The article below was published in The National List of Attorneys
May 2010 Developing A Collection Practice booklet
Firm Marketing 101
By: Robert J. Hanna
Weltman, Weinberg & Reis Co., L.P.A.
So you want to develop a collection practice? Where do you start? Assuming you have the knowledge and experience to engage in this niche, one of your answers is probably “marketing”. It’s a broad term but it has a single mission and that is to attract prospects and drive their business to you.
If you look back at your Marketing 101 textbook you will see that nothing has really changed over the past 100 years. Outside of the invention of radio, television and the Internet, today you still have to manipulate the traditional four P’s of marketing and apply them to a target market.
If you want to score points fast on your marketing effort, it’s probably worth asking yourself what are you good at and can you make a living doing it. For some collections professionals it’s collateralized loans; for others it may be secured loans. Another dimension may be file balance range with the understanding some of us prefer volume-based relationships with low balances while others enjoy single high balance commercial matters involving heavy litigation.
Once you know your sweet spot and profile of the ideal buyer of your services, then how you manage the “4 P’s” marketing mix becomes an easier task and will eventually morph itself into an overall marketing strategy – a perpetual plan you have that you retune every year to meet your need’s as well as your market’s.
The next four paragraphs walk you through what makes up an effective marketing strategy.
Product: This first “P” is your service. Define what it is you are selling, and stick to your core competency. In the automobile finance market it may just be replevins. For others it may also include locating collateral, facilitating repossessions and participating in the remarketing process. Include in your product definition ancillary services such as reporting and hot-line support, if those are hot buttons for your buyer. Remember to keep it simple and delve into customized solutions in accordance with your comfort level.
Promotion: Now that your product/service has been defined, its time to tell the world that you exist and are ready to do business. This is a great opportunity to put yourself in your prospect’s shoes and figure out how they seek solutions. It could be through directories such as The National List of Attorneys. There are also trade magazines, newsletters, blogs, conferences/conventions, speaking engagements, e-mail campaigns and direct mail. What is common about all of these approaches is they represent mass marketing strategies, with your goal to obtain leads. How do you improve your response rate and maximize the return on your marketing dollars? On printed material, make sure your message is clear with not only a product definition but also the features, advantages and benefits of your service as well as your firm. On the conference front, heighten your response rate by cold calling attendees and arranging appointments to discuss their needs and your services. This networking effort will guarantee you contacts who you can further qualify for a business relationship.
Place: Often called “distribution”, this is how you deliver your service. Do you accept assignments direct from your clients and manage those relationships one-on-one? Or do you prefer acquire business through third parties who already have those relationships? An example of the latter would be an alliance with an attorney network or service provider who operates in the same target market you identified up front. There are of course pluses and minuses under each approach. Also consider geographic scope of your service and your ability to deliver without compromising on quality.
Price: The final “P” is about how you price your service. Is it contingency, flat fee, hourly or a combination of all three? Is it tiered by service level and/or volume level? Do you differentiate by state to account for local procedures and costs of doing business? If you have to discount, will it result in a win-win relationship? There are a lot of variables to consider but if you know your buyer you will probably be able to come up with one universal pricing model that meets a majority of the market’s needs.
In summary, to develop a successful, profitable collections practice one needs a marketing plan, and the above yields a framework from which you can build your own strategy. Once developed, the marketing plan is a living document that will require regular updates to reflect changes in your deliverable, market conditions and buyer expectations. Above all, keep in mind that marketing is just one of many variables in your strategic plan that you need to pay attention to. Those other variables minimally include finance, operations and compliance.
Firm marketing doesn’t have to be incredibly complicated you can use the “4 P’s” of marketing.
Product: Stick with what you are good at.
Promotion: Law lists, trade magazines, conferences/conventions, speaking engagements, e-mail campaigns and direct mail are all good options.
Place: Consider if you want to want to develop clients by one-on-one meetings or if you prefer using a third part entity.
Price: Develop a pricing strategy; options include contingency, flat fee, hourly or a combination of all three.
About the author:
Robert Hanna has been at Weltman, Weinberg & Reis Co., L.P.A. since 2003 and focuses on business development. He is responsible for business development for WWR’s third party collections, probate, bankruptcy, litigation and foreclosure services in consumer and commercial markets. He has over 25 years of experience in the outsourcing of services to the financial services industry and prior to joining WWR, he served as Vice President for Outsourcing Solutions, Inc., Senior Vice President of Providian Financial’s First Select and Senior Vice President of First Data Corp. He was born in Newark, NJ and grew up in East Brunswick, NJ, a booming town in the 60’s with easy access to New York City and the Jersey Shore. He holds a B.A. in Business Administration and Economics from Rutgers College, an M.B.A. in Marketing and Finance from Rutgers Graduate School of Management and has taken courses at Manchester Business School (U.K.), New York University, American Institute of Banking, Xerox PSS II/III and SSP, Dale Carnegie Institute, IBM Corporation and Miller Heiman Strategic Selling.
Mr. Hanna can be reached at Weltman, Weinberg & Reis Co., L.P.A. 323 W. Lakeside Ave., Ste. 200 Cleveland, OH 44113 Phone: (908) 756-7073 Fax: (614)801-2601 or via email at email@example.com