Frequently Asked Questions
How to Use the FAQ List
Welcome to the Frequently Asked Questions page of RainmakerLawyer.com.
Click on the questions below and the answers will be revealed.
This page is where we post answers to some of the questions we receive most often. The topics are as varied as the interests of our readers. If you do not see an answer to an issue that is keeping you awake at night, please go to the Ask the Rainmaker Page and submit your question.
The middle column on this page contains the most recent questions and answers.
If you’d like to explore all the answers on a particular topic, please select that category on the left column and all of the questions in that category will be displayed.
Remember, to view an answer, please click on the question.
Business Development FAQ
What is a Law Firm Business Development System?
A Law Firm Business Development System combines Business Strategy, Integrated Marketing Communications and Sales into an organized process that an attorney can use to grow his/her firm’s revenue.
While many attorneys rely on sales gimmicks, a true Business Development System has many integrated processes and activities. These activities are combined with speaking events, educational materials, seminars, direct marketing systems and a sound Internet marketing strategy help to ensure that the firm has a steady flow of new business while its attorneys deepen existing client relationships.
Large law firms, small law firms and solo attorney practices should all have some form of business development system.
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Why should attorneys worry about Business Development in their Law Firm?
A law firm is a business.
Most businesses fail. Studies done by educational institutions such as the Wharton School of Business at the University of Pennsylvania and Harvard University have the business failure rate as high as 90%-95%. The NUMBER ONE reason for this failure is a lack of focus on business development.
Many attorneys think a law firm is different. They believe that if they get just a handful of clients, they are such great lawyers that they will be able to live off the referrals they receive.
Nothing could be farther from the truth. A law firm – even a small firm or solo practice – must constantly work to originate new relationships and deepen existing client relationships. This is the essence of business development. If your firm is not growing is it dying.
Attorneys must worry about business development for thier law firm.
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What is the difference between Sales and Marketing at a Law Firm?
This is a question the many attorneys can’t answer.
They associate both sales and marketing with a pushy, fast talking guy in a suit going door-to-door trying to get people to buy his product. While some salespeople may behave that way, both sales and marketing are not intended to be processes that force, bully or intimidate people into purchasing things that they do not want or need.
Marketing is a business function that identifies the needs of a specific group of people (the market) and helps them express a desire to fill those needs. In other words, marketing helps convince people to WANT the products or services that they already NEED.
Sales is the business function that converts people who have an interest in a product or service into consumers of YOUR product or service.
Marketing drives traffic to your business and sales converts that traffic into clients. Marketing creates interest and sales converts people with interest into clients.
Both sales and marketing are critical disciplines for a law firm and they must be given a priority in all law practices large and small.
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Marketing FAQ
What is Marketing?
Believe it or not many people can’t answer this question.
The definition we like best is:
- “Marketing is a term that describes the process used to identify, create and maintain profitable relationships with clients.”
Each word in this definition is carefully chosen.
“Marketing” is a term. It’s just a label. Why is that interesting? Because many people get hung up on verbiage. Have you ever known an attorney to get hung up on a single word in a deposition? The term itself is unimportant. It’s just a word. I don’t care what you call the process of identifying, creating and maintaining profitable relationships.
More important is the fact that marketing is a “process”. It is not a program. It is not a plan. It is not a strategy or a tactic. Marketing is a process. This is critical because a process has no end. It is on-going. Marketing must be continuous.
If marketing ends, your business ends.
In this process we “identify, create and maintain relationships with clients”.
Many people who proclaim to be great marketers only do one of those things.
You need to do all three…all the time.
You must first identify who your ideal clients will be. Next you need to begin a relationship with them and finally you need to maintain that relationship for as long as it is profitably possible.
How many times do we do some work for a client and then forget that they ever existed after that case has concluded?
Now I understand that your business is different. Everyone says that. For example:
Once someone gets divorced, they are probably not going to get divorced again for a long time….or once someone is injured and their case has settled, you are certainly not going to be able to successfully represent them again….or once you handle an estate matter for someone, they are not going to die again so why would you keep in contact with the family….
