Before embarking on a programme of marketing, your firm must first assess where it is now, what has been done in the past and what it needs to do in the future to achieve its objectives.
Conducting a basic marketing function audit
A basic marketing function audit will help your firm’s marketing activities to become more productive, efficient and effective, resulting in improved client acquisition, stronger client retention and a corresponding rise in profit.
The output of the audit is a SWOT analysis (strengths, weaknesses, opportunities and threats), which will provide you with vital knowledge and understanding of your firm’s current situation. This will be fundamental when it comes to devising a marketing plan.
The outcome of your marketing function audit will be:
- Determine what your organisation is currently doing or has done
- Evaluate what is being done – is it working?
Prior to conducting a basic marketing function audit, think generally about your firm and its approach to marketing:
- Does your firm have business or marketing objectives? What are your objectives? Are they are currently being achieved (if not why not?)
- What do you consider to be your firm’s strengths over your competition? Do you have great client service? Best local legal minds? Best location?
- Is your local or national market share increasing or decreasing? Are you getting more or less local clients than previous years? Why do you think this is?
- What are your firm’s key competencies and skills e.g. your people, facilities, location, brand?
- Does your organisation have a culture and vision?
- What are the range of legal services offered by your firm? Is it a balance between business legal services and personal legal services?
- What is the level of innovation within your firm? Is your firm good at developing new ideas? Are you noted for doing things differently?
- What is your firm’s relationships with referral sources, intermediaries, strategic partners and suppliers? Does your firm proactively seek new relationships?
Conducting the audit
The best way to complete a marketing function audit is to use the 4Ps of marketing as a framework.
Consider the services you offer under each of the following headings and consider the following questions. (there may be others- this is not an exhaustive list). The point of this exercise is that by asking some basic fundamental questions about how you operate will highlight a lot of strengths, weaknesses, opportunities and threats.
To discover the information you require, answer these questions. It is likely that you wont know the answer to many of them so you would need to get assistance from Partners or senior management.
Product (and services)
- Does your firm have objectives for each of the legal service lines it offers? Are they financial objections (increase profit by £x) or more general (increase client base by x%)?
- What are your firm’s service line objectives?
- Are they still appropriate? Do your objectives need updating? Where they devised a long time ago?
- Should the number of service lines be increased or decreased? Which services might be phased out? Which services could be added? Are some service lines unprofitable?
- What do clients know and think about your firm (service quality, service benefits and features, the firm’s brand)?
- Do existing clients know about all of your firm’s legal services, or just those that they have purchased?
- What are the principal features of your firm’s service lines? Have these been translated into benefits?
- Does your promotional literature emphasise these benefits?
- What do your existing clients know and think about your competitors?
- What areas of your firm’s service and brand need improvement?
- Have there been any major technological changes over the past 5 years that affect your service lines? (e.g. mobile purchasing)
- Do your firm’s services incorporate these technological changes?
- Is there scope to develop some unique aspect in your service offering that will differentiate you favourably from your competitors?
Price
- Does your firm have pricing objectives or strategies? How are your prices set?
- What are the pricing strategies and objectives?
- To what extent are prices set on cost, demand and competitive criteria?
- Do clients see your firm’s prices as being in line with the value of its offer?
- What does management know of competitors’ prices?
- Will your organisation’s pricing cover the cost of new marketing activities?
- Do current market conditions demand greater price flexibility? Are clients demanding lower prices? Are they asking for discounts?
- What discount structure do you and your competitors operate?
- Are any of your firm’s service lines loss leaders?
- Do loss leading service work?
- What steps could you take to improve negotiation skills?
Place
- How do people access your services – high street? Website?
- Should your firm consider offering new ways for accessing your services?
- Can you develop strategic alliances through referral sources, intermediaries, affinity partners?
- Are you able to sell through intermediaries?
- What should the terms of any alliances be?
- Are your firm’s services capable of being franchised?
- What benefits would you be able to offer a franchiser?
Promotion
- Does your firm have marketing communication objectives? If so, are they being achieved?
- Is too much or too little being spent on marketing communications?
- What areas of marketing are being more or less cost effective?
- What do clients think about the quality of your firm’s marketing communications?
- How competent is each member of the marketing team?
- Are you getting value for money from your marketing agencies?
- Is the sales promotion budget delivering a return?
