It’s that time of year again. Holidays are being celebrated, families are gathering together, and legal work is being concluded. In the midst of all that activity and before you plan for 2019, take some time to look back at how your marketing efforts performed. Knowing past performance helps you move ahead with conviction.
The first marketing figure to keep track of is your total marketing cost. If you spend money on different marketing programs such as radio and television advertising, web design and support, billboard ads, e-newsletters, online ads, networking events, or workshops, calculate the cost for each program.
Second, total the number of leads generated by each of your marketing tools. A lead is someone who has inquired about your services. Tracking your leads means acquiring contact information and some information about the nature of their inquiry. Using a client relationship management program will help you effectively keep track of leads.
Next, calculate your conversion rate, the measure of how effectively you convert leads into paying customers. The actual percentage of conversions is not as important as what the figure tells you about each marketing program. It helps you assess the effectiveness of your website, radio ads, e-newsletter campaigns, etc., and the firm’s ability to convert a lead into a client.
Knowing how much you spent to acquire each new client helps you assess your marketing efforts. This figure is called the client acquisition cost (total marketing spent/total clients retained = client acquisition cost). This figure helps you determine profitability. If the revenue the client brings in is greater than the cost, then there is a profit and that marketing program should continue. If the opposite is true and there is a loss, then discontinue that program.
Finally, calculate the return on investment (ROI). ROI is a performance measure used to evaluate the efficiency of your investment in marketing. ROI tries to directly measure the return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of that investment. The result is expressed as a percentage or a ratio.
Calculating the ROI for each marketing effort helps you compare them against each other to determine which are most profitable and which you should terminate or invest more into to increase exposure. Knowing these numbers helps you effectively plan a long-term program to grow your firm.
After years practicing law, Roberta Gubbins served as editor of the Ingham County Legal News. Since leaving the paper, she provides writing services to lawyers ghostwriting content for websites, blogs, and articles. She is editor of The Mentor, the SBM Master Lawyers Section newsletter.
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