5 Ways to Evaluate, Measure & Increase ROI of Your Firm's Marketing & Business Development

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[Excerpted from Survive & Thrive Post-Pandemic: A Guidebook for Legal & Professional Services Providers by Julie Savarino:]

Amid the current uncertainty, many professional services firms and providers are questioning the value of their marketing, business development, client development/sales, client service, and communications (MBDCS) function, investments, and efforts.

Most firms need to save expenses and resources, and they are taking active steps to do so. Yet it should not take a pandemic to assess and evaluate the value of all MBDCS. They should be regularly assessed, reviewed, and evaluated for effectiveness, and not just once a year at budget time. Without strategic efforts to go to market and develop new clients, no law firm or other professional services firm will be around for long.

It is impossible to calculate a precise return on investment (ROI) for anything that is not tracked using metrics. In addition, the ROI of many MBDCS investments is notoriously hard to measure because many marketing and communications investments are designed to build the firm’s image and increase goodwill with clients and contacts. Yet image and goodwill are amorphous, hard-to-assign metrics. As a result, it is hard to measure their ROI with precision. Guesstimates and subjective judgments about ROI are often made but should not be the only way to determine the value and ROI of MBDCS.

Below are some ways to evaluate, measure, and increase the ROI from your MBDCS investments and efforts.

1. Saving money on MBDCS time and effort already invested is a commonly overlooked strategy. How can existing MBDCS efforts be reused to increase utilization, maximize results, avoid reinventing the wheel, and increase leverage and ROI? By using the “res,” i.e., reusing and repurposing, an underutilized strategy for reducing time, effort, costs, and expenses. Even firms that utilize repurposing often do it only on a reactive basis, i.e., only when someone thinks of doing it or has the time. Repurposing existing content can be accomplished by educating all fee earners on how repurposing can benefit them and ways to do so. For example,

  • Review – Check your document management system and old files to find relevant content that can be repurposed, refreshed, reused, and distributed in other ways for alerts, social media posts, checklists, etc.
  • Recycle – For example, popular or existing blog posts or alerts can be refreshed and reused for webinars or social media posts.
  • Refocus – Ask yourself, “What existing content do I/we have that can be reused and sent to other clients, markets, or referral sources?”
  • Reprocess and Refine – For example, record all remarks fee earners make during nonconfidential presentations and transcribe and convert them into written assets to post and distribute.
  • Renegotiate – For example, review high MBDCS costs and expenses, such as listings, rankings, and awards. Reconsider what you pay for and what is mission critical. Survey and assess how valuable decision-makers think each expense is and eliminate those that are not mission critical.

2. Another effective approach to measure ROI on MBDCS is to determine the most important growth drivers for your firm or practice. Commonly used measures are:

  • Changes in revenue, with the goal of all MBDCS being to increase revenues for the firm, practice areas, and offices.
  • Changes in work in process, with the goal to keep it growing consistently.
  • Changes in realization and collections, with the goal to consistently increase the percentage and speed.

Yet these commonly used metrics do not provide precise ROI for the range of MBDCS investments. It is a good time to assess and upgrade the metrics used to measure the ROI of (at least) the most strategically important or highest MBDCS cost centers.

For example, if a large percentage of your annual amount of work comes from existing clients (in the form of more and other types of work), create a procedure to measure the approximate percentage of work you/your firm does from the total available from that client. Most firms and practitioners do not have a system or procedure to regularly measure this critical statistic, and those that do measure it only for their best or key clients. This is a mistake because there is a lot of opportunity with clients who may use you or your firm for one or a few types of work.

3. Having an ongoing and robust pipeline of organic new business opportunities and qualified leads is critical to the continued success of every firm and practitioner.

Most firms do not quantify, track, or measure leads, qualified leads, or the cost of sales, i.e., the time and money spent on non-qualified opportunities. A qualified lead is defined as one in which an existing client, prospective client, or referral source communicates an interest in a legal or other area or topic.

Most often, qualified leads come in the form of questions a client or prospective client asks, such as, “Does your firm have a written cybersecurity policy it recommends?” “Does your firm do FCPA work?” “Are any of your partners experienced in oil and gas?” Clients or prospects ask these kinds of questions because they have (or someone they know has) a need for outside counsel, advice, or representation.

Consider creating a formal client development/sales pipeline that centralizes and tracks all or most opportunities...

Once a need is identified, it needs to be qualified, which consists of an internal review or assessment of the lead, which answers these (and other) questions in the affirmative: “Are there any conflicts?” “Is this the type of client our firm wants?” “Is this the type of legal work our firm wants and does well?” Then, the only way any qualified lead is converted into new legal work for the firm is if someone in the firm communicates directly with the person(s) who expressed the need. A firm lawyer, fee earner, or another firm representative needs to get in touch, stay in touch, respond appropriately and in a timely manner, follow up, and follow through to develop the lead and relationship into new work or a new client.

Lead qualification and relationship development are jobs and responsibilities that, in the past, were traditionally handled by firm lawyers and fee earners, but this is changing due to the time, effort, skill, and discipline these processes take. Consider creating a formal client development/sales pipeline that centralizes and tracks all or most opportunities. This can be accomplished using modern technologies that tie to the firm’s existing time and billing, conflicts, email platforms, and new matter intake systems.

4. Another example is to measure the ROI from the highest MBDCS cost centers.

For many firms and practitioners, the highest cost center (after salaries) is the total amount spent on producing hosting and attending seminars, conferences, and other events. To ensure an ROI from attendance, before approving funding, more firms are requiring fee earners to plan ahead for any conference or seminar they want to attend and to report back in an automated manner on opportunities, leads, and results after attending.

5. Measuring the ROI from websites, blogs, and social media posts is much easier because they live and are implemented online, and the data is already there.

But improvements can be made by creating measurable objectives for any online MBDCS effort in the future. What can be measured?

  • Qualified traffic
  • Conversion of visitors/readers into prospects
  • Engagement: What percentage of the visitors/readers are active in any given period?
  • Qualified marketing leads (MQLs): How many MQLs were generated?
  • Qualified sales leads (SQLs): How many SQLs and MQLs were distributed or sent to fee earners, lawyers, or others to qualify and follow up on?
  • Conversion: How many MQLs and SQLs resulted in new business/sales? How long did conversion take?

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The above is excerpted from the new book Survive & Thrive Post-Pandemic: A Guidebook for Legal & Professional Services Providers by Julie Savarino. Twenty percent of net proceeds from sales of the book will be donated to GlobalGiving, a highly rated international charity.

 

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