From now until the end of the year, I will be sharing the 12 best legal marketing lessons from this blog, choosing what I think is the most beneficial post from each month in 2014. Each one of them can help you improve your legal marketing in 2015.
From November 2014:
How to Determine Your Budget for Legal Marketing
Implementing an under-funded legal marketing plan is just as bad as not using any marketing plan at all. This is because of the Law of 7 Touches – which means that it takes 7 to 10 meaningful “touches” to move someone through the sales process to get them to the point where they are ready to buy from you.
If your marketing plan only has enough money behind it to produce a couple of meaningful touches, it will be almost as if you never touched prospects at all because it won’t break through all the other marketing efforts made by other attorneys vying for that person’s time and money, including your biggest competitors.
So how much do you need to spend for marketing your law firm?
There are several things you need to consider when setting your legal marketing budget:
Your practice area. Some practice areas require significantly more time and money to market, like litigation and personal injury.
Your profit margins. The larger your margins, the more you can invest on marketing and new business development. Some practice areas have bigger profit margins (litigation) while others have notoriously low profits (insurance coverage and residential real estate).
Your annual revenues. It is not unusual for successful law firms to spend between 15% and 40% of their annual revenues on marketing and business development.
Your target market. Any time you are marketing directly to consumers, your marketing budget must be bigger because of the intense competition for consumer’s attention.
Your market area. For many professional service firms, like doctors, lawyers and accountants, it is usually limited to up to 25 square miles.
Your competition. Analyze your competition—are there lots of you vying for the same business or just a few? What kind of marketing strategies are they using? How are they positioning their firm? If you have to compete with lots of other firms for the same target market, you will need a bigger budget.
Your systems. In general, the better systems you have in place for implementing the plan, the less money you have to use. For example, if you use direct email marketing as part of your plan, you can reach potential clients with greater frequency at a low cost.
The typical marketing cycle. How long does someone take to make a decision after they have gathered all the information they need? Is it measured in minutes, days, weeks, or months? The longer the marketing cycle, the more money you need to spend on marketing because after you have given them the information they need, you still need to stay in touch with them.
Your average sale. How much does your average client spend with you? $500? $5,000? $500K? $5 Million? Typically, the higher the price tag, the more you need to educate your client as to the benefits of your services and provide more evidence of your credibility.
The lifetime value of your average client. How much does your average client spend with you over a given timeframe? If they spend $1,000 a month with you annually, and the average client stays with you for three years, then the average customer is worth around $36,000 to you. If you know that, you know how much you can afford to spend on landing each client before it starts to negatively impact your profit margins. If your average client only makes one “purchase” from you and never comes back, then you will need to use lower cost marketing strategies to reach them.
Once you have figured all this out, you’ll have a good idea of what you need to adequately fund a marketing plan for your law firm.
We are now providing one of our most popular seminars – Knowing the Numbers That Run Your Law Firm – in an on-demand format, so you can watch and learn at your convenience, as many times as you wish.
Over the last decade we have helped over 10,000 attorneys market and grow their business. During this time we have identified many of the key characteristics of highly successful law firms.
One of the more consistent ones is that they track specific numbers and key indicators that give them instant insight into how their law firm is performing on a weekly and monthly basis.
Key Performance Indicators (KPIs) are the numbers that make your law firm run. By analyzing these critical metrics, partners and owners of law firms can easily determine whether they are on track to achieve their goals or if they need to retool and refocus their marketing and business development efforts.
In this fast paced seminar, you learn:
- How to easily identify the 12 key metrics your law firm needs to track and measure
- How to set up a system to identify these numbers
- The 7 critical systems every law firm must have
- CPL and CPC: the 2 most important numbers every attorney must know in order to succeed
- How to avoid “paralysis by analysis” and being overwhelmed by too much data
- Delegating roles and responsibility to your staff
- Using software to track your KPIs
If you’re a spreadsheet and data driven individual then you will love this seminar! However, if numbers scare you or you tend to ignore them because you have a hard time making heads or tails of all the different data you see, then this seminar is a “can’t miss” event!
We cut through the clutter and give you clear and easy to understand guidance on which numbers really matter the most, how to track this information, and what to do with it once you have it!
To get this on-demand seminar, click on this link: Knowing the Numbers That Run Your Law Firm.