Measuring and monitoring business performance is critical to the success of your law firm, and there are dozens of KPIs that can be used by marketing professionals.
But first, what is a KPI?
A KPI, or Key Performance Indicator, is a piece of quantifiable data used to evaluate business performance success. For example, in marketing, we use KPIs to help us identify specific objectives of a campaign, indicate progress during and measure effectiveness at the end of a campaign.
Not sure where to get started? We’ve identified five essential digital marketing KPIs that you should add to your reporting arsenal right now.
1. Click Thru Rate
Click thru rate (CTR) is the percentage of impressions that result in a click. For example, if your campaign receives 100 impressions and five clicks, your CTR is 5%.
CTR can be used to gauge success in many aspects of digital marketing, including emails, social media, and paid digital ads. CTR tells you what messaging works – and what doesn’t. A higher CTR means that users found your content highly relevant, while a lower CTR means that users found your content to be less so.
There isn’t necessarily a target percentage that you should be hitting with your CTR. Instead, use this KPI to compare the performance of your campaigns and learn how to speak to your audience over time.
2. Engagement Rate
Engagement rate measures the amount of interaction your social media content or email campaigns gain relative to how far it reaches your target audience. This can include metrics like comments, shares, or click-thru’s.
There are a few ways to dive into engagement rate. (This article from Hootsuite offers a deeper dive.) To begin, start by looking at engagement rate by reach, which takes into account all the possible engagements (likes, clicks, shares, comments, etc.) relative to the total number of impressions. For example, you may have 100 impressions on a social media post, but 3 comments, 20 likes, 2 shares, and 1 click-thru. This means that your engagement rate is 26%. The benchmark for your engagement rate will vary depending on the platform.
Measuring your engagement rate is important for letting you know how well your content is being received by your audience. Your engagement rate can also help to inform your future content strategy and your messaging.
3. Marketing Influenced Customers
Marketing influenced customers (MIC) is the total number of new customers, or clients, who interact with your marketing divided by the total number of new customers within the same period.
If you have 100 new customers in a month and 70 of them interact with your marketing campaigns, your MIC percentage is 70%.
Much like CTR, there isn’t a set benchmark percentage that you should be hitting with your MIC. So instead, use this metric to help in fine-tuning your marketing strategy.
Since marketing often works interchangeably with business development (or sales), this metric indicates marketing’s influence in the BD process. MIC demonstrates how effective your marketing strategy is in nurturing fresh leads and whether the campaigns are getting noticed or failing to create the desired impact.
4. Referrals In, Referrals Out
Many attorneys work hard to cultivate referrals as a significant source of business. Evaluating the number of referrals that come into your firm versus the number of referrals you sent out to other law firms or related professionals can indicate whether or not your networking efforts are paying off.
There is no “one size fits all” number of referrals that should come in or out of your law firm. These numbers will vary not only from firm to firm but also from practice area to practice area or attorney to attorney within the same firm. Some law firms, such as consumer-facing plaintiff firms, may have more referrals in than a corporate M&A firm.
Marketing and business development departments should work with together and with firm leadership to define a goal for referrals in and referrals out and a way to track whether or not those goals are met.
For example, if a partner attends 5 bar association networking events to grow their relationships with other attorneys, maybe that partner would set a goal for their practice to receive three referrals in and give two referrals out.
5. Return On Investment
Return on Investment (or ROI) is one of the most important metrics for law firm marketing and business development departments.
ROI tells you the profit or loss of your marketing efforts by following this formula:
ROI = ((revenue – cost) / cost) * 100
Your law firm invests a lot of time and money in marketing efforts and it’s crucial to your business operations to measure loss so that you can properly forecast marketing expenditure in the future.
BONUS: Intake Rate
For law firms, intake rate is the number of new clients that have reached out to your firm via phone, website, email, or chat divided by the number of impressions. For example, if you have 100 impressions or leads, and 30 of them contact the firm, becoming clients, your intake rate is 30%.
There isn’t a benchmark intake rate percentage that your firm should be hitting. Instead, your firm should use this metric to indicate how successfully your overall strategic marketing plan generates leads and drives new business.
Measuring your intake rate can help you understand which initiatives are attracting more leads, which channels are outperforming others, and where you should update your messaging. For example, maybe your social media initiatives are getting 100’s of impressions and zero qualified leads, but your google ad campaigns result in the lion’s share of your organic intake rate.
BONUS: Email Bounce Rate
Email bounce rate is the percentage of emails that could not be delivered. While some bounces are “soft” (can be delivered eventually), many email bounces are hard (can never be delivered).
The benchmark for a reasonable email bounce rate is 2%. So, for example, if you send 100 emails and 2 of those cannot be delivered, your bounce rate is 2%. If your email bounce rate is above 2%, then there is cause for concern.
A high rate of hard bounces impacts your overall email send reputation, indicates your database or CRM needs some clean-up and means prospects and clients are not receiving your message.
Not sure where to begin?
Start with the low-hanging fruit.
Choose one of the KPIs from this list that aligns with your firm’s strategic goals and objectives, with data that you or your marketing department can easily obtain.
Much like your marketing initiatives, your KPIs should evolve with regular reporting to accurately measure your success.