Does this sound stupid yet?
Well, I hear this kind of thing all the time. Being a professional, I respond with:
“I understand. That is different. But what about referrals?”
You clients, their families or their friends can refer people to you for work in your area of specialization. Even better, they can refer work to you – outside of your area of specialization – that you can refer to other attorneys and you can collect a referral fee for passing the work along.
Everyone benefits from long-term relationships with clients.
That is what marketing is all about…identifying, creating and maintaining profitable long-term relationships with clients.
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What is Image Marketing?
Image marketing (also known as “institutional marketing”) is what most people think of when they hear the term “Marketing”.
Simply put, image marketing is creating a presence for your brand and leveraging that presence to create customer relationships.
This works if you spend a lot of time money and effort on it. The challenge is that it is almost impossible to measure the effectiveness of this type of marketing and most firms don’t have the millions of dollars necessary to launch large image marketing campaigns.
Most of what you see, hear and read in publications, on radio and television, inside almost every envelope, and on most websites is image marketing.
It doesn’t inform the audience about the benefits, advantages and results they can expect from your service or firm.
It doesn’t educate. It doesn’t grab attention. It doesn’t create urgency. It doesn’t make a compelling case. It doesn’t capture a targeted client’s interest. It doesn’t ethically persuade and provide reasons-why a prospect would be smart to work with you. It fails to motivate the audience to respond immediately.
The worst part is that this form of advertising does not demonstrate why your firm will provide better results than other firms.
With image marketing, the client is left trying to figure out why you are better than everyone else and how you are different from everyone else.
In summary, image marketing:
- Is expensive
- Is almost impossible to measure
- Takes time to work
- Doesn’t educate
- Doesn’t inform
- Doesn’t differentiate
- Doesn’t create urgency
The best rule of thumb I ever learned about marketing was: “If you can’t measure the results, don’t do it.”
Ninety percent of the time, you will not be able to measure the results of an image marketing campaign.
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What is Direct Response Marketing?
Direct response marketing is defined as sending a carefully crafted offer directly to your prospective client. You can send the message via traditional mail, email, radio, television or even on the telephone.
The marketing message in direct response campaign is designed to solicit a specific action from the target audience. The delivery of the response is directly between the prospective client and the marketer, that is, the client responds to the marketer directly.
There are five main components of a good direct response marketing message. They are:
1). An attention getting device (this could be as simple as a well crafted headline).
2). Sufficient information for the consumer to make a decision whether to act
2). An explicit offer with a “call to action”
3). A deadline or limiting factor
4). A response vehicle (typically multiple options are given such as a toll free number, web page, return post card or and email address).Direct response marketing is easy to measure because it is highly targeted.
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What are the key differences between Image Marketing and Direct Response Marketing?
Image marketing is about the slow crafting of an image in the marketplace; it’s not about getting immediate results and sales.
Direct response marketing is all about producing leads, driving client traffic to your firm, and getting immediate revenue in the door.
Image marketing is about feel, brand development and the impression your firm creates in the mind of the client.
Direct response marketing says “Call Now!”
Image marketing says: “I’m cool. Love me. Remember me.”
Direct response marketing is measurable. You can look at the specific costs of any given direct response campaign, look at the number of clients that came from it, do some simple math and figure out how effective that campaign was.
Image marketing is not measurable beyond tracking the total amount of money spent on it.
Large companies with big marketing budgets can potentially benefit from the focused development of a positive image over time. Small firms with limited dollars often prefer to invest in a marketing campaign that will produce measurable results rapidly.
The image of your firm is important but building a client base is more important. Your image will develop as a byproduct of your outstanding work on your clients’ behalf.
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What are some examples of an “attention getting device”?
Grabbing the attention of your target audience is critical component in marketing.
