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Categorizing CRM Contacts – Let Me Count the Ways

Categories are frequently used to break your CRM database into more manageable groups or classifications or to target or segment your contacts. There are many reasons – and variety of ways – to categorize your CRM contacts:

They Love Me

One of the most frequently used categories is ‘clients’. These are often ripe targets for cross selling and other business development efforts. The idea is that, since they already are writing you checks, presumably they like you – and might want to do even more work with you. They are also the ones you want to make sure you keep in contact with and communicate with regularly.

They Love Me A Lot

Some firms go a step farther and break out their ‘top clients’. These are often the ones that contribute 80% to 90% of the firm’s revenue. As a result, you may want to single them out for special treatment. Some firms focus their most strategic marketing and business development activities, such as client teams or client surveys, on this group.  

They Could Love Me

Another useful category might be ‘prospects’. For firms that are interested in developing business with new Clients, targeting prospects may pay dividends. Plus you may just want to keep in touch with these folks on a regular basis so that the firm is top of mind when that big case comes in.

They Love Me Not

Another type of useful category is ‘status.’ No, this doesn’t refer to your really cool or celebrity contacts. It’s actually a good way of identifying CRM contacts of specific types that you may want to include or exclude from a particular list or activity. For instance you might want to categorize your adversaries or competitors so you don’t send them your newsletters or invite them to your seminars. 

Categorizing CRM Contacts – Target Practices

When you are trying to target key groups, it can also be beneficial to categorize your contacts by firm practice area or group. This type of category can be helpful if you want to enhance communications with Clients of a certain practice or if you want to focus on cross selling between practices.

How many times recently have you been asked by an partner to pull a list of the firm’s Healthcare or Energy Clients because the firm is suddenly looking to expand in an area that is particularly ‘hot’? Or maybe you are trying to induce a new lateral or group of attorneys to come on board, but first they want to see the firm’s top Clients in their particular practice specialty. Or maybe it’s as simple as the attorneys can’t believe that you can’t quickly and easily pull a list of key contacts to invite to the labor and employment seminar.

If these types of request are next to impossible, then this type of categorization makes absolute sense. Remember, one of the best ways to really improve your aim at your key targets is to ‘practice.’

 Location, Location, Location

Another type of category you may want to include is location. A location category can help to ensure that the right messages reach the right contacts.

For instance, some firms like to include categories for the offices that a particular contact works with most frequently. That way, when the office has an event, they can be sure to invite those Clients. This is also important because sometimes you may deal with contacts who live in one place, but work for a company that is in another. You may not want to invite the Yankees fans to the Braves game. Location categories can help to prevent that.

Additionally, some firms want to be able to categorize contacts with all of the locations in which they do business. For instance, a company may be headquartered in one state, but may have operations in several states across the country. As a result, they may be interested in legal updates or alerts for multiple locations. If you search only by the company main address when you send the email, you might miss the opportunity to provide information – and possibly legal services – to those Clients. But if you add a category for all of their regional locations, you can make sure they get the targeted information for each state.

Other firms take location categorization to another level by utilizing software to convert zip codes to specific counties or regions. For instance, you might be having an event in Atlanta, but because the population is so spread out, you also would want to invite people in the surrounding cities or counties. As with many other things, CRM success sometimes really is all about location

 CRM Status Symbols

Another way you may want to categorize CRM contacts is by contact ‘status’ or ‘type.’ This will allow you to better keep track of key individuals, segment your lists and target the audiences that you want to reach – and the ones that you don’t.

Status categories may include a number of different types of classifications. For instance, you might want to track types of Clients such as current Clients, former Clients, top Clients or at risk Clients. You might also want to keep up with prospects who the attorneys may be targeting and who could someday become Clients. Additionally, you may to categorize other contacts who can help you to bring in Clients such as referral sources like accountant or bankers. These groups of contacts are the people who you want to keep in contact with on a regular basis, share information with or invite to firm events.

Then there are the contacts who you categorize to make sure that you don’t share firm information with them or invite them to events. These might include adversaries or competitors. Judges might also fall into this category. You might also be sure to categorize personal contacts to prevent them from being included in the CRM system at all.

Then there are more innocuous categories you can use to make it easy to find certain people or companies when you need them. For instance, you may want to categorize different types of experts or vendors that the firm uses frequently. You may also assign a category to other types of businesses that may be in the system such as restaurants, hotels or clubs. All of these categories make it easier or more efficient for the attorneys and staff to do their jobs and accomplish firm goals.

So Many Categories, So Little Time

Since categories make it easier to segment and reach key Clients, it would seem like the more categories you have, the better, right? Not necessarily.

With categories, sometimes less really is more. You don’t want to give people too many choices. In fact, one firm decided to make it mandatory that before a new matter was opened, the assistant had to pick from a huge list of NAICS industry codes when entering a Client into the CRM. They were later amazed to discover that they were working with literally thousands of Accounting firm Clients. I’m sure this was the result of a very focused business development effort to target accounting firms and had absolutely nothing to do with the fact that ‘A’ just happened to be at the top of their enormous industry code list.

On the other hand, one category may not be enough. Another firm assigned practice area categories their contacts. This meant that most of the people who were known by the labor and employment group had been assigned that category. However, they were not further broken in to status types to describe their relationship to the firm. As a result, several labor leaders who happened to be in the database were almost invited to a seminar aimed at preventing union organization in the workplace. Not a comfortable position to be in. So when it comes to categories, you really have to be strategic and make sure you find a happy medium.

So Many CRM Categories – So Now What

So now that we’ve identified so many ways to use CRM contacts categories, your head may be spinning as you try to figure out what to do next. On the one hand, the great thing about CRM is that it can do so many things. On the other hand, the challenge with CRM is… that it can do so many things.

In fact, there are so many things that CRM can do that it really can be challenging to figure out what it should do. You also need to be careful not to try to do too much and end up not doing anything really well. As with any many things, CRM success requires focus.

CRM success also requires planning. You have to make sure that the projects you undertake have real value for your firm and attorneys and that you have the resources in place to execute them. But CRM success also requires initiative. Once you your plan in place and, you have to make things happen. Once you get started, CRM success will require momentum. You have to keep things moving forward because if you stop, it can be hard to get things going again.

Finally, CRM success requires persistence. Remember, Client Relationship Management isn’t a project or an initiative – it’s a fundamental change in the way your firm manages relationships. It’s a never-ending process toward progress. The good news is that once you do, it can really help your firm enhance communication, coordination, Client service and business development.

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