Is it all about price?
Comments (1) I’m writing this on the train coming back from the latest Tesco Law workshop run by Lammore Consulting Ltd. The session was attended by solicitors from a range of firms over the West Midlands and consists of a presentation by me on the Legal Services Act 2007 (aka Tesco Law) and a very stimulating session by Mark Blackmore (from Lammore) on the theory of sales and marketing.
The main concern that most delegates have is that they won’t be able to compete on price with the likes of Tesco, the Co-Op and other retail or banking giants. Mark’s session, involving a great exercise with four tubes of toothpaste (if you want to know more you’ll have to attend one of the courses), is to demonstrate that price isn’t the only issue that affects consumers. Indeed, if a price is too low, it can be just as off putting as if too high. The message is clear: lawyers are salesmen and to succeed in the future we will need to recognise and apply the “Single Sales Principle (SSP)”.
The SSP has three identifiable elements;
- Your customer’s “Compelling Need” for a product PLUS
- A “Credible Solution” from a supplier, PLUS
- “Perceived Value” as an outcome
EQUALS a sale.
It is, perhaps, easier said than done but clearly has application to the sales of professional services just as much as the sale of a product. How to implement SSP in one’s own practice? For most lawyers, the first element isn’t likely to be a problem: most legal services are distress purchases. The problem, instead, is to promote oneself at the second stage of the equation. In my view the way forward is to build one’s own reputation – one’s own brand. How you do that is a career all in itself, but social media certainly gives more people the ability to project themselves and their businesses, which is one reason why I write this blog.
But there is more to it than that. Even if as a practitioner you can build your brand, demonstrate excellence and provide a quality service, there is (in my view) still one massive piece of jigsaw missing: affordability of legal services, the need to demonstrate the final part of the equation “perceived value”. Clients want to know how much a piece of work will cost, whereas the solicitor doesn’t want to quote a fixed price unless s/he knows that it will cover all the work. Therein lies the age-old fundamental problem – how to get beyond hourly rates? Charge a percentage of compensation perhaps? It can be done in the ET and conveyancers used to charge a percentage based on the value of the house, just like estate agents still do, (and they don’t take on any risk in the transaction, unlike the solicitor). Increasingly sophisticated IT solutions that provide much routine advice can be one answer: see Tessa Shepperson’s excellent website at Landlord-Law. She provides an opportunity for both landlords and tenants to become members of her site and access documents and then, if that isn’t sufficient, they can instruct her for specific advice on their situation.
However, that still gets us back to the problem of how you price a potentially open-ended service. Will Tesco-law be able to resolve that problem? Or will they just be able to absorb more hits than a law firm? That’s no better business for them than it is for a traditional law firm. In my experience, from working at a personal injury “factory” style law firm, the bulk provision of legal services doesn’t work for everyone. People don’t shop just on price but on a whole range of factors. Will a small, specialist, law firm that offers a credible solution and perceived value be able to succeed post 2011? Yes, I believe so.
