Back in the 1990s, when law firms first started investing in marketing staff and programs, few people paid much attention to marketing measurement.
Firms that were early adopters certainly gained attention for their efforts, but very quickly marketing became a basic cost of doing business. The typical legal marketing department was limited in size, constrained in its role, and focused on tactical activities like partner support, brochures, events and directory listings. Financial metrics were aimed at budget adherence and controlling departmental costs rather than assessing contribution to revenue.
Today much has changed. The scope of law firm marketing activities has expanded to include business development and a wide range of digital channels, each one offering its own stream of data for measurement. Technology now gives marketers unprecedented access to information about clients and markets, and growing power to target and focus their programs against those markets. Law firm marketing budgets, while not in the same league as some other business-to-business sectors, now represent 2-6% of revenue in most firms.
The pressure is on
In short, running a law firm marketing department now requires serious investment. And as a result, expectations are rising – and law firm marketing costs are under greater scrutiny than ever. Many CMOs are under pressure to demonstrate Marketing’s contribution to the firm’s revenue in concrete terms.
This issue is not unique to law firms. In fact, a recent Aberdeen study, A Marketing Reality-Check for CMOs on Revenue Attribution, found that 51% percent of marketers across all industries are unsure of how their activities influence revenue, and have no way of calculating their contribution.
Faced with demands to demonstrate ROI, some marketers resort to a tactical approach to measurement – for example, counting visitors, clicks, likes, and email opens. Such metrics are certainly useful for benchmarking and improving the department’s efficiency, but they don’t answer the question that the CFO’s and COO’s skeptical question: “What are we getting in return for our investment in marketing?”
So what’s the solution? How can we measure marketing activities in ways that are meaningful to law firm leaders and attorneys? How can we ensure that our marketing metrics mean business?
In some industries, it’s possible to create formal revenue attribution models for how each individual sale is credited to the marketing activities that influenced it. That level of specificity is hard to achieve in a law firm environment – but nevertheless we do have opportunities to link marketing activity to revenue generation.
For example, let’s think about a few of the business outcomes that law firms celebrate and use to keep score on revenue growth. Then let’s ask some questions about how marketing influences those:
- Winning a new client: A client’s decision to buy does not result only from the BD activities of a single partner – it’s the result of a series of touchpoints guiding them through the journey from awareness to purchase. Many of those touchpoints are marketing-related – emails sent, content downloaded, events attended, etc. Using the firm’s marketing data, can we assemble a dossier of touchpoints telling the story of the new client’s journey with the firm before they came on board? Better yet, can we relate those touchpoints to campaigns and programs that were in our annual marketing plan?
- Increasing revenue from an existing client: As a new client relationship matures, fresh needs and opportunities will usually emerge. How can we show how marketing is responding to those emerging needs? Have we “tuned” the marketing content that the client’s people receive from us? Have we ensured they are invited to the right events? How are we supporting attorneys in preparing for meetings with the client?
- Winning pitches and RFPs: Can we help the firm keep score on its win rate? If the marketing team is involved in some pitches but not others, can we demonstrate a correlation between our involvement and increased chance of winning? Can we show how our involvement allows the firm to respond to (and win) a greater number of (the right) RPFs?
- Launching a new practice or service line: Taking a new offering to market is where the marketing team can really excel. How closely were we involved in planning the launch – did we provide a full range of supporting activities across all channels? Did we generate media coverage? Did we execute digital campaigns – and if so what were the results? Can we connect marketing activities to any new opportunities or wins for the new practice?
The point here is to be focused and intentional, rather than tactical, when measuring marketing activity. Don’t rely on counting clicks to tell your story. Start with the revenue growth outcomes that the firm expects to achieve – and plan your measurements against those outcomes. Do this consistently over time, and you will be well positioned to answer the difficult questions about your department’s revenue contribution.