For more great articles and FREE attorney resources visit us: www.Valtimax.com
How do you evaluate law firm marketing investments?
How do you decide if you should sponsor an event, place an ad in a trade magazine or join a referral service?
The best way to make this decision is to look at the potential Return on Investment from each initiative.
There are three things to take into account when looking at Law Firm Marketing ROI. They are:
These are all complex ideas which must be covered in detail but here is a brief summary:
Target Client and Referral Source Profile
If you are targeting consumers (family law, criminal law, immigration) your approach to marketing will be different than a lawyer who is targeting companies as a client. Once you know who your ideal client is, it becomes easier to attract them with your marketing.
Referral sources are important to all lawyers and you must market to them as heavily as you would market to a prospective client. This marketing should be measured in exactly the same way as you measure direct-to-client marketing initiatives.
Lifetime Value of the Relationship
Once you have attracted and engaged a client or referral source, how much is that relationship worth to your law firm?
A client (or referral source) who brings you 10 matters each year for a value of $100,000 per year is worth far more than 100 clients who bring you one matter valued at $1,000 during your lifetime relationship with them. You can spend more to attract the client with 10 matters per year because you will receive a better return on your investment.
Knowing this lifetime value number is critical to determining how much to invest in marketing. High value targets can withstand significant investments.
Cost of Acquisition
What is it going to take to attract this client?
As stated above, you can spend more to attract better clients. But knowing what it is going to cost to do so is important. If you are targeting corporate clients, there is a good chance they already have a lawyer. It is much more difficult to unseat the incumbent in the relationship than it is to establish a business relationship with someone who has no lawyer.
Understanding client acquisition cost is important to determining your marketing budget.
We just touched on these important metrics. Give them some thought.
How will they impact your law firm marketing decisions?