Understanding client loyalty: it's all about listening, not selling.

• Author: Eisenstaedt, Lee H.

Client retention is the number one issue facing law firms today. Firms are trying to protect their most profitable clients from the pressures of new business challenges and various threats that weren't even on their radar screens two years ago. For example, larger competitors are going "down market" to find work, while industry concentration through mergers and acquisitions is making retaining clients even more difficult.

At the same time, clients continue to become more sophisticated and demanding. They can easily find lower-cost providers who also promise better service without sacrificing quality or taking on more risk. In today's business environment, these reasons are compelling for even the most loyal and/or smallest clients to review their current relationships with their law firms, as well as all of their other providers of professional services.

If firms are already doing client satisfaction surveys, then they are well-positioned to go to the next level: understanding the drivers of client retention. While many legal marketers may think the two are interchangeable, the two are very different. Client satisfaction involves measuring a client's experience versus its expectations. It is transaction-oriented. The drivers of client retention involve understanding why clients retain a firm in the first place and then elect to maintain that relationship over the long term. It is relationship-oriented.

By implementing a voice of the client-listening process, legal marketers will gain insights and findings necessary to retain their firms' best clients. By incorporating these insights into their firms' marketing and business development campaigns and proposals, legal marketers will be able to separate their firms from the competition, accelerate their growth, improve their profitability and increase their partner compensation.

Championing a client-listening process also offers marketing professionals a unique opportunity to increase their presence within a firm and demonstrate the value they add to it. By being the advocates and leaders of the process, marketing professionals will be viewed as more strategic and less tactical in the contributions they make to growing the business. In turn, this will result in leaders of the firm more frequently seeking out their opinions and expertise.

A Simple Prescription

Improving client retention begins with listening to clients. Not selling them something, not entertaining them, not giving them something...