What Law Firms Can Learn From Tech Companies About Revenue Generation
For years, tech companies have been leading the way when it comes to creating scalable revenue engines. With many tech darlings like DocuSign, HubSpot, and Salesforce experiencing extremely fast growth and market domination, it begs the questions – what’s their secret sauce?
It turns out that the sauce isn’t so secret. Rather, the majority of tech companies that have seen tremendous success are following a formula for growth that’s considered tried and true within the technology sector.
There’s a lot that law firms can learn from tech companies about how to generate and measure revenue. Here are some of the primary strategies, tactics and metrics that are commonplace in the tech industry and how they can be adopted within law firms to drive revenue growth.
Prioritize Digital Channels
High growth tech companies tend to spend the bulk of their budget on digital marketing channels such as Google ads, social media, email marketing, and display advertising. While there may still be some budget allocated to traditional marketing channels like conferences, direct mail, and sponsorships, tech companies typically don’t over index on these.
Digital is favored among tech companies for many reasons, such as:
- Reach: exposure to a large audience, while remaining hyper-targeted on their ideal buyers
- Agility: campaigns can easily be scaled up or down depending on performance and business needs
- Measurable: gives marketers the ability to directly tie the amount spent to the amount of revenue generated.
Law firms should take a hard look at whether they’re spending enough on digital and exploring all of the benefits that digital has to offer.
Automate, Automate, Automate
Automation allows companies to do more in less time and tech companies have seen first hand the value that comes with automating their marketing campaigns. For example, after a visitor views their website that person may be automatically entered into their retargeting campaign where they see company ads on social and other web properties for the next 30 days. Or a prospect fills out a form on their website and they are automatically sent an email introducing them to the company.
Law firms should identify areas for automation that can help save their team time, offer more targeted experiences, and help scale efforts in a way that only automation can. Email sequences for new contacts where the firm shares thought leadership content they’ve created, as well as creating an ‘always-on’ retargeting campaign are both good places to start.
Focus on the Funnel
Tech companies don’t talk to all of their prospects and customers the same way. They consider what ‘funnel stage’ that person is in.
Are they just becoming aware of the company and product? If so, they’re at the top of the funnel and may not be ready for a discussion or product information. Thought leadership content or emails containing helpful industry information may be a better approach to warming up these early-stage prospects.
Vice versa, if a prospect has already had multiple conversations with the company, then tailored information and insights about their industry and the way the product solves their unique challenges would be relevant.
Law firms would benefit from mapping their marketing and BD strategy to the sales funnel so that they are delivering the right knowledge and insight, at the right time. A one size fits all marketing strategy just is not going to cut it in a world where clients expect personalized communication and for your firm to really understand their current needs and pain points.
Invest in Tech
Tech companies couldn’t do any of the above without the help of technology. Most tech companies have large ‘tech stacks’ (system of tools and software) that help them build, schedule, track, and optimize their marketing activities.
Law firms have been slow to adopt the necessary tools and software needed to create a well-oiled revenue machine. While tools like CRM and email marketing platforms should be table stakes at this point, there are a number of other solutions that can significantly help law firms drive revenue:
- Platforms to help manage social media and conduct online listening like Hootsuite
- Platforms to help monitor industry news and identify sales opportunities like Kaitongo
- Platforms to help identify the most ‘sales ready leads’ through lead scoring like Hubspot
- Platforms to make graphic design and visual content creation easier like Canva
Live by the Numbers
At tech companies it’s not enough to just ‘know your metrics’, you need to be obsessed with them. Tech marketers and sales teams use data to make decisions about nearly everything, from which markets to target, to what events to attend, to which marketing programs to roll out next. It’s not uncommon for tech companies to have their sales dashboards displayed on a big screen in the office, so teams can see the data in realtime and make decisions accordingly.
To get a handle on the basic unit economics of their business, law firms should spend time determining the following metrics:
- Customer Acquisition Costs (CAC) – how much money on average is spent acquiring customers?
- Churn Rate – annually, what percentage of clients discontinue working with your firm?
- Lifetime Value – what’s the average dollar amount that you receive from clients over the total time they spend working with your firm?
If law firms want to remain relevant, keep up with client expectations, and grow their bottom line, they should look to tech companies as a source of inspiration. Consider what solutions and programs can help strengthen your business functions and create a scalable revenue engine, like the one tech companies have created.
This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.