We use the term “attention getting device” to describe something that catches the eye of your audience and compels them to pay attention to your message.
This can be a headline in an ad or in a direct mail letter or it can be a scantily clad woman holding a sign promoting a car wash.
Often the physical package can serve as an “attention getting device”. For example: A letter delivered by a messenger in a gorilla suit will definitely be read. More common is a letter that is delivered by FedEx as opposed to arriving via the regular mail.
The bottom line is that people are busy and they are bombarded by hundreds of marketing messages all day long. You need to make sure your message stands out and the first part of that process is to attract their attention.
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Why is a “call to action” important?
A call to action is specifically showing your clients “the next step” they need to take if they are interested in doing business with you.
This is important because giving clients (or potential clients) specific instructions is critical to moving them up the marketing ladder. You must tell them what to do, when to do it and why it is important for them to do it.
Your call to action must fulfill one or both of these promises: “Take this action and get these benefits” or “Take this action and avoid this pain”.
If you don’t give your prospective client specific instructions, they will likely not do anything.
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What is Client Lifetime Value and why is it important for a law firm?
Client lifetime value (CLV) is the profitability of your law firm’s relationship with the client throughout the lifetime of their work with the firm.
Measuring client lifetime value gives you a number that represents the present value of the future profit dollars attributed to the average client relationship.
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We use client lifetime value as a marketing metric to determine how much to invest in acquiring and maintain client relationships.
How can you measure Client Lifetime Value?
As a ‘back of the envelope” calculation for one client:
Estimate the profit for the engagements you expect to have with the client over the period you expect to do business with him or her. If this is an unknown long term, use five years.
For example: If your average profit from a client on retainer was $10,000 per year and you expected to do business with that client for five years the CLV for that client would be $50,000.
Although this rough calculation is better than nothing, it doesn’t take into account a couple of significant variables – the discounted value of money in the future and potential risk that the client will defect.
Method of calculating CLV for the firm:We like to use a discounted cash flow method of calculating client lifetime value because money collected today is worth more than money collected in the future. We also like to use an infinite time horizon because the use of a retention rate will account for the average customer lifespan.
In order to accurately calculate the CLV we need to know the average retention rate of clients at the firm. Simply put, retention rate is the percentage of clients who stay with the firm year over year. We recommend using a three year average for client retention rate.
We also need a discount rate to apply to the future cash flow. The discount rate is the value of the money in the future. This is typically determined by using the rate of return you would have received from that money if it was invested in a low risk investment vehicle - rather than sitting in your client’s pocket.
The calculation then looks like this:- CLV = P x [r /(1+d– r)]
p = profit
r= retention rate
d= discount rate
So if we had an average client profit of $10,000, retained 80% of our clients and used a discount rate of 5%, the calculation would look like this:
- CLV = $10,000 x [.80 / (1+.05-.80)]
So for this firm the lifetime value of a client is $32,000.
This may seem like a complicated calculation but once you become familiar with the thinking behind it, the calculation becomes second nature. We are looking to determine how much money our typical (average) client will be worth to the firm. It is the long term thinking that is as important as the actual calculation itself.
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What does the term “client churn” mean?
Client churn which is also known as client turnover is used to describe the rate of permanent loss or turnover of clients.
Keeping track of client churn is important because acquiring new clients is almost always more expensive than initiating new work among an existing client. Every client who defects cost the company a significant amount of future income.
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What is Client Acquisition Cost?
Client acquisition cost (CAC) is the expense associated with convincing prospects to become clients. Acquisition costs reveal the efforts and resources involved in sourcing and recruiting potential client into the firm. This figure should also include research, advertising and entertainment expenses that are not related to or targeted at existing clients.
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Understanding CAC helps to set a budget for soliciting new business. It can also serve to refocus attention on client retention, service and support.
What is a Unique Selling Proposition?
A Unique Selling Proposition (USP) is the reason that you or your firm are different from and better than your competition. This is the compelling reason why a client should choose you over everyone else.
