Over the past several weeks, we have outlined what we feel
to be a more holistic and thereby more accurate methodology for tracking the
results of law firm marketing. At first blush, employment of the History of Client Origin methodology described in these postings
might appear to be just another way of calculating, analyzing, predicting
return on investment, and ultimately for making decisions pertaining to the
marketing activities of the firm.
But this would not be true.
The data gained through the utilization of an approach that
tracks client origin is both vast and rich in detail. Among the information to
be gleaned are answers to questions such as:
Which marketing
tools offer the greatest potential for short-term ROI? For long-term ROI?
Because the History
of Client Origin Methodology can be traced over any period of time, firm
decision makers can easily ascertain which activities are most likely to pay
out over the short or the long haul.
What is the
relative cost vs. benefit in having specific attorneys spend time on client
work vs. on business development efforts?
Let’s face it. Some attorneys are better at drumming up
new business and others are better at lawyering. This can be analyzed by taking
the History of Client Origin model and applying it at the attorney level. This
involves tracking the touchpoints to which the individual attorney allocated
his or her time. The hours spent is then multiplied by the attorney’s rate of
compensation to arrive at ROI and Aggregate ROI figures for his or her efforts.
These numbers can then be compared to the revenue that might have been earned
had the attorney spent this time on billable work. By doing so, it is easy to
ascertain whether an individual attorney’s time is better spent on originating
work versus on generating more billable hours.
Which practice
areas offer the best potential for short or long term revenue growth?
As with individual attorneys, this requires applying the
history of client origin methodology to the practice group level. From this
analysis, marketing decision makers can determine to which practice groups firm
resources are best allocated.
Should business
development resources be spent on hard marketing costs (e.g., advertising) or
on personalized prospecting/networking?
The History of client origin model provides a
straight-forward methodology for comparing the ROI of the interpersonal efforts
of firm attorneys (e.g. networking, prospecting, entertaining) to other
touchpoints such as the firm website, advertising, collateral materials, PR,
on-line media, etc.
Should marketing
resources be spent on very direct marketing activities (e.g., direct mail,
seminars, pay-per-click, etc.,) versus on “softer” image-oriented ones such as the
firm’s web site, image advertising, brochures, etc?
Unlike other ROI methodologies, the history of client
origin paradigm levels the playing field in terms of allowing marketing
decision-makers to ascertain the relative contribution of these two different
“types” of touchpoints. And it can do so, without the need for implementing
testing scenarios.
What is the short
and/or long term value of a specific client? What kind of exponential potential
do they offer?
ROI and Aggregate ROI analyses can be run against
different client segments as based upon revenue, industry, etc.
To what degree is
word-of-mouth marketing working for the firm?
By considering “referrals” to be touchpoints, we can
ascertain the percentage of revenue attributed to word-of-mouth versus revenue
generated through other means. Because referrals are an indication of client
satisfaction, it can be inferred that the greater the percentage of revenue
attributed to referrals, the greater is the perceived quality of legal services
that the firm is providing. This can have further implications as the greater
the level of referral revenue, the less there is a need to invest firm dollars
into traditional marketing channels. Of course, the converse of this is true as
well.
Yet, despite the
value in tracking client origin, to do so by hand would be inefficient at best
and impossible at worst. Instead,
the process must be automated, with reports and analyses available
instantaneously. Next week, we
will wrap up this series with some thoughts on how The History of Client
Origin methodology can be applied… Yes, there’s an app. for that!
Next Week: The Practical Application of “The History of Client Origin.”
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