Law Firm Marketing Numbers You Need to Know

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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