A USP could also be a way of describing the chief benefit of working with your firm. Unique Selling Propositions can be (and have been) built around any number of things. Your USP could describe a common theme that runs through your business. This includes price, specialty and expertise, positioning and service delivery style – just to name a few.
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What is the Marketing Ladder?
The marketing ladder is a model that describes how relationships are initiated, developed and nurtured throughout the client lifecycle.
The rungs on the marketing ladder are:
- Evangelist
Client
Prospect
Suspect
Suspects are people (or companies) you believe could potentially be a client for your services.
Prospects are individuals (or companies) who have expressed some interest in your firm, your services or your specialty.
Clients are individuals (or companies) who have done business with your firm in the past year.
Evangelists are clients who are so loyal and dedicated to your firm that they work with you on multiple engagements. Evangelists also frequently refer new clients to your firm.
Individuals (or companies) are said to “climb the ladder” when they move from one level to the next. When a suspect shows interest in your firm, he becomes a prospect and when he pays for your services he becomes a client. This is referred to as “climbing the ladder”.
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Strategy FAQ
What does the term Business Strategy mean for a Law Firm?
A business strategy is a set of guidelines that helps the firm’s leaders make decisions and allocate resources in order to reach their goals.
This is a nice, neat and tidy little definition for what can sometimes become a complex process. It is best to keep the development of your strategy as simple as possible. The way to develop a sound business strategy is to define the goals you want to achieve, assess where your firm is now and make a list of the things that need to happen to get from here to there.
That isn’t the Harvard definition but it is probably more effective because it will help you visualize the transformational process necessary to take your firm to the next level and beyond.
A solid business strategy is critical to the success of a law firm. Attorneys must set solid business strategy as the foundation for the growth of their law practice.
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What is the difference between Law Firm Strategy and Tactics?
At many law firms there is often confusion about the difference between “strategy” and “tactics.”
Occasionally, they are used interchangeably. This is incorrect.
Strategy is focused on the “big picture” – the overall plan, how the firm will achieve organizational goals and objectives. It involves deciding what area of the law in which to specialize, what type of clients to attract, what billing methodology to employ, etc.
Tactics are activities specifically created and selected to achieve specific and measurable outcomes. Tactics are the actual ways in which the strategies are executed. Examples include publishing client newsletters, conducting educational seminars, exhibiting at trade shows, etc.
Law firms must set a solid strategy and execute on tactics that consistently deliver the desired results.
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RainmakerLawyer.com FAQ
What is this website all about anyway?
RainmakerLawyer.com was created as an on-line resource for attorneys who want to build a business that enables them to work and live on their own terms.
Your business (a law firm is a business) should offer your three main things:
- 1). Financial Security
2). Freedom to come and go as you please
3). A Fun environment
We refer to these as the “Three F’s”: Fortune, Freedom and Fun.
RainmakerLawyer.com is a guide to help you build that kind of business. The site offers articles, tools and resources that help you make more money and have more fun doing it.
We also privide tips from time to time on how you can have more fun outside of work and how you can put your money to work for you.
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Who is the target audience for this website?
This website exists specifically to help small, private law firms and lawyers in solo practices. We know how tough it is to be on your own and we want to provide you with as many resources as possible.
That doesn’t mean that attorneys in large firms or in corporate counsel positions or working in public/government service are not welcome.
In fact we welcome anyone from any industry, firm or location.
The majority of the content on this website will be useful for anyone who wants to make more money and have more fun doing it. If you fit that profile, then RainmakerLawyer.com is written for you.
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Who runs this website?
There are many people responsible for bringing the best content to you each and every day. The person in charge is actually spends most of his time on the beach…Max Profit. He put up the cash and has built several big professional service firms.
The person who checks the content is Dave Lorenzo. He has also built a few multi-million dollar professional service firms over the years. Dave makes sure that every article and every tool on the site will help you build your fortune, enjoy your freedom or have more fun.
