Question

Topic: Strategy

Client Valuation

Posted by Anonymous on 4/14/2004 at 4:49 PM ET 250 Points
Is there an effective method to determine client value within a legal service firm? Are there programs out there that help service oriented businesses assess the value of a single client AND the value of a business client? I am struggling to get an enterprise-wide view across to the attorneys I work with. We don't have the data to show them what each client is worth and our view of client relationship management is very narrow.

Legal firms are service/relationship driven and thus harder to for me to quantify.

Any help/advice would be greatly appreciated.
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RESPONSES

  • Posted by jcmedinave on 4/14/2004 at 5:37 PM Member
    Hello,

    Customer Value:
    1) Sells (contracts, agreements) With your Company or Competence.
    2) Future sells (depending on each business, I suppose that it is better for a lawyer to be near a Company that participate in government auctions or that could be demanded because of their kind of business). It is important that you will define the 5 principles characteristics of a good potential business. Where there is a risk problem or demand, you should be there.
    3) Costs (it is better to attend people and cases that consume less time and money).
    4) Referrals (a customer could be important by his influence in others, it could be a good image and reference).
    5) Growth and Potential (You can begin with a low customer and you could grow with him).

    Bye,

    Juan Carlos
  • Posted by Pepper Blue on 4/14/2004 at 6:45 PM Member
    Hi ccjohnson:

    The hardest part of determining the "lifetime" value of a customer is deciding how long a "lifetime" is. Is it a week, a month, 10 years? How much money was spent in that time? What does the average client spend? What is the profit on that person?

    This website below will help you work through all that. They have a great downloadable Excel worksheet and excellent instructions that really help you drill down and find the information you need.

    Best of all it not only helps you find the LTV but the LTP also.

    https://www.zeromillion.com/marketing/determining-lifetimevalue.html

    I hope that helps.

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