Avoiding the crossselling sandpits

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This article, discussing effective cross-selling
in law firms, first appeared in Managing Partner.

It is reproduced by kind permission.
Mungo Dunnett Associates 11 Polstead Road, Oxford
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Avoiding the
September 2004
cross-selling sandpits
BY MUNGO DUNNETT
further fees. The more advanced IT packages are
delivering a full range of Customer Relationship
Management (or CRM) benefits, covering all of the
areas mentioned. But the same approach can be
applied, at a more modest level, by a simple
Microsoft Access database, with
Cross-selling is an area where success is much m
ore elusive than it appears, and the risks of
damaging your business name are dangerously high
links to a standard accounting package such as S
age. The theory is fine and it also works, t
o the benefit of many other business sectors.
But you need to be careful. Cross-selling and
the whole issue managing customers through the
use of IT is an area where success is much more
elusive than it appears, and the risks of
damaging your business name are dangerously high.
Of course, one of the real problems is that
selling and establishing any form of rapport
with customers is not really anything to do
with IT at all its about people. But not only
does IT become the tail that wags the dog, but
even the IT itself is frequently approached
wrongly. It happens in a number of ways.
How not to buy the IT system   Most often, the
re simply isnt enough clarity of thought before
the system is bought. Typically, there would
appear to be a number of sound reasons for making
the
Some of the most disastrous attempts to
commercialise UK business in the last decade have
come about through the simplest notion. Because
of the concept that relationships help
businesses sell, working practices have been
altered, expensive IT systems have been brought
in and the relationships have in numerous
instances disappeared under a landslide of
misconceived and incompetently managed
cross-selling. I spend much of my time in the
financial services sector, where some staggering
costs have been expended on Customer Relationship
Management in the name of cost efficiency and
revenue generation. New arrivals in the UK T
he same practices are now beginning to appear in
the UK law sector, as law firms adopt some of the
management practices of their U.S. counterparts,
and of other professional service sectors in the
UK. One of the most notable new arrivals is the
concept of managing by database the notion
that your clients, their history, recent business
and future prospects can all be loaded onto a
PC-based system and then analysed in order to
identify trends within your own firms
activities, or specific opportunities within your
own client base. In theory, it offers all sorts
of efficiencies, through centralising all known
client information (from personal data to
billings) on a formalised basis making this
easily accessible allowing analysis of trends,
profitability and underlying business efficiency
and generating targets either business sectors,
or specific clients for
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investment for instance, establishing the
staffing cost of client business has proved
exhausting, but cannot be easily loaded against
the billing system to allow actual profit to be
identified. Or separate work for the same client
has become separated into separate parts of the
accounting system, with no proper overview
possible or there is a growing sense of unease
at the firms increasing dependence on a given
type of work, but without any easy way of
Make sure that you need the new IT. That you re
ally need it, and that the old one cant simply
be used more intelligently, and the data inputted
and extracted more cleverly confirming this or
it is realised that sensible approaches to
existing or past clients are hugely hampered by
the lack of available information on their past
business. All of these issues could be addressed
by an upgraded IT system created with client
tracking in mind. First rule of thumb Howeve
r, no matter how brilliant your chosen IT system,
if you dont give your full consideration to how
the firm is going to use it, you will be throwing
your money away. Heres the first rule of thumb.
Make sure that you need the new IT. That you
really need it, and that the old one cant simply
be used more intelligently, and the data inputted
and extracted more cleverly. Its amazing how
often the new system is expected to right the
wrongs of the entire firm. If you are not
thinking sensibly about your IT needs, and why
your IT is not delivering the value it might, you
will simply spend money on a shiny new system
that is beset by all the old problems, but merely
spins them around faster. Before you open
your chequebook, therefore, draw up a painstaking
list of precisely what has gone wrong that is
eminently fixable, and what really does require a
new system. And consider precisely what
functionality you want. It generally costs a
fortune to customise and if your staff dont
understand what the fancy gadgetry does, your
money will again be largely wasted. Ill talk a
little about the functionality itself later on.
Internal resistance Heres a second rule of t
humb that might scare you. It is generally
recommended that companies installing information
systems spend an additional 25-30 of the cost of
the system in making sure that people understand
what it is there for, and how they are supposed
to use it. Never underestimate the power of the
sullen staff member to dismember your IT
processes. If views are not sought and listened
to, if training is not comprehensive (and as much
fun as Any client-facing environment that has d
epended on a degree of personal latitude and
initiative and thats a fair summary of the
laissez-faire sales practices permeating law
firms will resent the supervisory element
possible), and if the IT is not positioned as a
positive benefit in your firms working life, the
system will expire quietly. Internal resistanc
e to cross-selling IT systems can be
astonishingly powerful. People dont like the
intrusion. Any client-facing environment that has
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depended on a degree of personal latitude and
initiative and thats a fair summary of the
laissez-faire sales practices permeating law
firms will resent the supervisory element.
