9/23/09

Keys to Effective ROI Measurement

Value for the money. You expect it when you lease an office, invest in software or hire staff. The money you spend marketing your law firm should be no exception. Is your firm getting good value for its marketing dollar? If not, where are the opportunities for improvement?

Measuring return on investment, or ROI, from your marketing budget can help you gain better answers to those questions.

ROI measurement is an opportunity to review your marketing practices and make smart, informed decisions about the future — which tactics to emphasize, what’s working and what’s not, and whether your message is connecting with prospects or need to be fine-tuned. And you don’t need a marketing degree to do it.

These steps will help you generate ROI information and use it to evaluate and improve your marketing strategy.

1. Measure all marketing programs What strategies — print, broadcast, online and in-person — do you use to connect with prospects and clients? In order to gauge which strategies to leverage and which are falling short, you should define and track each of them.

Start with brochures, Yellow Pages ads, radio spots, web campaigns and other direct marketing expenditures. But don’t forget other programs that may indirectly generate new business and strengthen existing client relationships: sponsorships, client entertainment and professional memberships, for example.

Once you have a handle on all the promotional efforts that generate leads for your firm, you have a good foundation for measuring ROI.

2. Track leads and conversions Firms that market themselves efficiently use documented, common-sense controls to track spending. Hard data goes much further than anecdotes and guesswork in ensuring your money’s well spent.

So once you’ve defined the scope of your marketing effort, put tracking procedures into place for each program — sustainable procedures you can incorporate, long-term, into your practice management. For example, you can:

  • Assign your receptionist to record telephone inquiries.
  • Create a new-client information sheet to track word-of-mouth referrals.
  • Collect business cards from meetings and speaking engagements, then record them and follow up.
  • Place a client intake form on your web site and make it accessible from every page.

Try to capture the same information from prospects no matter how they reach your firm. Your receptionist, for example, should ask prospects the same questions that appear on your online intake form. By being consistent, you can better compare the quality of leads coming from online, print and other marketing efforts.

Documenting inquiries shows you which client-development programs are successful and makes follow-up easier. It also helps identify any disconnect between leads generated and leads converted into actual client cases.

If “hits” to your web site aren’t translating into new business, for example, look critically at your site. Is your intake form clear and simple? Overall, is your site easy to navigate? Timely follow-up is another key factor. Are you responding promptly to inquiries with both a phone call and an e-mail, if possible?

3. Leverage the web A law firm’s web site can be its most powerful ROI measurement tool. That’s why a growing number of firms prefer to route all client leads through their site.

To make the most of your web site, feature your URL on business cards, ads and in other promotional efforts. Consider purchasing exposure on legal directories and search engines. And ensure that once prospects arrive at your site they can easily find key information, then connect with you to follow up.

One advantage of a web-centric approach is that you can use software programs to analyze site traffic. These programs often are included when you sign up with a web site provider. They can help you determine:

  • The most popular areas of your site.
  • Where visitors arrive from — and what sites they visit when they leave.
  • Keywords and key phrases that drive prospects to your site via search engines.

That’s invaluable information for sharpening your marketing strategy. You might choose to purchase ads on your prospects’ favorite sites, for example. Or edit your promotional materials (print, online and broadcast) to stress high-impact, business-generating keywords.

Whatever decisions you make, with ROI measurement tools you can base them on objective, long-term data. The kind of information that chance conversations with clients, or the occasional one-off report, can’t provide.

4. Measure impact. To accurately measure ROI, take both the tangible and intangible benefits of your marketing efforts into account.

You can crunch the numbers by calculating the dollars earned by an ad or other promotion versus its cost (factoring administrative time and other “hidden” expenses into your total investment):

Amount of $$ Earned - Investment x 100 = ROI (i.e., 400% or 4:1)
Investment

Of course, ROI is not an exact science. Some strategies — volunteer efforts, sponsorships, community outreach — may score low in stark financial terms but still deliver for your firm by generating new leads, or rewarding clients for past business. They build name awareness, strengthen relationships and create goodwill, all of which are important factors in ROI-based decision-making.


5. Evaluate options. With ROI data in hand you can make informed comparisons between your client-development activities. One program may drive a high quantity of leads to your firm while another delivers great quality (a higher rate of conversion or larger, high-value cases). Your journal ads may primarily reach the corporate market while individuals find you online.

That information, plus other factors like how easy the program is to administer, will help you set priorities when you write your next marketing plan.

Be sure, however, that you’re making consistent, “apples-to-apples” comparisons. Choose the same 3-month or 6-month time frame, for example, when you run ROI numbers on print vs. web vs. broadcast and beyond.

6. Modify your marketing The final step is implementing change. Use ROI-generated information to adjust your marketing strategy: to invest more where you’re seeing results and trim back or rethink what isn’t working.

Of course your practice goals change and so will the needs of clients. A marketing program or keyword that draws attention today may go cold six months down the road. ROI measurement — track, evaluate, then modify — is an ongoing process.

That takes commitment, but the payoff is there for your firm. In a more efficient lead-development budget, a better understanding of your client base and a bigger return on your marketing dollar.

1 comment:

Jedi said...

My feeling is that the most cost effective means of marketing a law firm is to get your website into the top 10 for Google. The processes of making your website number one in search engines is called “Search engine optimization” or SEO.

My own research at http://www.bergstrom-seo.com indicates that you can expect 1.5% of the people that come to your law firms website via a relevant Google search will become clients. This might not seem too impressive, but remember that the average bill for a contested divorce is over $15,000. Thus, the average client that visits your website generates $15,000 x 1.5% = $225.

I always have to do the calculation a few times because it seems too unbelievable. Even if you want to have a ROI on your marketing investment of $10 in revenue for every dollar spent, you can still spend $22.50 on every visitor. So, let’s back up once more…. If you spent $2,250/month on Google SEO, then you only need to get 100/month to get an acceptable ROI on your investment. I generally find that clients who have a monthly SEO budget of 2,000 can expect to see an additional 2,000 visitors/month after about one year. This works out to an additional (2000 x 1.5%) = 30 clients/month. It’s almost too good to be true.

If you’d looking for a good how-to document that describes almost everything you need to know, then check out this PDF.: http://www.bergstrom-seo.com/resources/google-search-engine-optimization-starter-guide.pdf. It’s a pretty long document (22 pages) but it tells you everything that you need to know about SEO. Good luck!