How to measure your ROI
Insights Into Practice
Have you ever been curious as to what goes on in the minds of other legal practitioners? Have you ever wondered whether you measure up?
It’s only natural, after all it’s human nature to be curious about the world and the people around you – how do they do what they do?
With that in mind, join us as we investigate frequently discussed topics, with the aim of discovering new approaches to the practice of a law in an ever-changing and evolving world.
Take this blog’s topic – how to measure return on investment – How do other firms do that?
How to measure your return on investment (ROI)
In our last blog we spoke all about brand awareness and how important it is to have a recognisable brand. In fact, we emphasised the importance of brand loyalty when building a budding legal practice resulting in recognisability, and above all – repeat business!
And that’s all well and good but how do you know if the money you’re investing in marketing your brand is worth the spend?
One can start with tracking outcomes and expenses to gain insight into how well your marketing efforts are performing (JD Supra). And understanding how those are tracking will obviously assist when it comes to budgeting and resource allocation. Which is again – obviously – key when it comes to understanding profitability. That – in turn – will enable the marketing branches of law firms to make informed decisions when it comes to building strategies around brand awareness and brand marketing.
To get down to the crux of the matter and in order to better understand your spend on marketing campaigns, it starts with setting out your goals. And you can do this by asking yourself the following:
- Are the marketing campaigns – whether on social media or otherwise – intended to simply (and this is said tongue-in-cheek as we all know how important this is) build brand awareness?
- Are the marketing campaigns only meant to generate more leads?
- Are you interested in knowing how many times new clients are visiting your website?
- Are you keen on knowing how many new clients contacted your firm?
By sussing out and knowing what your true goals are, it will be easier to measure your ROI.
How do you go about doing this?
According to JDSupra, measuring your ROI is as simple as –
“In its simplest terms, R.O.I. can be determined by adding together all the income generated by your marketing initiative, then subtracting the total costs, giving you the net value of your returns. Once you’ve done this, divide it by total investment costs to get your actual R.O.I.”.
While Forbes sets out (inter alia) that it’s not only an investment of money but instead an investment in time –
“Tracking your investment of time is a lot more difficult. You’ll need to consider the time members of the firm invest in creating content or reviewing content produced by your marketing company. While someone at the firm needs to monitor marketing efforts, if marketing is taking up multiple hours of attorney time each week, it might be worthwhile to consider outsourcing some tasks for the most cost-effective use of human resources”.
The important thing that we can take from the above is this – it’s crucial when running marketing campaigns – on social media or otherwise – to determine whether a marketing campaign had measurable results and favourable outcomes. Otherwise, what would be the point?
As Good2BSocial sets out –
“Information related to ROI can also help you figure out whether you should continue running the campaign as-is or make some adjustments that could improve its effectiveness”.
With that said, what are some of the practical ways you can measure ROI?
- Tracking software – like Google Analytics can show you the “number of unique visitors to your site. Tracking software can help you determine how many of those visitors fill out contact forms and become leads. You can compare new client lists to find out your conversion rate from visitors to leads and from leads to clients”;
- Determine average spend per new client – if your marketing campaign resulted in two new clients signing up with your law firm and you then determine that each new client resulted in revenue generated of R10 000 per client, you essentially made R20 000 because of the marketing campaign. You then need to look at “How much are you spending to create the content and place the ads each month? The same analysis needs to be undertaken for each online marketing avenue, if possible” (Forbes).
While this is not an all-encompassing list it’s a perfect start to understanding whether your investment – be it in time or money – in marketing your law firm has resulted in actual money in the bank.
One other thing to keep in mind – as set out by Forbes –
“In the world of internet marketing where sweeping changes can be made instantaneously and results can be measured in real time, we sometimes have to remember to pause and wait. While measurements are immediate, results still take time to play out.
Trying to gauge the ROI of a campaign too soon can give you incomplete results. When reviewing returns, look for overall trends rather than specific anomalies. It takes time for marketing investments to pay off. But if you’re showing no measurable progress after a sufficient period, then it is time for a new strategy”.
And perhaps Forbes is right – yes you need to measure how well your marketing campaigns are performing. And yes, lead generation and revenue generated is crucial to the success of your law firm. But it’s also important to remember that these things take time. You often need to invest in more than one marketing campaign for true results to show. Being too quick off the mark without allowing sufficient time for the marketing campaigns to work their magic can result in you gaining incorrect insight into your ROI. Have patience. Stay the course and in time, you can change strategies as needed.