Even where there seems eminently good sense about
the new identification of sales opportunities,
the sub-text is new and somewhat threatening
this is work that now has to be done its
People buy when they get these specific messages
not big generic promises, woolly background
credentials or menu-style lists of your areas of
expertise defined, explicit and monitored. Whi
lst the senior partners will rightly love the
close targeting that a good IT system will bring,
for the recipient this is a new and usually
unwelcome scrutiny of their working practices.
Using the data properly   It is easy to lose s
ight of the fundamentals in client management.
People buy when they are impressed by the firm,
believe that you are capable of delivering a
valuable service to suit their needs, and that
you truly understand what those needs and
preferences are. People buy when they get these
specific messages not big generic promises,
woolly background credentials or menu-style lists
of your areas of expertise. In order to deliver
these messages (in whatever format you prefer
advertising, letters, phone calls, emails all
will work if they are specific) you need to
assemble the information. This involves a num
ber of simple steps. First, determine whether
the firm actually wants (and can profit from)
this type of business. All too frequently this
initial filter is missed in a rush of business
developing enthusiasm. Secondly, assemble the
available information about the client. This
will be a combination of previous billings and
work summaries, notes from conversations, and
ideas for future opportunities. Crucially, it
will depend on intelligent reflection on all of
these things, to consider what the client is most
likely to want, based on where they (or their
business) is going. The final aspect is merely
the packaging the sensitive articulation of your
firms proposal, couched in terms that the client
will recognise as being specific, and specially
created, just for them. All of this depends on
data. The careful and comprehensive pooling of
known information into a single accessible place
the establishing of profit margins, and therefore
the selection of priority clients the intuition
that gleans from raw facts those areas where the
client is likely to move to next.
  The data system itself, of course, is only as g
ood as the people using it, and the degree of
focus it is given At the most basic level, any
form of selling is avoided by law firms, either
because it is seen as pushy and likely to
rattle clients, or because it entails a
particular type of sensitive proactivity that is
quite beyond many peoples experience
within the firm. The start point is this focus
on where the profit will be made. It sounds so
basic, and yet so many elements of law firms
current practices are driven by the belief that
all customers are equal. At the most
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locations or any other criterion that will help
to cut your business into meaningful
chunks. If you dont, every allocation of the
firms resource is being diluted by spreading it
too generically, across too many customers. If
you have not done this data analysis, do it now.
Cross-selling, where it is done effectively in
retailing, financial services, online (by the
likes of Amazon) and even on occasion by the
dreaded utilities industry, entails the careful
collection, analysis and utilisation of customer
data. There is no excuse for not doing this it
will be the single most cost-effective element of
cross-selling you undertake. Remembering how to
sell   If the management information is coming
through, you are now able to identify the clients
who will make the biggest commercial impact.
But none of this effort has yet made you any
money. Its now back to the people and
remembering why people tend to buy in the first
place. Why is it that people seem to forget what
its like to be sold to, as
basic level, any form of selling is avoided by
law firms, either because it is seen as pushy
and likely to rattle clients, or because it
entails a particular type of sensitive
proactivity that is quite beyond many peoples
experience. For those law firms that do actively
seek further business from existing clients or
prospects, however, their enthusiasm and
proactively can be misguided for many firms
beginning to gear up their sales efforts any sale
is a good sale, and any customer is a good
customer. Identifying profit This is dangero
us, costly, and (at best) wasteful. Consider the
economics. There is an enormous gearing effect
in focusing on certain types of customers, and
certain types of sales. Broadly, the old Pareto
truism dominates your business 20 of your
customers will be responsible for anything
between 65 and 90 of your total profit. Profit
not fees, not sales revenue. (See Typical
profitability of professional customer bases)
You need to know which are your most (and least)
profitable customers, services, business sectors,
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soon as they start doing selling? We all know
how annoying it is to have a bad sales pitch
pointed at us when we least want it and yet the
blinkers descend whenever were trying to flog
our services to someone else. And you wonder why
law firms tend not to be good at selling?
Of course, not all law firms even approve of the
concept of selling. For these firms,
tradition is generally paramount, and the careful
preservation of a long-established
The concerns about reputational risk are entirel
y justified. The key issue is how law firms can
position themselves to sell whilst staying true
to their own tradition, and the service their
clients expect from them reputation impedes t
he adoption of new client-facing practices for
fear that the firms reputation will suffer.
