Changing the Way Law Firms Measure Return on Marketing Investment

Every time a business person decides to run an ad, develop a web site, launch a social media initiative, take prospects out to lunch or start a public relations campaign, the obvious question that hangs implicitly over his or her head is, “How do I know this will work?”

This is especially true for the more than 47,000 law firms and 1.2 million attorneys whose access to hard data is virtually non-existent; where supermarket scanners serve no purpose and there are no audit or rating resources (e.g., Nielsen) that can provide management with answers to very complex questions. 

Searching for the answers to these very same questions in regard to their own respective businesses, entrepreneurs Les Altenberg and Tom Mazanec developed a methodology they call Etiometrix. According to the two, the Etiometix approach crunches lead generation and sales data in a manner that’s never been done before, offering legal marketers the opportunity to assess their marketing and business development activities at the organizational, practice group and even individual attorney level. The result is a service that allows marketers to know:

• Which activities offer the best returns-on-investment 
• Who among the firm’s attorneys is best –suited for business development and through which types of activities
• Which practice areas should be supported and to what degree
• The role that “word-of-mouth” is playing in the growth of the business
• How well the business is perceived by the firm’s clients
• The degree to which marketing (e.g., advertising, online, PR) vs. personal networking is working for the firm.

Their proprietary program can quantitatively track the effects of previously immeasurable dynamics such as branding initiatives and the role “softer” marketing tools (e.g.,  brochures, web sites) play in generating business.

According to Altenberg, who currently heads A.L.T. Legal Professionals Marketing Group, a marketing consulting agency based in Marlton, NJ, “The program traces how individuals became customers of a particular business. In most cases, it is because of exposure to several types of individuals (e.g., professionals, referral sources) media, and/or online interactions. Furthermore, the resulting reports forego so many of the interim metrics that we hear so much about these days. Its great that we can know how many people read an ad, attend a seminar, visit or click through to a web site, but those numbers do not really mean anything unless they are tied to the revenue they bring in.”

Altenberg continues, “We were always making marketing recommendations to our clients who then inevitably ask, ‘How will we know if this is working?’ Until now, we never had a good quantifiable means for addressing that question.  Now we do.”

More information on Etiometrix can be obtained by visiting etiometrix.com , emailing jarlene@etiometrix.com or calling 856-810-2127.

The Practical Application of “The History of Client Origin.”

Since the beginning of the year, we have focused on a new, and we believe, more accurate way of assessing the effects of disparate marketing vehicles and strategic approaches. By tracing the origin of its clients, today’s law firm can harness a wealth of information on the effectiveness of each and all of its marketing initiatives. By accessing this data, it can thus make informed decisions as to the short and long- term benefits future marketing endeavors may or may not provide. Application of this model can also help marketing decision makers determine which practice areas to emphasize in promotional efforts and which attorneys to assign the task of business generation. Tracking this history allows firm decision makers to compare non-linear marketing activities (e.g., image advertising, brochures, web sites) with more direct and more easily measurable activities. Finally, this methodology takes into account the powerful role referrals have in the overall health of a law firm and thereby also provides a gauge as to the perceived quality of the firm itself.

Nevertheless, to conduct such an analysis by hand is neither practical nor realistic. Consider for example the law practice that has been in business for over a century, that has served thousands of clients, hundreds of which have come through referrals and all of which have helped to build the firm to its current state. The pathways and permutations thereof could well venture into the millions -- not the kind of analysis of which even the most ambitious of marketing decision makers would most likely be willing to undertake.

The problem of practicality is easily addressed however, through technology that can track the path by which every client came to the firm and thus the relative ROI and Aggregate ROI for any marketing activity over any period of time. Hence, the problem is not with having the capability of obtaining the output for such analyses, but with obtaining the proper input.

Etiometrix, LLC just announced the launch of RainGauge, the first application that utilizes the History of Client Origin methodology to track law firm marketing ROI. (Full disclosure:  We have been working with the technical software people to develop this application.) It limits the intake process to a single question, asking new clients to select from a list of activities by which they have read, seen, heard or learned about the firm. It even captures referrals. Most important, the program provides legal marketers with the opportunity to view their firm’s marketing and business development initiatives from the most detailed to the most holistic perspective possible.

If you would like more information on the RainGauge application, visit www.etiometrix.com or call 856-810-2127.

And we certainly welcome your comments, questions and general feedback on this recent series of posts regarding the proprietary methodology History of Client Origin.

The Most Boring, Though Critical, But Often Overlooked Part of the Legal Marketing Process

One of the most overlooked parts of the legal marketing process is also its simplest – the creation and utilization of new client intake. In all the years that we have worked with law firm clients of all sizes, it still baffles me that some law firms still show a reluctance to obtain the kind of data that can help them make important decisions.

While most law firms may know their click-through rates, directory page rankings and how much new revenue came in at any given time,  many still do not know whether those clicks turned into leads that turned into clients; whether the efforts at high page ranking were worth the time and money; or which marketing/business activities spurred that new revenue.

The new client intake form is critical if firm management wishes to know whether different parts of the firm’s business-building efforts are working and to what degree. Besides the obvious name, phone number, address data that will be collected, law firms should probe to get a deeper understanding as to how and why prospects came to them.  Where did the prospect learn about the firm? Was it from more than one source? Was a referral involved?  Did they take the time to visit the firm’s site? What message resonated with them? All of these questions are vital if the firm is serious about making better marketing-related decisions in the future.

I believe that law practices often initiate their marketing efforts with good intentions, but then fail to commit to tracking the results of these programs. Even when such information is available, there is often a reluctance to examine what the data is actually conveying. For example a pay-per-click campaign may have netted 5 new clients and $60,000 in revenue, but what good is that if the campaign itself cost $100,000? Similarly, how efficient is being ranked number one on Google if the efforts are not just justified by the revenue generated?  Conversely, might certain business building initiatives be serving a worthwhile purpose even if they are not “paying out” immediately? Is that new firm brochure really a waste of firm money, simply because none of the new clients mentioned it during intake?

Law practices should take a page out of the playbook of businesses that manufacture or sell products. Most have a pretty good idea as to how their marketing programs are doing. Similarly, it’s important that law practices create processes that offer measures of accountability.