients is to offer a free meeting to learn more about the client’s business needs. In some cases, these meetings will lead directly to new engagements. For example, I heard recently from a participant in one of my hotel workshops who had used my four step process to quickly prioritize the action items that best fit his personality and his practice. He decided to offer a free meeting to a current client, to discuss a new program.

The client loved the idea that the meeting was free, and provided the name of a new contact he wanted to invite. When the lawyer called to schedule the free meeting, the new contact mentioned a litigation that was about to be assigned to a competitor. The lawyer immediately arranged a separate meeting about that work, and got the engagement. That new business came before he even got to the free meeting.

In contrast, there’s nothing easy about selling to new clients. It’s the hardest work you can do in a suit. Even among professionals who devote their lives to selling, failure rates are high. In Gallup’s data on 250,000 professionals, the bottom 25% in every sales force sell little or nothing, and actually reduce the team’s productivity by distracting valuable management time (p. 24). That’s one reason why turnover is so high in sales positions.

When lawyers try to find new clients, some will succeed and some will fail. Can anyone predict which are which? I haven’t seen proof. The lawyers who are most successful sometimes surprise me, and even themselves. They are the ones who find the fit between their personal strengths, and the firm’s business development needs.

The conclusion is obvious: when a law firm first works on increasing sales, much of the initial effort should be aimed at existing clients. What do you do when you have 100% of a client’s legal business? Just keep pushing to make them even happier.

In today’s competitive environment, other law firms would like to get to your best clients, so you will need to put in more and more effort to protect what you have. For more, see my blogs on Gerry Riskin’s concept of “Bulletproofing your crown jewel clients,” and next week’s blog on Fact 3: You must listen.

May 03, 2006

Six facts every lawyer must know to develop new business - Fact 1

This is the first in a series of posts based on my talk Six facts every lawyer must know to develop new business. Fact 1 is "There are many ways to sell."

According to traditional stereotypes, some people are born to sell, and “a good salesperson can sell anything.” That good salesperson was probably on the football team in high school, now plays golf, is fun to go out drinking with, mixes easily at networking events, and can quickly become anyone’s new best friend. For all people who do not fit this profile (including most lawyers and me), the logical implication is that we were not born to sell, so we should not waste our time trying.

But when the Gallup organization studied 250,000 sales representatives over 40 years, they found that the “sales person who could sell anything” was a myth. In fact, top producers in one industry often perform poorly in another, because different types of selling require different skills. As Benson Smith and Tony Rutigliano put it in Discover Your Sales Strengths (p. 12): “The strengths that make someone an excellent pharmaceutical salesperson are different from those required to excel in selling real estate, or jet engines, or strategic consulting.” Just as Michael Jordan found that basketball skills did not help him get to first base, a sales star in one industry may do poorly in another.

Gallup also found that each successful salesperson develops a unique selling style based upon their particular personality strengths. In their surveys, one of the items best correlated to sales success is the statement: “At work I get to do what I do best every day.” High agreement links to job satisfaction, effective performance, profitability, and customer loyalty. And the more strongly you agree with this statement, the more productive you are likely to be.

Think about the the top legal rainmakers you know. Chances are, some of them have succeeded through public speaking, some through community involvement, some by becoming active in professional groups, and some by playing golf. Each has found how to apply their personal strengths

If you buy your own copy of Smith and Rutiglian’s book, you’ll get a code you can use to take a personality test on their web site and diagnose your own top strengths. To a psychologist, the quality of the conclusions lies somewhere below what my colleagues on the BU faculty would call validity, but well above the kind of self-test you see in the Sunday newspaper. More importantly, it’s a lot of fun.

When I took the test, my top strength was responsibility. “You take psychological ownership for anything you commit to, and whether it is large or small, you feel emotionally bound to follow it through to completion. Your good name depends on it.” (p. 235) This is not a surprise to anyone who knows me, but I like the way it sounds. If you take the test, you may sound even better, since there are 34 “signature strengths” and they cover the range from Activator to Adaptability and Competition to Connectedness. In this test, there are no weaknesses.

The most important point for lawyers is that everyone can sell. You just need to find the tactics that fit your clients and your personality.

Next week, Fact 2: You must start with current clients.