Law firm marketing costs are always growing, but many firms are still spending money blindly. Fortunately, you can gain real insight in your law firm marketing budget out of the data you already collect.
There is no one-size-fits-all law firm marketing plan. But by tracking your Key Performance Indicators (KPIs), you can understand which marketing expenses are worth it and which ones are wasteful. This information helps you focus on the strategies that work for your practice area and clientele, and frees you up to innovate and try out new marketing techniques.
Here’s how you can start leveraging your KPIs today:
8 best practices to collect and deploy law firm marketing KPIs:
1. Use automation to track your numbers
You can only analyze the data you track. But without automation software, it can take a tremendous amount of time to gather and crunch all the numbers. Data entry is repetitive and tedious, and important details are often left out, skewing the final result. And once you fall behind, it’s even harder to catch up.
That’s why firms are turning to technology to automatically track their numbers. With lead tracking systems like Lead Docket, you can easily generate the charts and graphs that will guide smarter marketing decisions.
With its seamless integration with Filevine, Lead Docket automatically pulls data from your case files. That means you’ll be able to analyze not only how many leads and new cases you’re seeing from each marketing campaign, you’ll be able to compare that with the final revenue generated from each matter. This will give you detailed insights you need for the long-term financial health of your practice.
Find a tracking system that works for you. Make sure it can give you the KPIs listed below with a minimum of data entry and effort.
2. Learn how leads found you
To connect your marketing expenses to final outcomes, you must understand how a client heard about you.
One method is asking. Make sure that a standard part of your intake process is asking potential clients how they heard about you, and that the answers are stored in your case files. This will include not only traditional marketing sources, but also referrals from their friends or other attorneys.
Sometimes clients might forget all the steps they took on their pathway to your practice. Technology can sometimes offer a more reliable answer. When you offer online intake forms and chat boxes, you have your own record of contact. You can also create dedicated landing pages or special tracked phone numbers for specific marketing campaigns. And market attribution tools like Google Analytics will help you learn how visitors found your website (whether they came right there, followed up on an organic search, or clicked a link somewhere else).
3. Analyze your revenue by marketing source
Once you know your marketing expenses, how clients found you, and your final case revenues, you can analyze revenue by marketing source. This will show you which sources bring in the bulk of your revenue. Pay attention to how it changes over time.
In addition to your traditional marketing sources, this KPI should show you how much revenue you’re getting through clients referred to you from other attorneys or from the clients’ friends. Low levels here indicate the need for a greater investment of time and attention on gaining referrals.
Within Lead Docket, you can reach this KPI in the revenue by marketing source report, which puts your numbers in a helpful bar graph. This KPI and all the ones I write about below are in that same report, giving you a fantastic overview of your marketing wins and losses. To reach it within Lead Docket, simply click reports, then click ‘revenue by marketing source this year.’
4. Compare ROI by marketing source
Revenue alone doesn’t indicate which marketing sources are most successful. Large revenue sources might be eating up an inordinate share of your marketing budget, while smaller sources are actually generating revenue more efficiently. You don’t know until you compute the ROI.
The ROI (return on investment) is computed by subtracting your marketing cost from the revenue it generated, and then dividing that by the cost. The final number, listed as a percentage, shows how hard your marketing dollars are working.
ROI= (Cost of Investment / (Final Value of Investment - Initial Value of Investment)) x 100
The ‘revenue by marketing source’ report within Lead Docket automatically computes your marketing ROI by comparing marketing expenses with the case outcomes it pulls from Filevine. Sources with high ROI likely deserve more attention and investment. Consistently low ROI indicates campaigns that should either be improved or scrapped.
By using ROI to shape your marketing budget, you can improve your revenue without increasing costs.
5. Follow the conversion rate
The conversion rate is the percentage of those who engage with a marketing source who go on to become leads. Improving the conversion rate can dramatically increase your revenue.
It’s also a useful number to help you test out new changes and improvements. If you redesign your website, it will take months or even years to fully learn how that affects your revenue. But you can see right away how it changes your conversion rate for website visitors.
Conversion rate = (the number of conversions / the number of interactions) x 100
If 100 people look at your website and 10 become leads, your conversion rate is 10%.
For marketing efforts, you want to focus on the conversion of ad viewers to leads. To analyze your intake process, you should track the conversion rate of leads into clients.
6. Track the cost per client
The client acquisition cost tells you exactly how much it costs to gain one client through a specific marketing source. Like your conversion rates, this is an early indicator of the success or failure of your marketing strategy.
Cost per client = number of clients from marketing source / cost of that source
You can also track the cost per lead, and analyze the difference between what you’re spending on leads and how many of them become clients. If you have a low cost per lead but a high client acquisition price, that could mean two things: either you’re not following up sufficiently with your leads and they’re signing with other firms, or your strategy is bringing in low-quality leads. Some firms spend huge amounts on lead generation programs. But when they follow up, those endless lists of new leads dwindle to nothing. Keeping an eye on your cost per client will help you avoid these costly mistakes.
On the other hand, when the cost per lead is closer to the cost per acquisition, you’ve found a marketing source that delivers high-quality leads. Not only does this build revenue, it cuts down on the efforts wasted by your intake staff on fruitless follow-up.
7. Set a regular cadence to check KPIs
To make sure that KPIs are able to guide your marketing decisions, schedule a regular cadence to view the report.
How frequently should it be? This depends on the nature of your firm and the goals you are setting. Most firms should check their numbers monthly or weekly, but some may need to check them only once a quarter. Some firms that are running more aggressive and innovative marketing campaigns review their metrics daily.
Whatever the cadence is, make it routine. Set a recurring event on your calendar to analyze the numbers. Pay special attention to new marketing campaigns, to catch how your numbers might be changing.
8. Set goals and follow through
Once you have a clear understanding of your KPIs, you’re better equipped to improve them.
Where should you begin? If you’re using Lead Docket, take advantage of its built-in tools to help legal professionals ‘close loops’—turning marketing campaigns into leads and leads into clients. Before throwing more money into marketing campaigns, make sure you’re giving adequate attention to the leads that come to you. With faster and more consistent follow up, you can turn more leads into clients, increase revenue and ROI, and drive down your client acquisition cost.
Marketing KPIs also tell you when it’s time to revamp your website design, improve your SEO, and update your ad copy. But whatever new methods you try, your KPIs will guide you toward success.