How to overcome the dynamic nature of the bankruptcy industry
As you probably know through experience, the bankruptcy market is about as consistent as a wild roller coaster at times. It is highly dynamic in many aspects, which can make it difficult to plan your marketing strategies and activities.
Here are the most common challenges facing the bankruptcy industry and how you can respond to them.
Challenge #1: Year to Year Fluctuations
Over the last 10 years, the demand for bankruptcy services has fluctuated greatly due to the new bankruptcy laws passed in 2005 and due to the Great Recession from 2008. Anytime there is a legal change or an economic fluctuation (for better or for worse), you can expect to see an increase or decrease in demand for your services.
To face this challenge, try these ideas:
- Pay close attention to the news and economic indicators, as they will give you clues as to what demand may look like in the coming months and years.
- Increase your marketing spending during recessions and decrease spending when the economy is good.
- Diversify your services towards other types of law. You may focus more on bankruptcy during peak years and focus on other legal services during good economic times.
Challenge #2: State and City Variation
The per capita demand for bankruptcy service varies greatly by state and city. This makes some areas more ideal than others for practicing bankruptcy law.
How do you handle this challenge?
- First, understand how your state and city ranks in comparison to others. Use data from the U.S. Courts or from the American Bankruptcy Institute to gauge the demand in your area.
- Second, set realistic expectations as to how many clients you can find based on the total market size in your area.
- Third, if you find yourself in a bad market, change locations to a more ideal city or try and maximize the amount of filings you can get in your area.
Challenge #3: Month to Month Variation
Similar to the retail industry, the bankruptcy industry faces substantial fluctuations in demand during different parts of the year. The peak season for bankruptcy is during the second quarter (April-June), while the slowest time is during the fourth quarter (Oct-Dec). While there isn’t a clear explanation as to why, it seems that tax returns have a large impact on high filings in the second quarter, while holidays seem to decrease the amount of filings in the fourth quarter.
This fluctuation during the year can make it hard to plan your marketing efforts.
The best way to deal with this challenge is to adjust how aggressively you market during different times of the year. Increase your budget during peak times of the year. Market in more mediums (TV, online, radio, billboards, etc) during peak times as well. This will allow you to capture the high demand and lower your marketing expense during slow times.
Challenge #4: Day of the Week Inconsistency
While this is not always true, Monday-Wednesday are generally the busiest days for leads coming in. Thursday and Friday are slower, while weekends are the slowest days of all. This can make it hard to plan time to contact leads quickly and efficiently.
To meet this challenge, consider these tips:
- Arrange your schedule (and your secretary’s) to spend more time contacting and nurturing leads during peak days and schedule your other activities accordingly.
- Set aside some time (10-20 minutes) on Saturday or Sunday to make initial contact with the few weekend leads that trickle in. Or you can contact weekend leads first thing Monday morning. Have your voicemail explain what your customer can expect if they call you on weekends.
- Be more aggressive in your marketing efforts during peak days. You may increase your spending on these days to reach out while people are most interested in finding help.
Challenge #5: Time of Day Inconsistency
Sometimes leads come in the morning; other times they come in the evening. Occasionally, they may even come in at 2AM or during other non-business hours. This can make it challenging to respond to the leads quickly.
To deal with this challenge, consider the following:
- Use a smart phone to periodically check your emails for leads throughout the day.
- Set up desktop notifications on your email platform to notify you of when new emails come in.
- Have an excellent voicemail for phone leads that explains how and when you will respond to them after they leave a message.
Challenge #6: Caliber of Leads and Clients
While most of the time leads have natural variations in how ready they are to file bankruptcy, other times there are batches of leads that are either of very high quality (have money to pay you, have urgency in filing, etc) or very low quality (can’t afford to file, price shoppers, etc). This means you may have some weeks or months that are great and others that aren’t.
This is a challenge that can’t be completely erased, since many people who need to file bankruptcy may be unemployed, unable to pay, or have other life issues that you can’t resolve. The best way to face this challenge by striving for high volumes of leads. The more leads you get, the more likely you are to find those high quality leads. If you settle for fewer leads, you may have bad batches due to the small sample size.
In summary, the bankruptcy market is always changing. Be prepared to overcome some of its changes with planning and accept the other challenges as part of doing business in this industry.