Targeting a Niche Market - SMBs - Case Study Example

Interpretation and Recommendations The argument that SMBs owners may not be able to keep up with the changing legal and regulatory obligations of their businesses is validated by this research. Some private franchise and SMBs owners do not consult legal services providers and are sometimes ignorant of the legal obligations required of them. Results indicate that a majority 63 percent of SMB have used legal services compared to 37 percent who have not. Those who have not can be assumed to the small businesses who have 1-5 employees and do not need much legal assistance, or they could be ignorant of their legal needs. Major services sought include drafting of documents, buying or selling of property, workplace claims and contract disputes and registration requirements. Without research, it is easy for legal firms and lawyers to assume that their customers rate them the same way they rate themselves. However, this may not be the case. For instance, in a study conducted by May (1994) on attorneys and owners of small businesses, attorneys rated themselves as being excellent in adequacy and availability while the small business owners thought they were just satisfactory. The study also established that, while attorneys thought that business owners were hesitant and unwilling to seek legal services for fear of the costs associated with it, the business owners themselves indicate that they are more willing to seek legal help. The evidence obtained from this study would inform the strategy that Stacks would adopt to meet its business objectives. As such, this study proposes the following recommendations to Stacks Law Firm. 1. Targeting a niche market (SMBs) Although identifying the potential of SMBs for Stacks was not among the objectives of this study, the results indicate a great potential for growth should Stacks Law Firm target this niche market. The Porter’s (2008) analysis of Stark’s competition shows that there are many legal firms that offer services for the SMS and franchises. As such, the only way that Starch would remain competitive is raising the bar of their services and differentiate itself from other firms. While Stacks offers a range of services for different businesses, adding more emphasis for this market could increase its prospects for expansion. The Australian Government (2016) requires every SMBs owners to adhere to several legal and legislation requirements; business registration, licences, privacy act, independent contractors and dismissal rules among others. Apart from the many requirements, Nelson (2016) assert that there is an increase in law firms and competition has increased. Additionally, the Porter’s (2008) Five Forces analysis indicated that the rivalry existing between the firms is high. Thus, for Stacks to remain competitive, it can either differentiate the services it offers or concentrate on a potential niche market. Targeting SMBs is one way of achieving both; it can tailor its services to meet the needs of the niche market thus differentiating their services. Coverdale et al. (2012) says that small businesses tend to seek legal assistance from accountants rather than from lawyers, and those who choose to go to lawyers seek specialists. Stacks can take advantage of this avenue to both provide specialist services that will demonstrate the difference of seeking legal help from a lawyer as opposed to an accountant. Stacks could also put in place a strategy creating awareness to SMB owners to seek the right service from the right people; legal services from lawyers and financial services from accountants. 2. Membership One of the objectives of this study was to measure the viability of a membership program for SMBs in Stack. The results indicate that a carefully structured membership program is practical. Stacks should consider coming up with a membership. First as the results of the primary research confirmation, there is no membership program that exists currently. Secondly, the research shows that business owners would be willing to take up such a membership provided it caters for their legal needs. The findings indicate a 77 percent of respondents would be attracted to a law firm that offers discounts to members. The membership program should be specifically tailored to offer benefits a large number of businesses need. As such, a further research using a representative sample would reveal the most required benefits for firms to ensure the membership plan is sustainable. On the willingness of the participants to pay for membership fee, most of them indicated that they would pay for $2000 annual fee. There is a limitation to this fee though, in that, this was the lowest option provided in the interview question. However, as indicated in other instances, SMEs have a desire for lower legal fees. As such, Starks should come up with a membership plan that does not only provide discount for their members, but it should also consider lowering the membership fee as an incentive to joining the membership program. Although health businesses showed little interest in joining a membership, those in the hospitality and retail franchises expressed interest provided they get value for their money. The membership inclusions preferred include discount on legal services, priority in consultation times, updating of business legal related information, numerous specialised services within the firm and regular check-ins by legal staff. The limitation with this inclusions is that they were suggested by the researchers which could lead to bias in the responses. More reliable information could have been obtained if the respondents were left to suggest the kind of inclusions they needed. From the study, legal issues related to employees seems to be the greatest legal need for both the franchises and the SMBs. Collection of debts from deceased estates, property purchase for both franchises and SMEs, insurance and safety standards, malpractices by clients. This coincides with the findings of the study conducted by Coumarelos et al. (2012). The study established that 61.8% of legal advisers especially private lawyers, were consulted by business owners for deceased estates issues, wills and investment income. Further research is however needed to tailor this membership program to all the needs required by most SMBs. 3. Embracing Technology Secondary research on Stacks competition brought revealed that some of the significant competitors for Stacks conduct business online. One of the firms identifies is LegalVision. Further secondary research discovered that a company like LegalVision generates 20 new customers leads each day through their blog (Grimley, 2015). Using the internet for their marketing is not only cost