By Promediaattorneymarketing Google+
As the old saying goes, it takes money to make money. But the question for the ages, in all industries and in all companies across the world has been iron-clad consistent: How much money will it take? The short answer for lawyers is “More Than You Are Currently Spending!” Not only are law firms spending at unbelievably low levels (low to the marketing world), these small budgets are being spent on the wrong types of marketing.
So, how much are the other guys spending?
The average company, across all industries, in America spends between 10% and 15% of their gross revenue on marketing and promotional activities. This covers everything from stadium naming rights to direct mail to banner ads. The average American law firm spends a paltry 1.5% to 2% of gross revenue on their marketing activities1. Why the disparity? The answers vary. Few small to mid-size firms have a marketing resource on staff, and, while high cost/low impact marketing efforts like Christmas cards and golf outing sponsorships look great on paper, they don’t deliver the leads you need to grow your firm.
What types of efforts should my firm spend our marketing budget on?
A marketing best practice is to only commit budget to initiatives that can be measured directly. Direct marketing, television commercials, and search engine marketing bring in a powerful and efficient response, while being 100% measureable. These types of efforts are low-cost/high impact – lots of bang for the buck. So not only will your marketing dollar go farther, you’ll be able to measure how many leads and calls each effort delivered, and how much each lead cost. That isn’t to say golf outing sponsorships and Christmas cards don’t have a home in a marketing budget. When done in moderation, these types of marketing efforts, while not directly measureable, still play an important role in branding, goodwill, and publicity.
What kind of a Return on Investment should I expect from my marketing budget?
Again, it depends. It depends on the company, it depends on the marketing channel, and it depends on the strategic goals of the marketing effort. A company spending 15% of their revenue on marketing will probably expect a heavier return on investment than the company spending 2% on marketing. To illustrate these variations by channel, email marketing returns about 115% ROI2. Television has an ROI of about 170%3. Search Engine Marketing can deliver ROI upwards of the 200% to even 400% range4.
Why the disparity between marketing efforts?
Each piece of your marketing mix is unique. Television is more resource-intensive, but delivers a deluge of responses. Search Engine Marketing has a low cost of entry, but if done incorrectly, the results can be disastrous. Email is simple to do and easy to track, but it takes a ton of emails to get a decent number of leads, and in the personal injury space, should probably be used as a vehicle for referral, check-in, or follow up rather than new lead acquisition. The key to success is to build a mix between channels that will deliver a good batch of quality leads for the marketing investment. As long as your ROI is positive, and your efforts are generating leads, your marketing is working.