CLV--- A term Law Firms should warm up to.
It is amazing how e-commerce ventures and FMCG companies have such laser focus on their CLV. Shouldn’t Law Firms do the same?
CLV or Customer Lifetime Value, is the total worth to a business of a customer over the entire period of their relationship. The e-commerce or FMCG companies do not stop after a particular customer, buys a bottle body wash or a box of cereals. They want to target that particular customer, to buy more of other products and buy them repeatedly over their lifetime. Do Law Firms exhibit the same focus towards each customer, who could be a buyer of other services, from the same Law Firm, over their lifetime?
Over the past 5 years, I have been trying to push Law Firms to focus on CLV. Imagine a young customer getting their conveyancing done through a particular Law Firm. Wouldn’t this same customer need to sell the same property in a few years? What about them needing a family lawyer in a couple of years time? What about getting their WILLS or LPA done in a few years time? What about they needing to claim from some negligence?
Imagine a customer who got his commercial lease done through a Law Firm. Wouldn’t that lease come up for renewal in a few years time, or, wouldn’t it have a rent escalation clause that kicks in after a few years, etc? Wouldn’t the Law Firms end up benefitting from all the recurring work from the same client over a period of time? It reduces the cost of acquisition for the Law Firms. Add up the sum value of all the complimentary services, if not the ancillary services, and you will realise the sum of sales value from one particular client is over ￡8k.
To the sceptics, who think this is not professional services, would you rather prefer going down under due to cashflow issues and lack of revenue? Currently, there are Law Firms going into administration due to cashflow and revenue issues. Some of them are selling off their WILL banks to realise whatever little value that WILL bank can get them. Imagine sitting on a pile of fortune, yet not realising the value.
This focus on CLV had some firms tear away from their competition and grow from strength to strength. They used every opportunity to think commercially, keeping client care at their core. One such firm finally listened to what we had been advising them with regards to CLV. We have just built the first tool for them to track and manage all their enquiries up to instructions. The next phase will be built using machine learning to automate the journey and thereafter keep the client engaged without intruding.