ROI – Count your chickens (after they have hatched)

It is not uncommon for me to ask an attorney what the ROI is for each lead source and get a blank stare. Whatever your “spend” is for a lead source, determining just what your return is on each spend can mean the difference between a strong sales funnel and one that is draining your marketing budget and producing less than stellar results. Many attorneys have come to terms with this by simply accepting the fact that their marketing budget is a huge dark abyss that swallows dollars for dinner.

The best way to get this right is to begin with the end in mind and CREATE A PLAN. Determine right at the start what you want to achieve from a particular promotion, marketing or advertising campaign by collecting information from your team.

Next, to help monitor marketing expenses, determine the category the new marketing activity: print, events, sponsorship, promotional, advertising . . . etc. Advertising is typically the highest expense with an ongoing challenge to identify its direct, quantifiable results. Most online publications and online advertising mediums can provide you with analytics but be sure to use phone numbers that you can track for response rate and proprietary URLs too. Each of these categories will tell a story over each quarter helping you decide where to increase your investments and where to back off from spending.

Naturally, knowing your lifetime value of a client will factor into your decision making. A general guideline for determining the effectiveness of a campaign is to make sure our ROI is roughly 4Xs or 5Xs the cost to obtain a client. For example, if your clients are worth $2500, you know you may spend roughly $500 to $600 to obtain a new client. If you are preparing a seminar and your data tells you it will cost roughly $7500 to promote and produce a seminar that you expect will yield 20 leads, 14 prospects and 8 new clients, all that’s left is to do the math.

At $7500, your cost per lead is $375, and each client costs you $937 to acquire. This example may not be your best ROI, yet you can see that you are still experiencing a decent ROI when your lifetime value is at only $2500.

There are other actions to take in this example to improve your ROI but that is for a future post.

It is not uncommon for me to ask an attorney what the ROI is for each lead source and get a blank stare. Whatever your “spend” is for a lead source, determining just what your return is on each spend can mean the difference between a strong sales funnel and one that is draining your marketing budget and producing less than stellar results. Many attorneys have come to terms with this by simply accepting the fact that their marketing budget is a huge dark abyss that swallows dollars for dinner.

The best way to get this right is to begin with the end in mind and CREATE A PLAN. Determine right at the start what you want to achieve from a particular promotion, marketing or advertising campaign by collecting information from your team.

Next, to help monitor marketing expenses, determine the category the new marketing activity: print, events, sponsorship, promotional, advertising . . . etc. Advertising is typically the highest expense with an ongoing challenge to identify its direct, quantifiable results. Most online publications and online advertising mediums can provide you with analytics but be sure to use phone numbers that you can track for response rate and proprietary URLs too. Each of these categories will tell a story over each quarter helping you decide where to increase your investments and where to back off from spending.

Naturally, knowing your lifetime value of a client will factor into your decision making. A general guideline for determining the effectiveness of a campaign is to make sure our ROI is roughly 4Xs or 5Xs the cost to obtain a client. For example, if your clients are worth $2500, you know you may spend roughly $500 to $600 to obtain a new client. If you are preparing a seminar and your data tells you it will cost roughly $7500 to promote and produce a seminar that you expect will yield 20 leads, 14 prospects and 8 new clients, all that’s left is to do the math.

At $7500, your cost per lead is $375, and each client costs you $937 to acquire. This example may not be your best ROI, yet you can see that you are still experiencing a decent ROI when your lifetime value is at only $2500.

There are other actions to take in this example to improve your ROI but that is for a future post.

Building Better Business Systems For Law Firm Owners