Clear about your competitive advantage? (first published in Legal Hub, July 07)
9th July 2007
A few months ago, a partner (lets call him John) walked into the marketing office waving a newspaper with an article announcing the appointment of a local competitor by one of his key contacts. “Why didn’t we know about this tender?” he boomed.
“Because XYZ Company is your contact and you have instructed the marketing department not to send anything. You wanted to send the newsletters yourself,” replied the marketing executive.
On further investigation, it transpired that John had never got around to sending any of the newsletters produced by the firm in the last two years, although he had thought about it on a number of occasions. Nor had he had any other written or phone contact with the XYZ company in that time.
Now, stuck on the wall, above his phone is an A4 laminate with the logos of his main competitors and the caption “Who did your contacts last hear from?”
The moral of this story is not just to highlight John’s failure to keep in touch, but also not to under-estimate the competition and their appetite for your clients. While you are busy focused on ‘business as usual’ they may be busy building relationships, generating awareness of their services and trying to communicate their competitive advantage to your contacts and clients.
In any competitive situation – a formal tender, informal pitch or just defending your client base – to be successful, a firm needs to position itself as better than its competition. How can you do this effectively if you do not understand your competition or your own competitive advantages?
Competitor Analysis
A review of your competitors should form part of the strategic planning process for every firm. Few firms take this very seriously and are prepared to invest in independent external research. I am never sure if this is purely because of budgetary constraints or because there is a reluctance to hear the results.
The sort of external research that might be commissioned could include asking respondents to name law firms without prompting and then asking their perceptions of named law firms. Respondents could include clients, prospects, intermediaries and the local media. This could be carried out by telephone or in focus groups.
Lawyers often have an opportunity to visit other law firms. Next time, take an objective view of their reception area to note what they do well and remember to pick up a set of brochures.
Print off the home pages of your competitors web sites and lay them out side by side on the boardroom table. Consider who has the best branding, and how the firms differentiate themselves. How do you compare?
An analysis of branding in a limited geographical market recently revealed all the leading law firms to have a predominantly blue corporate identity with all the logos set in a square or rectangle. The firm carrying out the review has now rebranded successfully with a curvaceous design and keeps well away from the blue end of the colour spectrum.
Take every opportunity to gather intelligence on competitor’s strategies through networking with intermediaries. If any of your clients use other firms, don’t be afraid to ask how you compare. If you have been unsuccessful in a tender situation, ask someone else to carry out a formal debrief on your behalf.
Try phoning all of your competitors at 8.30am or 6.30pm to see how out of hours calls are responded to. How do you compare?
The summer is a great time to carry out a review of the competition, if your marketing budget does not stretch to an external consultant. It is an ideal discrete project that can be given to an enterprising student - with many firms having the sons and daughters of partners and clients looking for work experience at this time.
Competitive Advantage
When you have a clearer view of the strategies of your competitors, you are in a much better position to identify and communicate your own competitive advantage.
Next time you refresh your SWOT analysis (strengths, weaknesses, opportunities and threats) for your firm; take a moment to think what the SWOT might be for your competitors. This can really help your thinking.
You need to know where your competitive advantages lies before you can start to exploit them. Typically they might fall within one of the following categories:
- Core skills – recognise what you are really good at. Ensure that you have a clear communications strategy for the services that you provide well, efficiently, profitably and with a high level of client satisfaction.
- Relationships – your existing relationships with clients, former clients and intermediaries should be made to work hard on your behalf.
- Experience in vertical markets sectors – is one way in which a number of firms successfully differentiate themselves.
- Brand – is undoubtedly more important now as clients and potential recruits are more brand conscious.
- Quality – where firms have invested in quality standards such as Lexel, IIP or ISO9001 they are demonstrating a greater (arguably real) commitment to quality.
- Added value - is often used as a way of differentiating firms. What do you offer over and above legal advice?
- Technology – can be used to deliver efficiencies, reduce costs and improve service. High tech clients will feel more comfortable with high tech advisers.
Marketing and business development skills – rainmakers amongst the partners, the marketing manager with all of the right media contacts, and the business development manager that ensures your tender makes the shortlist should all be recognised.
Unlike much of the legal profession, retailers and companies such as Tesco and The AA take market and competitor research very seriously. Just remember that at this very moment they may be planning how to approach to your clients.
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