15 Mar The 4 P’s of Marketing for Bankruptcy Attorneys
How to improve your product, pricing, promotions, and place
When most people think about marketing, they think about advertising, or promotional efforts. In reality, advertising is only one element of the marketing mix, or all of the elements that combine to help you understand and create value from your services and portray that value to customers in a way that differentiates yourself from your competitors.
A well-developed marketing strategy should consist of 4 major “P’s”: Product, Price, Place, and Promotion.
The first three P’s are where you create and justify real value in your services for your customer, while the fourth P is where you highlight the value in your services through your advertising efforts.
Here is an overview of the four elements of the marketing mix and how to develop an effective strategy for each one.
Product (or service)
Your service creates value for your clients. The value proposition of your services is at the heart of all your marketing efforts.
Here are some tips to develop and expand your value proposition for your services.
- Make a list of all the benefits that your services provide for your customers. This value is what will justify your prices and fuel your promotions.
- How can you enhance your services to provide more value? More convenience? Faster speed? Better results?
- What value do you offer that makes your services unique from your competitors?
- Should you specialize in a few services (Ex: Chapter 7 and 13), or become a generalist in many areas (creditor rights, foreclosure prevention, etc)?
- Are there additional services that you could provide that will compliment or strengthen your current services?
Once you have established the value of your services, you can determine a pricing strategy. Generally speaking, there are 4 main ways that you can price your services. The strategy you choose will depend on your objectives.
Your strategy should start with answers these questions:
- What does it cost you in time and resources to file a case?
- What kind of profit margin do you want to make on each case?
- How many cases do you want to file each month?
- How much work do you want to do verses having paralegals or others do it?
Your answers to these questions will help you set a base price that you feel is appropriate. Then, you can adapt this price based on the following four strategies.
- Economy – This pricing model calls for low prices and lower quality. Some firms opt for this strategy to increase market share. Since margins are lower on each case with your lower prices, you will have to file more cases to reach profit goals. Also, you may have to outsource some aspects of the work to paralegals. Lastly, you may gain a reputation as a “bankruptcy mill” that may hurt you in the long run.
- Penetration – This pricing model uses high quality and low prices. If you are a newcomer to the bankruptcy market or are just starting a law firm, this may be your best strategy to start off with. Essentially, you set your prices artificially low while you start out, and then gradually increase your prices as your firm grows. This pricing strategy is temporary, but allows you to get your foot in the door.
- Skimming – The pricing model is for low quality and high price. It is for firms that face relatively few competitors or have some sort of substantial competitive advantage. Large firms may be more tempted to try this strategy due to their size advantages. This strategy usually doesn’t succeed in the long-run due to competitors entering the market and either charging less, giving higher quality, or both.
- Premium – This pricing model is for high quality and high price. You may have to be more selective with the cases that you file to give the necessary time and attention to the few cases that you file. Your margins will be higher on each case, so you won’t have to file as many to reach profitability goals. You will be known as the high quality firm and can specialize in difficult or challenging cases.
Ideally, you will find a price that will allow you to offer good quality service at respectable margins.
Place is another way that you provide value and convenience to your customers. If your office is in a convenient location, great. If not, don’t stress too much. However, you should consider a few aspects of location to make sure that you are providing convenience to your clients.
- Is it inconvenient for clients to travel to your location? If so, consider establishing a satellite office in another part of town that you can use for appointments to meet with clients.
- When clients must come to your office, make sure that they understand how they will benefit by coming to your location. This will help them see coming to your office as a good thing and not as an inconvenience.
- Try and do as much communication as possible by phone or email. Don’t make clients come into your office unless it is absolutely necessary. Documents can be signed and faxed remotely, providing added convenience for clients.
Finally, we arrive at the aspect of marketing that most people think of when they think about marketing. Once you have clearly established value and differentiation with your product, pricing, and placement, you can now promote it through various channels.
Your promotional strategy should answer the following questions:
- What mediums will you use to communicate with my customers?
- What messages will you use in my marketing? What value propositions from my services should you use to engage customers?
- How will my marketing messages be different from my competitors’
- Once your marketing brings you leads, how will you use personal selling to convert leads into clients over time?
Marketing doesn’t have to be rocket science. It is simply the process of creating value in your services and then communicating that value to customers in such a way as to persuade them to use your services instead of your competitors’. Each of the 4 P’s can be reanalyzed periodically and improved to increase your marketing results.