Fine-tuning your law firm marketing system to ensure the best possible return on investment requires data collection and analysis. The pieces of information that will be most useful to you in making this assessment are known as key performance indicators, or KPIs.
What is a Marketing KPI?
Take the “key” in “key performance indicators” seriously. In assessing and improving your marketing campaigns, you’ll see a lot of data. Most of that data is important for one reason or another, or plays a role in understanding the big picture. However, not every piece of information you’ve gathered is critical. KPIs are the handful of indicators by which you measure success. Unfortunately, many law firms get distracted by the wrong data, overlooking the importance of KPIs.
The One Big Reason Law Firms Focus on the Wrong Data
Law firms aren’t alone in getting distracted by data. Vanity metrics often do not necessarily impact your firm’s profitability. Digital marketing, in particular, offers many apparent measures of success that may have little or no effect on the success of your law firm. Some of the most common distraction data includes:
- Website traffic: While it’s encouraging to see a lot of traffic coming to your website, you aren’t in the news or entertainment business. Your website’s ultimate goal of drawing traffic is to build business, which means converting visitors to leads or attracting the attention of influencers who will share your content with your target market.
- Leads generated: A telephone call or a form submitted maybe a step in the right direction. Bad leads, however, can be worse than no leads. Bad leads may eat up staff time and take advantage of free consultations with little or no chance that they’ll become paying clients. Generating profitable leads is a quality game over a numbers game.
- Cost per click: Of course, cost is a concern for any marketer. However, the most easily identified cost measures, such as the cost-per-click on an AdWords campaign, don’t provide valuable information standing alone. Your most meaningful metric is the percentage of ad clicks that leads to a paying client and the resulting lifetime value of that client.
There are many reasons law firms get distracted by this non-essential data, including simple lack of experience. One key reason is quantitative data is readily available and easy to understand. When a law firm doesn’t have a system in place for assessing critical qualitative data in clear understandable format, it’s natural to fall back on the straightforward measures that are easily accessible.
The Right KPIs for Your Law Firm Marketing System
Your key performance indicators tell you directly whether or not you are achieving your goals and, if not, where the process is breaking down. Because your key indicators are individual to your firm’s specific goals, you won’t find a standard checklist of law firm marketing KPI’s. Generally, critical KPIs will inform whether you are effectively:
- Bringing in more high-value clients, and
- Minimizing the cost of connecting with and retaining these clients
To determine how to improve your marketing performance, look at
- Cost per acquisition of a paying client
- Lifetime value of a client
Of course, each of those key measures involves synthesizing several other data points. For example, to determine the cost per acquisition of a paying client, you’ll have to consider:
- Direct advertising costs through a channel
- The number of paying clients acquired through a channel during a particular time and expense block
- The amount of staff time required to convert each client
- The amount of staff time consumed by non-converting leads through a channel
In most cases, your true KPIs won’t appear fully-formed in your AdWords account or your website statistics. Rather, they are determined through a complex process of combining and analyzing information that requires a much greater investment of time and effort. A successful marketing effort will involve either a significant learning curve or guidance from an expert. Unlike tracking vanity metrics like website visitors or counting forms submitted, determining real KPIs will help your law firm increase revenues and decrease marketing costs.
One-400 helps law firms grow their businesses with a full range of marketing and branding services. If you’re ready to dig deeper into your data to improve your bottom line, we can help.