We hear it time and again: clients want more for less.
Efficiency, productivity, innovation. Increased value on discounted services. Your firm is working overtime to please clients and meet their greater demands at the same time. But how can you know if what you’re doing is putting you ahead of the competition?
Why success can only be measured against the market
Here’s the reality: your firm is not the only one that is continuously improving. Today’s professional services market is hypercompetitive in which all firms are upping their games to increase client value.
Beaton data confirms this.
In 2013, 20 per cent of law firm clients rated their firms with an excellent score (nine or 10 out of 10) in the annual client feedback data collection used to judge the Client Choice Awards. Almost a decade on, in 2022, this has jumped to 32 per cent of clients rating their firms with an excellent score.
Based on this data, if your firm’s goal is to grow market share in the current environment; you need to be improving in clients’ eyes at a faster rate than competitors.
“Understanding the environment you operate in plays a key role in your success,” says Country Managing Partner at DLA Piper NZ, Laura Scampion.
DLA Piper NZ won the 2022 Client Choice Award for Most Innovative Law & Related Services Firm, and was named a finalist in two other categories including Best Law & Related Services Firm ($30m-$50m revenue) and Best CX Firm: Law & Related Services. Scampion says the firm owes its success to collecting feedback, measuring it against competing firms – and acting on it.
“We have multiple ways to collect feedback and data, measuring our performance against competitors with a set of consistent key metrics,” she continues.
“We always keep an eye on what is happening in the market and re-assess on a regular basis.”
How competitor benchmarking can help
Imagine you’re racing a Formula One car, and you accelerate from 100km/h to 150km/h. Sure, you’re moving faster – and that’s an improvement. But if the rest of the field has cranked up its speed to 180km/h, you’ll be falling behind anyway.
In a hypercompetitive market, if you are not improving you are falling behind.
Analysing your own firm’s client feedback data is useful for self-improvement. But measuring against the rest of the field is the only way to winning new clients and growing profits.
Competitor benchmarking measures your “acceleration” in two ways: it will identify strength areas in which your firm performs better than competitors and can invest in them. On the flipside, it will notify you of areas where your firm is underperforming and requires determined action. The combination of these two factors enables you to not only improve your service offerings but improve faster than competitors.
Here’s a real example from a firm that came to Beaton to benchmark its progress against competitors.
Firm X (de-identified for client privacy) in the chart below started on par with industry average for its client feedback scores in 2013. However, after benchmarking that feedback against the market, it identified areas for improvement and began accelerating that improvement in key areas. Beaton’s most recent data shows these efforts continue to pay off with Firm X having 50 per cent more clients scoring them a 9 or 10 out of 10 for overall client service (i.e. extremely satisfied) compared to the legal profession average.
Further to this, 42 per cent of this Firm X’s clients said they were prepared to pay more for its services. That compares to 33 per cent in other firms’ clients. Firm X also enjoys a Net Promoter Score (known as NPS; a score of how likely clients are to recommend a firm’s service to others) of +32, where the industry average is +24. All great scores on their own but even better when compared to the profession average.
Knowing is better than not knowing
Mike Mortlock, Managing Director of MCG Quantity Surveyors, emphasises how competitor benchmarking is becoming increasingly important as firms arm themselves with innovative new tools to compete. If you operate in a vacuum, he warns, clients may vote on your lack of improvement with their feet – and chequebooks.
“Sometimes a significant investment is required to ensure that the service provided to ensure that the service provided, and the experience of the client is world class. Outstanding customer service will lead to higher retention, greater referrals, and word of mouth benefits,” Mortlock says.
Overall, firms with high levels of satisfaction tend to find their way to the top of the industry and the financial returns tend to follow.
Dr Brett Lunn, the Managing Partner of FB Rice, a large intellectual property firm that won three categories in the 2022 Client Choice Awards, agrees.
“Without client feedback, you have a very internal view of the world,” he says.
“It is a partnership – we want our clients to succeed and they want us to succeed. Receiving feedback from our clients is an indicator as to what is important to them and how we can change to meet their needs and better service our clients across the board.”
To find out more about Beaton’s benchmarking products and how they can benefit your organisation please visit our Competitor benchmarking page or contact us to discuss your options with a Beaton partner.