January 7, 2017 | All Marketing Topics
5 Key Marketing Metrics for Law Firms
By analyzing five key metrics, law firms will be empowered to make smarter and more decisive spending decisions.
#1 — Where are the leads coming from?In the legal industry, a marketing “lead” is the initiation of potential client interest or inquiry into a firm’s services. Most law firms use a variety of tac- tics to gain leads. Potential clients may be reached through a variety of channels, including online ads, print ads, or word-of-mouth referral. It’s important to capture the source of each lead. The first step in better understanding and managing marketing is keeping track of where each lead came from and crediting the appropriate advertising medium.
#2 — How are they converting?A conversion occurs when an interested person takes a first step towards becoming a paying client. A conversion could be the number of people who signed up for a news- letter, clicked on a link within an email, or even better, picked up the phone and called. The final step in the conversion process – which should also be measured – is when the interested person becomes a client. Learning how leads are converted is essential to determining what is working and what isn’t. What messages were used, how they were conveyed and where the ads were placed (e.g. online banner ad, magazine ad, etc.) can be described as the marketing tactics.
#3 — How much revenue are they generating?This is a meaningful measurement that is key to tying a firm’s marketing efforts back to tangible results. Once the source of a lead has been determined, and the marketing tactics that have converted interested parties to paying clients have been recorded, the next step is to link total revenue generated by these clients back to the marketing source. Without this step there is no accurate way to measure the success of an advertising campaign. For example, a firm takes out an ad in the Weekly Post newspaper which generates five paying clients. These paying clients create $50,000 in total billable revenue over the next year. Now let’s assume this same firm is also running an ad online that generates 10 paying clients. The firm decides to cancel the Weekly Post newspaper ad because it generated a lower number of paying clients compared to its online ad. However, this may have been a bad decision because of the high revenue associated with the clients from the Weekly Post ad, which has not yet been taken into account. By analyzing the billed revenue generated from both sources over the same period of time, the firm would have been able to accurately decide which ad to cancel. Without this crucial step, there is no way to know which advertising media are paying the highest returns.
#4 — How much was spent?This is one of the easiest measurements to keep track of; simply tally the total expenses for each tactic. This includes hard costs associated with running an ad, such as the cost to place a magazine ad or the potential cost of having it created. This step allows firms to link back hard costs with revenue generated. Some marketing tactics are more costly than others, and as good business people know, double-down on the cost effective channels – compared to the return – and let go of the costly non-effective ones.
#5 — What’s the ROI?Marketing return on investment (ROI) measures the gains versus losses associated with marketing and advertising initiatives. This key metric ties it all together. By analyzing where leads are coming from, how they are converting, the revenue they generate, and the total cost of acquisition, firms will be able to better measure the effectiveness of marketing dollars spent. It also allows for the continued optimization of campaigns ensuring firms aren’t wasting their spend on ineffective ads. Investing in a robust ROI evaluation process today will allow for more effective marketing and additional clients in the future. See the expanded guide with illustrations in this free guide!
VIEWS AND CONCLUSIONS EXPRESSED IN ARTICLES HEREIN ARE THOSE OF THE AUTHORS AND NOT NECESSARILY THOSE OF FLORIDA BAR STAFF, OFFICIALS, OR BOARD OF GOVERNORS OF THE FLORIDA BAR.