effective, it is efficient for most people. One limitation to this study is the fact that it did not consider the characteristics of Franchises and SMBs owners. The characteristics of the owners, for instance age, level of education and gender would inform the kind of internet strategy adopted. Nonetheless, most people in the business industry use the internet for their business and it is more likely that they would benefit from an internet strategy should Stacks adopt it. In fact, interview responses on the preferred channel of communication indicated that face-to-face communication was most preferred, however, respondents admitted to using the internet numerous times to check their understanding of a legal issue. They also accesses templates of legal documents online instead of contacting the lawyer. Coming up with a way to meet the client need to information online is a productive strategy. The strategy adopted by LegalVision involves providing free legal content online which in turn pull customers to the firm. Equipped with the needs of the SMEs and franchises owners, Stacks can come up with content that answers pertinent questions owners have. For instance using blogs to generate content that is specific to SMEs and franchises’ legal needs. This has been tried and has proven to work. Online presence can be improved by upgrading their website to be professional and easy to navigate. Although a website may not solve all the marketing needs of the firm, it provides an avenue for fielding enquiries and timely communication with clients. Website optimization for search engines is important to ensure that people searching for firms locate Stacks. In addition to website upgrade, the company can benefit greatly from coming up with a social media strategy. The company does not need to be present in every social media site, rather, it is important to choose one or two sites and concentrate on putting forth the firm’s values and culture on those sites. 4. Cost leadership The cost of legal services is a big consideration for business owners. The pricing should be right and should be appropriately presented to the customers. In addition, the charges should be broken down and explained to the client. Bringing the consultation cost down to manageable levels would increase the number of clients consulting the firm for legal services. Respondents ranked cost of legal services as one of the important factors they consider when choosing a legal representation. 67 percent of them cited affordable legal services their major consideration. The respondents felt that running a business was already a legal burden and adding legal fees would increase this burden. SMB are always looking for opportunities to minimize expenses and increase profits, therefore, coming up with an affordable package would work for Stacks. A lawyer’s legal expertise and the cost of his services were among major considerations for being chosen. Lawyer factors that are most preferred include speed of response, competency and expertise, practicality of the solution offered and availability of the lawyer when needed. Recommendations is an important factor. Asked how they settled on a lawyer the first time, SME owners indicated that they used recommendation from other business owners. 5. Speed Up Legal Services Availability, accessibility, efficiency and other speed related terms were used by respondents to indicate the kind of legal services they would prefer. Speeding the process responding to and of serving clients would guarantee customer loyalty. The 21st century client requires services that are speedier that the generations before. One of the findings of the study is that most business owners would rather consult an accountant even for legal issues. Thus, if they had a goodwill that lawyers would finish the task in the required time, they are likely to change the legal representative they approach when legal services are sought. The quantitative research findings on the factors considered when choosing a lawyer indicated speed as a major consideration SMBs. Speed in this case is not only in the time spent in solving the legal issue, but also the speed within which a firm responds when called upon. Responding on their attitudes towards having a legal provider constantly present, most respondents felt that this relationship would be advantageous. The confidence levels of the SME owners concerning the representatives they sought for their legal issues shows that should Stark deliver, they would ensure loyalty of the customers. Limitations This study had several limitations. First, although the qualitative research findings were analysed separately for SMEs and franchises, the aim of capturing the differences in the legal needs of the two business arrangements was not capitalised. It could have been captured better during data collection. Secondly, the sample size for this study was 35 respondents which is small for this kind of research, especially because there are about 700 000 registered SMB operations in New South Wales alone (OSBC, 2014). The sample cannot be termed as representative because of its small size. However on the number of workers in the different firms, the sample is representative as it includes the number of workers in a minimum to medium size business (Table 1). Finally, on the willingness of the participants to pay for membership, most of them indicated that they would pay for $2000 annual fee. There is a limitation to this fee in that this was the lowest option provided in the interview question. Conclusion This study demonstrates the SMBs provide provides Stacks Law Firm with a possible path for expansion. SMBs have different legal needs and their owners would be willing to use the firm’s legal services should they be accessible, affordable and efficient. A marketing strategy of targeting a niche market, rolling up a membership program embracing technology, cost leadership and speeding up the legal process provides a practical way of not only increasing profitability, but also increasing its competitive advantage. References Coumarelos, C, Macourt, D, People, J, McDonald, H. M, Wei, Z, Iriana, R & Ramsey, S 2012, ‘Legal Australia-Wide Survey: Legal need in Australia’, Law and Justice Foundation of New South Wales, Sydney. Grimley, J, 2015, ‘Australian Law firm LegalVision is generating 20 new customer leads per day from their blog’, Asian Law Portal, September 17, 2015. Available at: http://www.asialawportal.com/2015/09/17/australian-law-firm-legalvision-is-generating-20-new-customer-leads-per-day-from-their-inbound-content-strategy/ May, BE 1994, 'Adequacy, availability & quality of legal services for small businesses: A South Dakota study', South Dakota Business Review, vol. 53, no. 2, p. 1. Read More