Best of the Rainmaker Minute 2009
Each week I send a brief article on Business Strategy to my clients and a select group of VIPs in my database. Some of the articles get a bigger reaction than others. Below are the five articles that have generated the greatest response from my readers this year.
If you missed one of these articles, be sure to read it now and send me your feedback. Love it or hate it, there is a lesson in each one.
Number Five: Have You Had an Ethical Enema?
Hourly billing is going away. If you are billing your clients by the hour you are doing yourself a disservice and your clients hate it. If you don’t find an alternate billing methodology someone else will be working with your clients in the near future.
Click Here to Read the Article
Number Four: The Foundation of Business Development
Want to know how to set up a law firm marketing plan? Read this article. It details the four groups you must engage. Suspects, Prospects, Clients and Evangelists.
Click Here to Read the Article
Number Three: The Two Killer Qualities
There are two qualities that will help you CRUSH your competition when it comes to building a productive, profitable law practice that helps you live the life you have always wanted.
Click Here to Read the Article
Number Two: What You Should Learn from Tiger Woods
Tiger is being accused of sleeping with everyone who ever watched golf on TV and we take advantage of his situation to learn a thing or two about business.
Click Here to Read the Article
Number One: How I Got So Fat
You loved it when I told you how my waistline grew with my income. Will you watch as I take the weight off in the New Year?
Click Here to Read the Article
All things considered, 2009 was a great year – mostly because I shared it with you. Thanks for joining me each Wednesday. I hope you check with me each week as I rant, rave and share my thoughts on Rainmaking with you in the New Year.
Print
EmailLaw Firm Marketing Numbers You Need to Know
Law firms of all sizes need to look at three numbers to determine the overall health of the firm’s marketing efforts. Those numbers are:
1). The client lifetime value for each client that works with the firm.
2). The return on investment of the firm’s marketing dollars
3). The average cost of acquisition of a new client.
Here’s how you calculate those numbers:
Client Lifetime Value
Calculate the total amount of dollars you have billed to the client. Add in the referral business this client has brought to your firm over the years.
Divide the total dollar amount by the number of years they have worked with your law firm.
Return on Investment
Take the amount you have made as a result of a particular marketing tactic or campaign and divide it by the amount of money you invested in employing that marketing tactic.
Return on Investment (ROI) is calculated at the tactic/campaign level.
Client Acquisition Cost
Client Acquisition Cost is calculated at the enterprise level. In other words, you should track the overall client acquisition cost for your entire law firm. To calculate the client acquisition cost you take the amount you invest in marketing and divide it by the number of clients.
There is a dirty little secret to successful marketing that many law firms do not understand. That secret is: If you cannot measure it, you shouldn’t do it.
When it comes to marketing, if you cannot measure the results, you should not invest the dollars in the marketing campaign.
Can you measure the number of people who read a Yellow Pages ad?
Can you measure the number of people who see a sign on the side of a bus?
If you can’t measure it, don’t do it!
If you’d like additional details or if you need help with you marketing, please call our office at 888.692.5531
How and Why to Develop a Marketing Plan for Your Law Firm
Does a Law Firm Really Need a Detailed Marketing Plan?
Yes, it really does.
Would you go into litigation without first having a complete understanding of your client’s needs?
Of course you wouldn’t.
Doing so would be a waste of your time and a waste of your client’s time and money. And it would probably lead to disaster.
In the same way, law firms need to develop and develop a detailed marketing plan before spending time and money on marketing efforts that may not get them to their desired set of outcomes.
I am always surprised to hear just how many attorneys and try to market their law firms without a plan. Many lawyers try not to think of themselves as being in a sales related business; the simple fact is that they are.
Law firms sell legal services. This truth does not negate the quality of the legal services you offer, but it cannot be ignored if you are going to build a successful practice.
Marketing is the cornerstone of any successful sales related business. Without clients, there is no cash flow. Without cash flow, there is no firm.
Marketing connects you to clients. A detailed marketing plan helps to ensure that this initial connection turns into a relationship that is beneficial to both the firm and the client.
Since marketing is so critical to business, there are countless theories available about marketing, branding, positioning, client emotions, and the list goes on and on. However, when you pull back all the layers, the basics of how to build a strong legal marketing plan remain the same.
Let’s take a look at how and why attorneys and law firms - particularly small law firms and solo law practices - develop a marketing plan.
Good Marketing Begins with Good Research
Before you start your marketing efforts, you have to know where your firm stands in the marketplace. This means research. Get to know the competition. What are they doing in terms of price, advertising, and branding? What services do they offer?
Find out what your clients think of you. Do you have a reputation that works for your firm or do you need to rebrand yourself?
Look closely at all the services you offer and the ones that you don’t. Are you missing an opportunity to create a niche in a particular market? Are you stretched thin because you are offering too many services? Are you not getting clients in the door because you’re not offering the services that are most needed in your location?
Clearly Define Your Firm and Its Objectives
Before you start marketing, it is important to know exactly where you want your firm to go. Think about why you started this firm in the first place. What goals did you have in mind? Define all of your major goals, the financial and the nonfinancial alike. Working as a lawyer to make the world a better place is admirable, but you will only be able to continue to provide your services if you have enough money coming in to pay the bills. Financial goals are just as important as the nonfinancial.
Decide on what to specialize in. Almost every attorney and every firm will serve themselves well by defining a niche in their market. The long term effect of specializing is that you are able to position yourself as an expert in a certain area of law. The only time this is not a good plan is when there are simply not enough clients in your geographic region for specializing to make sense. If you are the only lawyer in a small rural area, then generalizing may the most effective way to maintain a steady flow of clients.
Decide how you will brand your firm. Who are you and what makes you unique? Why should a potential client choose your firm? These are questions you need to answer for yourself before you can proceed in your marketing efforts. Knowing and believing in what it is that sets your firm apart will inform all of your marketing decisions and your client interactions.
Think about what types of clients you want to attract. Who will you market to and why? What qualities do you want these clients to possess? Do you want to attract the client who is only looking for the best deal? If you are in a market where there is an overabundance of clients looking for the type of services you offer, then this may be a fine option for you. Just remember that clients who are only looking for the best deal may decide to leave your firm if they find a cheaper option.
Develop a Detailed Marketing Budget
Your firm’s marketing budget should be approximately 7-8% of your overall budget. If you have not been doing any marketing at all or if you are new to your geographic area, then this may be more in the beginning. Your marketing budget needs to include the cost of research, public relations, press releases, client retention programs and any specific advertising space that you buy rather it be in local magazines, television, or radio.
Make wise choices about how to spend your advertising dollars. Using it all on one commercial during the Super Bowl may not get you the return on investment that you’re looking for. Spending money to increase the services you are providing to existing clients is a very smart way to use your marketing dollars.
You will need to decide whether or not to utilize the services of a marketing firm. Depending on the size of your firm, most marketing can be managed in house, either by the lead attorneys or by an on staff marketing person or marketing department. More and more marketing firms who specialize in legal marketing are springing up every day. If you do choose to use a marketing firm, choose one that specializes in legal firms. Choosing an attorney is not like choosing a soft drink. Your run of the mill marketing firm may not be able to provide you with services that fit your unique needs.
Marketing Plan Maintenance
Like any good plan, a marketing plan is only useful if it is put into place. Be sure to review your plan including your overall goals at least once every quarter. Make adjustments along the way to ensure that you don’t get off track. Evaluate your ROI or return on investment to make sure that your marketing budget is making money for your firm.
