Marketing Analytics and Metrics for Any Size Law Firm
For a law firm to sustain or improve its flow of business in the current legal marketplace, it must implement a solid marketing plan and follow it with consistency. In previous marketing articles, we have shared ways that individual lawyers and entire law firms can develop strategic and tactical marketing plans. We have discussed the best tools and activities to incorporate into these marketing plans and how to leverage automation to improve a marketing system’s performance.
Equally crucial to the development of a solid marketing system is measuring the results of these marketing efforts to understand whether they are worth the investment or need to be changed.
Marketing analytics and metrics can help law firms link marketing efforts and business development performance. But collecting the necessary data to accurately quantify marketing performance is not that easy. It requires a set of key performance indicators (the numbers that really matter) and the right tools to measure them.
To start, law firms should consider the following two evaluations:
How well your strategy performs against your strategic and financial goals:
Are we getting the kind of new business we are chasing?
How well your tactics perform against your tactical goals and objectives
What is worth the time and effort?
What is a waste of time and resources?
In order to carry out these evaluations and determine results, the marketing plan needs to include well-defined strategic, financial, and tactical goals. Think of these defined goals as the ways you will determine if you are hitting the target that you are aiming at.
Well Defined Goals
Strategic Goals: the big-picture achievements
Greater exposure or influence in the market,
Increased market share, and
The economic outcomes,
Case and client volume and
Focus on specific activities, such as:
Networking opportunities, and
Various kinds of new business friends.
To acquire the information sought, law firms can utilize the following support and implementation tools which will also benefit the individual lawyers:
- Marketing System: to coordinate your activities with partners, colleagues and referral sources and suggests adjustments to strategy and tactics - Marketing Automation Software: to collect large amounts of data to get useful information that can inform your marketing decisions - CRM (Contact Relationship Management): to collect lead, prospect and client information - Accounting Data: to support metrics
All of these systems are way more useful than data collection devices, but that is our discussion now.
Once an attorney or a law firm implements a marketing plan, it is time to monitor activity performance, to oversee and manage tactics implementation and to ensure the execution of the activity plan is in line with the desired outcomes (hopes and dreams).
The table below provides a list of activities and the measures to determine whether the plan is being properly executed. As an example: If increased web presence is a goal, then the plan owner has to exert the required effort to ensure that activities associated with that goal are implemented as planned (have to show up and try). This will ensure that the performance analytics and metrics provide useful information. When a goal is formulated but not actively pursued there is no point in measuring performance. Mark the activity incomplete and move on.
* DIGITAL (INBOUND MARKETING) ACTIVITIES*
WEBSITE AND WEB PRESENCE ASSESSMENT
SEARCH ENGINE REVIEW
Relevance & Authority (How relevant is the website content and how many other quality sites link to the website),
SEO friendliness of the website
SOCIAL MEDIA EFFECTIVENESS
Presence & Activity,
CONTENT DEVELOPMENT CAPABILITY
Resources Capacity & Capability,
Knowledge of the firm's employees and contributors,
Tools and Software in use
Count of Organizations
Count of Events
Software or tool used,
With the help of a CRM or contact management software or manually entering the information on a spreadsheet, tracking relationship building activities is relatively easy. Digital activity monitoring requires more expert insight. Web developers usually assess the website and search engine performance. Depending on the digital agency, they can help with the blog and social media as well and assess content development capability. Alternatively, marketing agencies and other consultants can help with the development and proper execution of the marketing plan, if the firm’s internal resources are limited. As mentioned in our other pieces, marketing automation software, built-in workflows, and related training can take a lawyer or firm a long way.
Measuring marketing performance consistently- monthly, quarterly, semi-annually, etc.- holds participants accountable and allows for timely plan changes. Analytics and metrics measure how well your activities support your business development efforts:
Analytics: Performance measured against tactical goals (effort and difficulty)
Metrics: Performance measured against strategic and financial goals (results and effectiveness)
Moving from the conceptual to the specific, the charts below provide some of the more common measurements used to assess performance. Despite their technical terms, most of these calculations are provided by the analytics software and the definitions of the measurements are easy to understand.
Marketing analytics measure the performance of digital or traditional relationship-building activities. The table above lists some of the most important measures by activity type. Many readily available tools exist to assist in capturing the necessary data. As the name implies, CRM (Client Relationship Management) software is typically very useful for relationship building or networking activities. CRM software can also capture much of the data needed to assess activity effectiveness.
