Understanding Marketing KPIs
Too many attorneys are practicing random acts of marketing.1 They are networking, writing and speaking, posting blogs, running a Facebook page, a LinkedIn group, and tweeting at every chance. It is exhausting!
To Drive Results
Worse: they have no idea what’s working and what isn’t. They don’t know what adjustments they need to make, or where to invest to get a better return on their investment. They are flying blind.
It’s time for law firm owners to be intentional with their marketing. This requires creating clear goals, measuring success of campaigns against those goals, and adjusting to make improvements. Let’s get you started down the right path.
How can we possibly decide if something is working if we have no idea what we were trying to accomplish in the first place? Goals clarify the objectives and tell us when and what to adjust.
Companies who set marketing goals are more likely to see success. According to research by Coschedule, “marketers who set goals are 376 percent more likely to report success than those who don’t. And 70 percent of those successful, goal-setting marketers achieve them.”2 Bottom line: don’t skip this important step.
Understand that different marketing activities have different objectives. Is the goal to grow brand awareness? To drive new traffic (or leads) to your firm? Or, to encourage qualified leads to connect with you for a sales call? The first step is to be clear on the overall goal for the marketing activity. After all, it isn’t fair to say that a blog post didn’t result in new clients when that wasn’t its intended purpose (blog posts are great for generating new traffic, but often don’t actually convert those leads into clients).
Next, set S.M.A.R.T. goals both for your overall marketing strategy and for each type of marketing activity. That is, goals should be specific, measurable, attainable, relevant, and time-bound. Ask yourself “do I know what must happen and when for this goal to be achieved?” “Is it a bit of a stretch, but not so big I’ll never reach it?” Great! You’re on the right track.
In the example above, you may want your overall marketing strategy to generate 10 new clients with X case type each month. Part of that strategy includes creating one weekly blog post resulting in 100 new website page views.
Metrics That Matter
With S.M.A.R.T. goals in hand, it should be easy to create metrics to measure success along the way. Unfortunately, many attorneys are not monitoring or measuring their marketing activity’s impact and therefore lack the data they need to make sound decisions. The results reported in the 2019 ABA Marketing Survey are telling (and quite frankly, unacceptable). Only 38 percent of respondents said they have access to analytics or reports to monitor the website or blog’s effectiveness. 41 percent reported not having the information while 21 percent didn’t know if they had the information.3 Worse, only 17 percent of respondents indicated that they work with an external agency who provides regular reports on marketing performance. Another 11 percent reported using external agencies but not receiving regular reports.4 You are paying these agencies for this work. How can you possibly hold them accountable without seeing how they are doing? Please, insist on receiving this data!
Key Performance Indicators (KPIs) are the data that help you quantify your marketing efforts and tell you how you are doing vis-a-vis your goals. KPIs can measure your overall marketing generally or tell you specifics about each campaign or tactic. Let’s break down some of the top marketing KPIs.
Cost Per Lead (CPL) –> the amount spent to acquire a new lead (a person/company that may become a client). If a firm spends $1,000 on a pay-per-click (PPC) campaign and 10 users convert to leads:
Cost per lead = $1,000/10 = $100
Your ultimate goal is to minimize your cost per lead. Campaigns that have low costs per lead and generate a high volume of quality leads are considered successful. Keep in mind that the total amount you should be willing to spend on a lead may vary depending on the lifetime value of the client (how much revenue the new client generates throughout its lifetime). If you have a low-fee high volume business, you may not be willing to spend the same amount on a lead as a firm that provides very high-end services.
Conversion Rate –> the percentage of people who take a desired action or interact with your marketing activity. You might have multiple conversion rates for a single activity type.
For example, you may track how many visitors land on your firm’s landing page and sign up for your email newsletter. If 50 people visit your website and 5 of those request your email newsletter, your landing page has a conversion rate of 10 percent. In essence, your landing page is 10 percent effective.
If you then send your email newsletter to 500 people offering a new service and 25 clicked through to sign up for your offering, your conversion rate on that email was 5 percent.
Make sure you track your conversion rates for how many qualified leads contact your firm and how many ultimately hire you. Tracking conversation rates for each step of the process allows you to see what is working and what needs tweaking.
At a minimum, consider tracking:
- Potential calls/contacts
- Number of consultations booked and held
- Number of engagement letters signed
Client Acquisition Cost –> for this, divide the total costs spent on the marketing activity by the number of new clients acquired during the period the money was spent.
For example, if a firm spent $1,000 in a year on its marketing activities and acquired 100 new clients, its client acquisition costs equals $10.
Ideally, you’ll want to keep this number as low as possible. If you are just starting out, aim to keep this at a 3:1 value-to-cost ratio. In other words, make sure that the cost to acquire a new client is at most about 33 percent of the total lifetime value you expect to generate from this client.
KPIs In Action
With a basic understanding of some key metrics, don’t forget a few key points.
First, don’t go overboard collecting data. Yes, KPIs are exciting, but sometimes attorneys get so sucked in, they get lost collecting data and never do anything with it. Pick a few key numbers that really matter based on your goals. Track those numbers and make adjustments. You can always add more metrics later.
Don’t forget your time counts! Your time is valuable and the time you spend on the activity (going to lunches, writing content, etc.) counts toward your overall marketing costs. If you bill at $350/hour, consider a little less for marketing activities ($250/hour). If you spend 4 hours each week writing blog content, add $1,000 to your blog marketing costs. Completing this analysis for each activity will help you evaluate your marketing costs more accurately.
Finally, don’t just review the numbers. The key is to use them to experiment, test, and make smart decisions. Once you see what’s working, put more resources towards that activity and improve upon your results. Or spend less and make some tweaks until it is working. The ultimate goal is to learn what levers you can pull to positively impact your firm. Good luck and happy marketing! ●
ABOUT THE AUTHOR
Stephanie Everett leads the Lawyerist community and Lawyerist Lab. She is the co-author of Lawyerist’s new book The Small Firm Roadmap and is a regular keynote speaker at legal conferences and CLEs. Stephanie practiced at a big law firm for five years before co-founding her own firm. As the managing partner, Stephanie watched her firm grow from two lawyers to a team of twenty in just seven years. Her passion for owning and operating a law firm eventually led her to open a consulting practice, where she focused on helping lawyers learn how to run their own firms. From there, working with the State Bar of Georgia, the Georgia Supreme Court, and Georgia’s five law schools, Stephanie designed and launched Lawyers for Equal Justice, an incubator helping newer lawyers start socially conscious law firms.
1 Shout out to Allison Shields who coined this term on Episode #48 “Random Acts of Marketing: Allison Shields and the 2019 ABA Marketing Survey” of Clienting with Kelly Street and Gyi Tsakalakis originally airing December 23, 2019.
3 2019 ABA Marketing Survey
4 2019 ABA Marketing Survey