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Why do attorneys need to visit this website to learn about Marketing and Business Strategy?
The engine that drives any successful business is client relationship creation. Without clients your law firm- no matter what its size- would not exist.
Business strategy helps position your firm properly in the market – in other words it helps make sure you are targeting the right clients at the right time in the right way.
Marketing and Sales (yes I know that “sales” is a dirty word for attorneys) help you begin new client relationships and deepen existing client relationships.
Simply put, with out a sound strategy and a solid business development effort, your law practice will fail.
This website will serve as your continuing education resource for Business Development information and Business Strategy information. It will help you keep ahead of your competitors and build your business quickly with less effort.
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What makes this website different from other sites that help attorneys with marketing?
There are three things that make RainmakerLawyer.com different and better than most of the other websites that help attorneys with marketing.
They are:
1). We help you focus on building a business.
While we offer many tips on how to get things done on a day-to-day basis, we also provide tips that will help you build equity in your firm.
Ultimately, your law firm should be an asset that appreciates in value.
You need to focus on building the equity in your firm right from the start. Many of the other websites and so-called “gurus” that help attorneys with marketing are showing them how to succeed in the short term. And that’s where they stop.
In reality, these folks are just helping you “buy a job”. You spend money on expensive advertising and you obtain a handful of clients. You then work directly with these folks until their matter has concluded and then you go back to spending money on expensive advertising. It is a never-ending cycle.
Our mission is to help you build a business for the long run – one that will increase in value over time. Client acquisition is a part of that overall picture but there are many other parts.
2). We have actually done this before.
Everyone who provides educational material for this website has actually used the concepts we are teaching. There is no academic theory on this site that has never been actually proven in real life.
Many other “guru” websites are just copying information they have read in a textbook or have heard in a marketing seminar.
3). We are not encumbered by the stagnant ideas that most lawyers have about marketing.
Have you ever tried to cut your own hair?
Most people go to a trained professional for a haircut because they want the job done correctly. After all, a stylist (or a barber) knows how to cut and style your hair.
We know how to build a professional service business. We know how to build a profitable law firm.
We do not subscribe to the thought process that bogs down most attorneys. We think like your client’s think. This helps us help you understand them. Understanding is the first step to providing them with the service they want.
Although there are many more differentiating factors, these three are the most compelling reasons to return to RainmakerLawyer.com over and over again.
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Why are there topics unrelated to the law on this website?
The primary focus of RainmakerLawyer.com is to help attorneys build a business that enables them to make more money without killing themselves or going nuts. We believe that a Law Firm should be a lifestyle business. Your business should enhance the quality of your life.
Business strategy, marketing techniques, sales tactics, leadership skills, practice management initiatives are all part of building a solid business that will pay you dividends for the long run. Topics like investing, health and wellness, gadgets, recreation and even a few travel articles are included because our members have told us that these things interest them and they want more information in those areas.
The bottom line is that this is a member driven resource center. If you ask for it, we will try to include it.
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Blogging FAQ
What is a Blog?
The word “blog” is an abridgement of the words “web log” – which is to say that somebody combined the two words somewhere along the way and the catchy term “blog” became a standard.
A blog is essentially a website that is updated regularly with new content. The content can be articles, it can be audio, video or it can be a combination of all of the above.
There are a few common characteristics that differentiate a blog from “static” websites. These characteristics are:
- The content on a blog is updated regularly. Updates can range from daily to weekly or monthly.
- Blog content is organized in some fashion. Sometimes it is organized by date and sometimes it is organized by topic and sometimes it is cross referenced to include both.
- Most blogs cultivate interactivity with readers. Some do this by encouraging comments on each entry (called “posts” or “articles”). Others encourage “trackbacks” which are links that reference back to the original article.
Some blogs inform and educate and others just serve as a journal designed to chronicle events in someone’s life.
A blog is a useful tool for anyone looking to communicate with a specific audience on a regular basis.
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Why should every attorney and law firm have a blog?