Others are less conservative, and are exploring
more proactive approaches to clients, while (in
the main) keeping a careful eye on client
responses. However, all law firms are interested
in selling the concept of finding what the other
fellow wants, and suggesting that they consider
making use of your services, is a fundamental of
successful business. The concerns about
reputational risk are entirely justified. The
key issue is how law firms can position
themselves to sell whilst staying true to their
own tradition, and the service their clients
expect from them. Why poor sales results occur
There are two reasons why poor sales results o
ccur. One is just obtuse selling technique
which is the result of bad hiring and bad
training, and almost invariably the cause of the
reputational damage the more
cautious firms fear. The other is lack of
thought and preparation. Ive already mentioned
the old maxim about legal services being a
people business that its all about
relationships, trust and convenience. But the
heart of good selling is exactly those concepts
its just that its devilishly difficult to do
well. Selling is all about people but dont
make the mistake of assuming that this means
charm, smarm and a golden sales patter. Instead,
the most effective selling comes about when the
client truly believes that what you are offering
is in their best interests, and that it is their
own best interests that you have at heart.
One of the most powerful consumer research studi
es I have ever seen was in the banking sector a
few years ago. It transpired that an astonishing
number of people, irrespective of salary level or
educational background, opened their monthly bank
statement in the unspoken belief that the bank
manager was the last person to have read it
before it was posted to them. They felt that
somebody older, wiser and caring had skimmed
their months transactions, nodded thoughtfully
and said Thats a good month. Well done or
alternatively Oh dear, thats not like her at
all I hope she does better next month.
A very human response   People will always be
impressed when it appears that you have done your
homework. They love to think that they are
important enough either as a business, or as an
individual to warrant special focus being given
them by another firm. Then, when that firm
contacts them with real evidence that their
movements have been tracked and reflected upon,
and that there is a
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particular solution that has been selected just
for them, there can be an extraordinary and
very human response. The key components
It is these feelings that the best cross-selling
will trigger. And this is where good IT comes
into its own. What you need is a system that
will allow you to track your key clients, so that
you can spot what theyre doing, where theyre
going, and (by extension using your intuition)
what they are going to need next. This is not
difficult but it takes a combination of
accessible management information, intelligent
application of thought to their precise needs,
and then the wit to put across engagingly that
you have been going through precisely that
process. Customers want a good deal and with
out inconvenience but value is not a simple
monetary equation to them. Value means a lot of
things, many of them rooted in old-fashioned
concepts such as personal attention, caring,
making yourself approachable, and giving
something back. Think of your own customer comm
unications in this light. What evidence do you
give them that their business their own
business, as individuals matters to you?
Customers want to be valued they want to know
that you care about them, bother thinking about
them, and continue to have their interests in
mind. And they want communication they want to
know that youre still there, and are still
trying hard on their behalf.
Think of your own customer communications in thi
s light. What evidence do you give
them that their business their own business, as
individuals matters to you? How can you say
something to them that is both 1) timely and 2)
relevant? If you havent got this right, theyll
know in the first 10 seconds that youre wasting
their time. Finally, how can you get this into
the hands of your own sales staff? because you
will The game is won and lost on profit and fee
generation, and if you are looking for real
return on investment you wont get it by
operating on the cheap always have better resul
ts with a real person-to-person contact than you
will with laser-printed direct mail or, heaven
forbid, unsolicited calls from unknown call
centre operatives. You get what you pay for
  There is a science to getting this right to pi
cking the right customers, the right message, the
right staff, and the right reward package to get
the best effort from them. Evaluate it, test,
learn, and improve, or you are wasting your time.

Individually selected customers
Effective cross-selling
Data Analysis
Personal communication
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This all costs money. This is not a low unit
cost activity. But at your peril do you continue
to drive down the cost of doing business with
your own most important customers. The game is
won and lost on profit and fee generation, and if
you are looking for real return on investment you
wont get it by operating on the cheap. Truly,
in cross-sales you get what you pay for. (See
Effective cross-selling) The most elusive sk
ill And in this regard, how do your own people
rate? Ultimately, the most important (and
elusive) skill of all is the ability to
understand a customer, make oneself likeable, and
close the sale. This is a recruitment issue of
course, and also a training issue. But its also
a question of priorities, workload and
remuneration. If law firms are to create the
environment necessary for cross-selling to
flourish, they need to think about the
profitability at stake and raise the rewards
accordingly. Its about the intelligent use o
f simple data systems and an approach to the
customers that demonstrates style and common
sense. Your business depends on people meeting
people and if the technology isnt helping them
to do that, then you might as well simply stand
around the IT box and admire it. But your
efforts can just as readily be killed by the
clunky sales pitch on the phone.
Its a combination of hard facts, and soft peopl
e skills. If you dont have both, youre left
with intrusion or smarm and you wouldnt buy
from a firm like that, would you?