Data for digital measures like website, search engine, social media, blogging and newsletter performance can be collected with tracking tools like Google Analytics or SEMrush, or with marketing and web development software like Hubspot or Wordpress.
There are many available CRM, tracking and marketing applications and different firms will have different preferences. In the end, it doesn’t really matter which tool is used, as long as the right data are collected and effectively communicated (reports, dashboards, notifications, etc.).
In our experience, most small to mid-sized law firms do not have the tools in place to collect information about digital activities much less use them to make better decisions. Firms who want to improve can either consult their web developer, hire an external agency or implement a capable software and train an existing employee to collect and interpret data. Collecting performance data on relationship building activities is easier, either by implementing a CRM or contact management software or tracking performance indicators on a form or spreadsheet. Even the most rudimentary system can improve results.
While analytics focus on activity performance, metrics tend to focus on business development performance (financial results), namely the cost and the effectiveness of the implemented marketing strategy. Data for these measurements are easier to acquire than for tactical analytics, as it can be collected mostly from the billing or accounting system, which essentially all firms use.
Cost-related measures include the following key performance indicators:
Cost Per Lead = Total Dollars Spent on New Client Development/Number of Leads
Client Acquisition Cost = Total Dollars Spent on New Client Development/ Number of Clients
Client Retention Cost = Total Dollars Spent on Existing Client Maintenance/ Number of Clients
Customer Lifetime Value Ratio to CAC = Customer Lifetime Value/ Client Acquisition Cost
All of these KPIs are easy to understand at every level- from solo practitioners to established law firm.
Effectiveness measures include:
Marketing Influenced Client Count (clients who engaged with marketing content)
Marketing Originated Revenue and Client Count (new fees and new clients)
Leads Converted (leads turned into clients)
Lead to Client Ratio (how many leads as a percent became clients)
3 Year- Average New Clients Trend
3 Year- Average New Files Trend
Cost-related measures require simple calculations, while effectiveness measures are mostly total counts, which can be compared periodically or with the set goals, as well as competitive and benchmark values, if available and relevant.
Interpreting the Results
When a system is in place to measure input and outcomes (analytics and metrics), a law firm can collect data to measure its business development performance and make informed decisions about the effectiveness of a marketing plan, including activity focus, time and financial investment (effort and resources). For example, Is it a bad plan? Weak execution? Both? Neither?
Gathering useful data requires consistent input (time and money invested in marketing) and is the underlying driver of the entire marketing system. Data collection, measurement, and interpretation are key marketing management duties that are often overlooked or skipped altogether.
Simply stated, tactical analytics indicate whether the implemented activities actually cause any change. For example, after ensuring consistent blog publishing, it is critical to measure how this impacts website traffic, subscriber count, requests for additional information and referrals.
The right metrics provide the needed information to determine whether the firm should continue to invest in an activity or to change course. Cost metrics give insights into the marketing plan efficiency and return on investment. Effectiveness metrics are used to find out whether the implemented plan and marketing activities actually result in client and revenue growth. Not only are these metrics useful to measure past and current performance, but also to forecast future growth more accurately and guide new investment.
In the end, the data collected can answer a few important questions:
Does the marketing plan work or do we need to adjust it?
How much time and money do we need to invest to achieve our marketing goals?
How do marketing activities affect client and revenue growth?
Which activities have the biggest impact on business development?
How will adjustments to the marketing plan affect future growth?
Most firms and lawyers rely on previously proven methods that work until they don’t. Some get it quickly and make changes and some don’t get it until the suffering phase kicks in. The marketing metrics discussed in this article are ones that can help law firms BEFORE getting to a desperate state. But law firms must use them. A marketing plan is not effective if it is not helping the firm to reach its stated goals. The good thing is that these marketing metrics and analytics can be used to obtain data at any level of firm - from solo practitioners to established law firm. The smartest firms will continue using these metrics to stay ahead of the rest.
About the Author
Jan Sander is Process Analyst at PerformLaw. Jan focuses on the development of operational processes to improve effectiveness and efficiency in key areas including: associate and partner performance, growth management, marketing planning, practice planning, strategic, transition and transformation planning.