Every attorney and every law firm should have a blog.
Blogs are particularly valuable for attorneys. Here are seven reasons why every attorney should blog:
1.) A Blog Will Help to Build Trust with Prospective Clients
Articles on blogs tend to be a little more informal in style and content. You can share some information with your prospective clients in a conversational tone. It is almost like giving them a quick look into your true personality. When was the last time an attorney was critiqued for being “too human”….
Updating a blog regularly will give you frequent communication with your prospective clients. Frequency builds trust.
Discussing a variety of issues on your blog will help people feel like they can approach you – even on things that seem “small”. In other words, people will be less intimidated and will actually call you.
2.) You Will Educate Your Client Base
This point is huge. If you update your blog regularly, you can teach your clients and prospective clients how to bring you business. You can also immediately disqualify crappy cases you would never accept. This qualification process alone will save you thousands of hours in wasted time.
3.) Regular Blog Articles Allow You to Restate Your Competitive Advantage
You must differentiate your services from your competitors. Your blog allows you to discuss your points of difference and your competitive advantage over and over and over again. If you do this often enough, your prospective clients will actually start to hear it, see it and believe it. Once your blog is up and running, it costs you nothing to keep restating your message.
4.) Your Blog has a Pass-Along-Effect
If you post interesting articles, people will pass them along to others. This will help to build your word of mouth marketing. This is the most cost effective form of building a client base.
5.) Learn What Your Clients Need
If you open your blog up to comments you will find out a good deal about your clients’ needs. This will help you tailor your offering to them. You will also learn how they like to receive information.
6.) Position You as an Expert
You can articulate your point of view and your opinion. This will help position you as an expert not only in the legal sense, but it is not uncommon for attorneys who blog to be perceived as experts in the industry they work with most frequently.
7.) Search Engine Optimization
New original content on your website – generated by blogging – will help to move your website up in the rankings on search engines. Sites like Google and Yahoo love fresh original content.
Your law firm, no matter how large or small, must use a blog to communicate with your clients.
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What is RSS?
That Orange Square
on the left column of this site (called a ‘chicklet’) is the international symbol for the RSS feed. If you click on it, you will be taken to a page that walks you though the subscription process.
RSS stands for Really Simple Syndication. It is a ‘feed’ that you subscribe to that is instantly updated every time this website is updated.
Since we pride ourselves on being thorough here at RainmakerLawyer, we’ll give you a detailed explanation of what this means.
RSS is a technology that is being used by millions of people around the world to keep track of their favorite websites.
In the ‘old days’ of the web the only way to keep track of updates on a website was to save it to your favorites as a bookmark and to return to it regularly to see what was new.
RSS eliminates the need to keep checking back with your favorite site. Once you ‘subscribe’ to the feed of your favorite site (subscribe means that you save the feed address in a Feed Reader) new content automatically appears in your Feed Reader once the site is updated.
Note: Feed Reader, News Reader and RSS Reader are all used interchangeably. They are special websites that translate the RSS feed into readable text.
How RSS technically works is something you should look up on your own because that is beyond our ability to understand and explain.
We can tell you how to use RSS.
How to Use RSS
The first thing to do if you’re getting into reading websites via RSS is to set up an RSS Feed Reader.
There are many Feed Readers out there with a variety of features. Start with a free version that is web-based. Two easy-to-use, web-based Feed Readers are Google Reader and Bloglines.
Both of these RSS Feed Readers work like email. As you subscribe to feeds you’ll see that unread entries from the sites you’re tracking will be marked as bold. As you click on them you’ll see the latest update. You can read it right there in the Feed Reader. You are given the option to click through to the actual site or move onto the next unread item - marking the last one as ‘read’.
The best way to learn how to use either Google Reader or Bloglines is to simply subscribe to some feeds and learn as you go. Both have good help sections to get you up and running.
Again, if you click on the orange square on the left column of our site, you will be taken to a page that will walk you through this process.
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