Marrying IT with the Legal Marketing Function

Businesses of all kinds have historically had a difficult time reconciling the respective roles of those in the marketing and in the accounting/financial departments. It has always been understood that marketing should "pay out." Yet those who performed that function had difficulty articulating how each element of their program contributed (for better or worse) to the company's bottom line. 

Now however, that “fuzziness” of respective roles has carried over into the IT department as well. Marketers of all kinds (and legal marketers in particular) might well ask where marketing begins and ends. More often than not, in today’s information driven society, it begins and ends at the desk of the firm’s technical guru. 

For proof, one need look no further than the importance CRM software plays in the business development process. If attorneys (particularly at larger firms) had to procure, understand, implement, train and then utilize such applications on their own, it is doubtful this technological advance would be as widespread as it is today. Same holds true for the marketing guys who may well understand how to develop a message, place an ad, disseminate a press release or even create a pay-per-click campaign, but who at the same time, would have difficulty recognizing the compatibility of one legal application with another.

So much of legal marketing today revolves around online activities. Yet it is the IT folks who understand the benefits (and limitations) of the various social media outlets, the changing algorithms involved in search engine optimization, the capabilities of online dissemination services, and the potential of the firm’s web site to convey everything the firm wishes to convey.

The law firm that places too great a distinction between marketing and information technologies runs the very real risk of inefficiency, but even more important, is almost certain to miss out on opportunity. A much wiser approach is to promote the full integration of the IT folks into the marketing decision making process.

By doing so, law firms are almost certain to discover ways in which to efficiently stand out from competitors through both substance and style. And even in the information age, “standing out” is still what marketing is all about. 

Word-of-Mouth Revenue and the Value of a Client

Toothpaste marketers have it easy.

It’s not hard for them to figure out the value of a client… or in their case, of a customer. They know the margin they make on the product, how many tubes that customer will buy and how often that customer will come back to buy it. Moreover, the word-of-mouth phenomenon is not prevalent. After all, how often do you give or receive referrals on which toothpaste to buy?

But what about the marketer of legal services?

For most practice areas, there is no “typical” client. And there is absolutely no way of knowing or even estimating how many times that client will come back for more services. But most important, the value of a client is determined not just by the revenue that client brings in, but also by the revenue that client generates through word-of-mouth and referrals. Unfortunately, most law firms fail to track that information and thus fail to get a full understanding of what each client represents to the firm.

This lack of information can have a direct impact on the firm’s fortunes. For example, a client that brings in greater revenue may be “appreciated” more than the smaller client whose contribution to overall firm revenue is significantly less. Yet, that smaller client may be of greater value to the firm simply through its connections to other potential sources (i.e. prospects) of new revenue.

When data regardingfrom where referrals are coming is not collected, law firms miss the opportunity to not only understand the value of each client, but also the opportunity to nurture those sources of “down the road” revenue. They may not see that that client who used to send lots of business their way is no longer doing so, and thus they may not recognize that his or her perception as to the quality of their services is no longer what it was. They may not see that Mrs. Smith merits a lunch invitation, Mr. Jones has earned a larger gift basket come the holidays, or that the XYZ Company is in danger of becoming an ex-client.

To be able to act on this information, law firms must first be able to capture it. Yet this need not be a daunting task, By simply asking the question (as one would regarding through what medium a client heard about the firm), and tracking the revenue generated through these sources, a great deal of actionable data is obtained.

You can find more information regarding the tracking of word-of-mouth revenue and the value of a client at etiometrix.com.

In the meantime, I look forward to the day your firm’s success in business development can be quantifiably tracked to perceptions of its work quality. 

Word-of-Mouth Revenue and the Value of a Client

Toothpaste marketers have it easy. 

It’s not hard for them to figure out the value of a client… or in their case, of a customer.  They know the margin they make on the product, how many tubes that customer will buy and how often that customer will come back to buy it. Moreover, the word-of-mouth phenomenon is not prevalent.  After all, how often do you give or receive referrals on which toothpaste to buy?

But what about the marketer of legal services?

For most practice areas, there is no “typical” client.  And there is absolutely no way of knowing or even estimating how many times that client will come back for more services. But most important, the value of a client is determined not just by the revenue that client brings in, but also by the revenue that client generates through word-of-mouth and referrals.  Unfortunately, most law firms fail to track that information and thus fail to get a fuller understanding of what each client represents to the firm.

This lack of information can have a direct impact on the firm’s fortunes. For example, the revenue obtained from a particular client may be “appreciated” to a greater extent than the smaller client whose contribution to overall firm income is significantly less. Yet, that smaller client may be of greater value to the firm simply through its connections to other potential sources (i.e. prospects) of new revenue.

When data concerning from where referrals are coming is not collected, law firms miss the opportunity to not only understand the value of each client, but also the opportunity to nurture those sources of “down the road” revenue. They may not see that that client who used to send lots of business their way is no longer doing so, and thus they may not recognize that his or her perception as to the quality of their services is no longer what it was. They may not see that Mrs. Smith merits a lunch invitation, Mr. Jones has earned a larger gift basket come the holidays, or that the XYZ Company is in danger of becoming an ex-client.

To be able to act on this information, law firms must first be able to capture it.  Yet this need not be a daunting task, By simply asking the question (as one would regarding through what medium a client heard about the firm), and tracking the revenue generated through these sources, a great deal of actionable data is obtained.

You can find more information regarding the tracking of word-of-mouth revenue and the value of a client at etiometrix.com.

In the meantime, I look forward to the day your firm’s success in business development can be quantifiably tracked to perceptions of its work quality.

