HARNESSING PREDICTIVE ANALYTICS TO DRIVE CLIENT GROWTH AND RETENTION

Transcription

1 HARNESSING PREDICTIVE ANALYTICS TO DRIVE CLIENT GROWTH AND RETENTION Experience and Results from Our Predictive Analytics Efforts #ILTAG26

2 SPEAKERS Barbara Taylor Heather Reid Kim Rennick David Kuhlman Chief Marketing Officer DLA Piper LLP (US) Director of Practice Marketing DLA Piper LLP (US) Director of Sector Marketing DLA Piper LLP (US) Partner Axiom Consulting Partners LLC

3 OUR EXPERIENCE WITH PREDICTIVE ANALYTICS The problem we tried to solve What we did and why What we learned How we are applying lessons learned

4 WE THINK WE KNOW WHAT CLIENTS VALUE, BUT WE REALLY ONLY KNOW WHAT PEOPLE SAY THEY VALUE What do clients really want?

5 WE REALLY KNOW LESS THAN WE THINK WE DO COMMON MY THS COMMON REALITY We know our clients better than what the data says... Instinct rarely reveals the combination of needs that really drive buying behavior. This is a simple business stronger relationships will win us more work We have strong analytic talent and can meet all of our analytical needs in-house What exactly makes for a stronger relationship? Each person believes they have a master recipe and they are all different. Big data is NOT doing the same analyses with more numbers. True data scientists still rare and fewer still know law firms.

6 MORE OF A SKUNKWORKS RATHER THAN A FIRM INITIATIVE Concept developed by Marketing Big data experience + law firm experience Secured leadership permission Sourced data internally: Marketing, Finance and HR Early insights built support and momentum

7 PREDICT WHO WOULD SHRINK VS. GROW: TURN SHRINKERS INTO GROWERS. 1. 7M records: Finance, HR and Marketing separate inputs 3. Two models: ~100 demographic, people, sales and service, and operations Clients factors that Grew 4. Drivers of client fees: Indicators Action Opportunities 5. Modeled the significant Growth economic opportunity Predictors How growers look different than shrinkers? Clients that Shrank What did we do differently? Growth Drivers

8 PILOT: FOCUSED ON THE CRITICAL FEW THINGS THAT MATTER MOST. Two Targeting Approaches 1. Predicting clients at risk of falling out of love 2. Predicting clients that value us less Four Tactics Seem to Work Broadly 1. Reduce size of matter teams to five or less and increase time per team member proportionately where possible 2. Introduce one new professional to the relationship 3. Add one more industry expert to the team (can be combined with #2) 4. Run a focused, relevant marketing initiative for each client FOCUSING EFFORTS TAKING ACTION 1. Double our revenue growth 2. Substantially improve client retention

9 SMART, TARGETED EFFORTS TO BUILD A WILLING COALITION. Focus Identify vulnerable clients Target four highest-impact actions Target Prioritize clients based on risk, size Select Partners and practices open to change Remaining become control group for comparison Predictive Confidence OPPORTUNITY 1: Reduce matter team size Target Clients for Impact B a s e d o n r i s k l e v e l a n d f e e p o t e nti a l Prioritized List based on OPPORTUNITY 2: Add industry experts FY15 Fee Contribution combined score OPPORTUNITY 3: Increase new Most at risk professionals Next most at risk Etc. OPPORTUNITY 4: Run marketing campaigns Action Compare and Measure

10 CONCERTED ACTION AND DILIGENT MEASUREMENT PROVE IT WORKS. Focus Target Action Divide Partners and practices Tell the story and gain commitment Monitor to ensure action Compare and Measure Compare control to action group Build business case for broader change

11 CHANGE MANAGEMENT STRATEGY Coalition of the Willing: Focus on openminded and interested partners Senior Involvement: CMO and Directors willing to pitch in at a moment s notice Flexibility: Willing to change tactics and approaches as needed Steady Pace: Avoid oneand-done, keeping up the pace of activity Accountability for Results: Marketing Managers know their ratings depend on activity and engagement Monitor Activity: More important for accountability than results

12 EMERGING OUTCOMES The pilot indicates significant impact to profitable growth focusing our efforts on the Action group we prevented 85% of the projected fee loss Financial benefits of taking action appear between four and eight months later The more of the four levers pulled, the more likely (and greater) the effect Two levers (introducing new professionals and increasing expertise) appear to individually demonstrate a material impact on fees Changes in matter team size alone do not appear to have had a material impact on fees, at least not yet* * We suspect that changes in team size are more challenging to execute and very likely take longer to materialize in terms of fee impact.

13 THE ACTIONS TAKEN IN THE ACTION GROUP PREVENTED 85% OF THE EXPECTED FEE LOSS Control Group Fees* (N = 168) Actual decline in fees for Control Group: 32%. Action Group Fees (N = 154)** Actual decline in fees is only 15% of the equivalent Control Group decline. -4.9% -32.2% JAN-APR If in If Action in Group Action Group Actual Fees JAN-APR 17 JAN-APR 17 * Comparing the first four months of 2017 with the same period in 2016 on an annualized basis. ** We trimmed four outliers from each group to ensure changes in a few clients were not driving the overall results. JAN-APR If in If Control in Group Control Group Actual Fees JAN-APR 17 17

14 REGARDLESS OF GROUP AS WE PULL MORE LEVERS WE OBSERVE A HIGHER IMPACT ON FEES No levers pulled: lost revenue -48% Average Monthly Fees vs. Levers Pulled (Action & Control Group Combined) One lever turns loss into growth +14% Greater fee increase with more levers pulled Jan-Apr 16 Fees Jan-Apr 17 Fees +20% or More Levers Pulled Levers Pulled

15 NEXT STEPS 1. Update Relationship Partners on the pilot results and continue to engage the Action group with more of the same actions 2. Expand our focus to include additional clients at risk from the pilot group that demonstrate high levels of fee contribution 3. Re-run the complete at-risk client list to provide new targets for action 4. Adjust focus and resourcing to increase capacity to engage with Partners on levers

16 QUESTIONS?