- Which promotional tools are generating the highest return?
- Is your firm making appropriate use of digital and marketing communication techniques?
- What are the sales force’s objectives?
- Is the sales force large enough to accomplish the firm’s objectives?
- Is the sales force organised along the proper principles of specialisation (territory, market, product)?
- Do you cross sell adequately?
- What constraints militate against cross selling?
Which of the following marketing methods have been used in the past, are being currently used, have been considered or have been rejected? Consider using a table like the one below and complete by ticking marketing methods your organisation has used in past and those you may consider using in the future.
The point of considering a wide range of issues, covering both internal and external factors, is that hopefully from the answers and their relationship with each other will emerge a series of marketing actions that will encourage initiatives and a greater use of the existing resources. Many organisations will find that they can identify resources that will no longer be required, and others that will need to be acquired.
Using the information
Good practice is to use the information you have acquired from the marketing function audit and translate it into a model such as SWOT. SWOT covers the Strengths, Weaknesses, Opportunities and Threats to your organisation.
What is a SWOT?
A SWOT is a simple means to capture information so you can do the analysis later. The SWOT analysis begins by collecting information about your organisation and ends with decisions based on an interpretation of the information summarised in the SWOT matrix (see below).
What’s more, the SWOT analysis is a useful way of drawing together analyses of a law firm’s external environment― and the internal environment.
Conducting your SWOT
There are two elements:
- An internal analysis of your firm to uncover particular strengths and weaknesses
- An external analysis of opportunities and threats for your firm
Strengths and weaknesses are internal to the organisation and are controllable. Conversely, opportunities and threats are uncontrollable external forces that act upon the situation.
- Strengths are positive attributes internal to the firm or situation that are within your control. For example, top 30 law firm Hill Dickinson owns and manages the anti-fraud database ‘Netfoil’. As a result of this internal strength, insurance companies utilise Hill Dickinson’s fraud legal services as they see it as a clear competitive offering.
- Weaknesses are also internal factors within your control that may impede your ability to meet your objectives. For example, weak finances contributed to the decline of large law firms Halliwells and Cobbetts.
- Opportunities are external factors that the organisation should (or could) develop. For example, part 5 of the Legal Services Act 2007 which permits ABSs to provide legal services has created many opportunities for law firms, such as Irwin Mitchell, to receive external financial investment.
- Threats are external factors beyond your control that could place the organisation at risk. For example, the economic downturn has had a severe effect on conveyancers as the market for house purchases reduced dramatically.
Ideally, in a group or workshop, brainstorm each category and capture the strengths, weaknesses, opportunities, and threats pertinent to your firm. Aim to only include key points and make sure these are backed up with evidence―but don’t be too rigid.
Don’t spend too much time capturing this information and don’t over analyse. As with all brainstorming exercises the aim is to capture ideas pertinent to the current business situation.
Finally, highlight the most important issues and then rank them in order of importance.
Weaknesses (Internal)
Examples include:
- Lack of marketing budget
- Poor marketing data management
- No unique selling point
- Poor website & online ability
- Few competitive advantages
Strengths (Internal)
Examples include:
- Your organisation’s reputation
- Good price/quality service
- Expertise
- Referral levels from partners
- Client retention levels
- Quality of team/people
- Client acquisition conversion
- Strong database
- Good location
Threats (External)
Examples include:
- Economic downturn
- Low margins from services
- Increased competitor levels
- Legal aid restrictions
Opportunities (External)
Examples include:
- Vulnerable competitors
- Personal injury referral fee ban (an opportunity?)
- Increasing market demand
This analysis will form the basis of the ‘current situation’ element of your marketing plan.
The output of your organisation’s SWOT analysis is not simply a matrix or grid but rather a concise report containing clear goals and activities that will form the basis of your marketing plan.
Remember
A basic marketing function audit will help improve the effectiveness and impact of your firm’s marketing activities.
The outcome of your marketing function audit will be:
- Determine what your organisation is currently doing or has done
- Evaluate what is being done – is it working?
- Recommend what should be done in the future
Good practice is to use the information you have acquired from the marketing function audit and translate it into a model such as a SWOT analysis (strengths, weaknesses, opportunities and threats).
SWOT analysis is a concise report containing clear goals and activities that will form the basis of your marketing plan.