Les Altenberg is President of A.L.T. Legal Professionals Marketing Group ( LegalProfessionalsMarketing.com ), a full-service marketing firm dedicated to the business development efforts of law firms and those who serve the legal industry. He can be reached at 856-810-0400 or via email at laltenberg@legalprofessionalsmarketing.com

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.

Measuring Return on Legal Marketing Investment: Tracking Clients Through Multiple Exposures

As we have discussed, one of the biggest mistakes that law firms make is acting on the assumption that individuals or businesses become clients of a firm through a single exposure.

Is this true?

Sometimes.  But more often than not, prospects become clients through several exposures.

At our agency, we have found that some law practices are hesitant to invest in marketing or business development because their clients come through word-of-mouth.  The phenomena of “word-of-mouth” is wonderful when it happens and one which we will address in a later blog post. But it is foolish to think that even “word-of-mouth” exists in a vacuum. Even the individual who is referred to a law firm by a trusted friend, will in all likelihood still visit the firm’s website or look at the firm’s brochure. If the message conveyed in these vehicles is inconsistent with how the firm and its services was described by the friend, a disconnect is created that can limit the opportunity for a successful lead conversion. In this case, the potential client has been exposed to two “touchpoints,” neither of which is reinforcing or underscoring the other.  Similarly, when exposures reinforce one another, it stands to reason that the overall perception of the firm (and hence the likelihood of converting the prospect into a client) is enhanced. In many ways, this is the very essence of integrated marketing.

In tracking the ROI of an integrated legal marketing campaign, it is important to consider all of the ways in which each client was exposed to the firm. But taking such an approach also creates some logistical problems. For example, if one wished to ascertain the ROI of an advertising campaign, most would assume that the standard formula {(Revenue – Advertising Expenses)/Advertising Expenses} would suffice.  However, this would fail to account for all of the other ways in which new clients may have learned more about the firm. Were they aware of the recent new case the firm was handling? Did they visit the web site? Did someone refer the firm or justify the decision to contract with it? Were they introduced to one of the firm’s attorneys?

Another way to look at this is to question why millions of dollars are allocated every year for marketing materials and activities that unto themselves, may generate zero new revenue. A new firm logo is created, a strictly “image” advertising campaign is initiated, an expensive brochure is produced. Why? The answer lies in the fact that when executed well, they make other elements of the overall marketing program work that much more effectively.

The interesting thing is that if one could determine the relative contribution of each marketing “touchpoint” to the firm’s overall revenue growth, one would then be in a much better decision to determine the “value” of specific marketing elements. For example, today, creating a new web site can cost anywhere from a few hundred dollars to tens of thousands of dollars. How can the legal marketer know how much he or she should invest in that site?  How important is it that it “look right” and how much is lost if the decision is made to skimp on the expenditure?

Traditionally, there have been no ways of which we are aware, for tracking the business development process across multiple touchpoints and in such a holistic manner. Thus there is no real formula that truly captures the legal “purchasing” process. To do so would require determining how much of a new client’s revenue was due to exposure to an ad versus how much from the referral of a trusted friend.  And in more complex cases, it might require allocating new client revenue amongst a PR campaign, a firm brochure, a web site, a seminar, a referral from a trusted friend and still another referral from an already existing current client of the firm.

In the coming weeks, we will discuss more about how such a methodology might be put into place. 

Next Week:  Dissecting Direct Revenue, Aggregate Revenue and Revenue Generated Through Word-of-Mouth

Measuring Return on Legal Marketing Investment: Why Law Firms Don’t Get Useable Information

If there is a single sentiment that we have heard most often in over 20 years as legal marketing consultants, it has been expressed by the question, “How do I know if this marketing effort will work?” The laments,  “We tried that and it didn’t work,” and “Most of our business comes through word-of-mouth,” would be right up there as well.

As we begin a new year, I thought it would be a good idea to explore how legal marketers can get a better handle on what strategies and marketing vehicles pay out and which are less profitable.  By accurately measuring the effects of their marketing efforts, law firms will be better equipped to develop meaningful and growth-oriented business development initiatives.

I encourage everyone to lend their voice to this discussion as determining the effectiveness of legal marketing is imperative for practice growth.  Unfortunately, it is a topic that is either often misunderstood or ignored altogether.

Why Measuring Return on Marketing Investment is Difficult

To understand where legal marketers miss the boat on measuring return on marketing investment, it is important to get a handle on why measuring such return is so difficult to begin with.

First, unlike marketers of consumer products, legal marketers do not have a wealth of measurement tools at their disposal.

Second, the large disparity in the number of clients/customers of a particular product versus those of a law firm makes traditional analysis of return-on-investment much less accurate for this latter type of enterprise.

Third, word-of-mouth referrals play a much larger role in how someone finds a lawyer, a doctor or a financial planner then in how they determine what brand of cereal to buy.

Fourth, some activities have traditionally not been easily measured. Creating a brochure, developing a new web site, writing an article for a trade publication may not actually make the phones ring, yet we know instinctively that they play a part in the overall growth of the firm.  We just don’t know how big a part.

Fifth, in legal marketing, attorney “time” is a major marketing cost element. Very few methodologies capture this significant business development expense.

Finally, and perhaps the most important reason why measuring the return on a law firm’s marketing investment is so difficult lies, as we shall see, in some faulty premises on the part of legal marketers themselves.

Next week we’ll take a look at some of these faulty premises -- mistakes law firms make that prevent them from getting a true picture of their business development initiatives.

And after that, in the weeks ahead, we will outline how law firms can get a much better handle on knowing from exactly where their business stems and how they can use this data to make informed decisions about future growth programs.

Next Week:

Measuring Marketing ROI: The 3 Mistakes Law Firms Make