The ROI of Marketing

“What gets measured gets managed.” Peter Drucker

Over 40 years ago Peter Drucker spoke words of truth – “what gets measured gets managed”.  Over the years he used managed interchangeably with improved.  The reason this is true is simple, if you aren’t measuring you have no idea what is happening, so you can’t manage or improve anything.

Never has this been more true than in your marketing.  Most attorneys look at marketing as a black box, they figure if they throw money at it something will work.  What most don’t realize, is that it is the old fashioned personal relationship marketing that is most effective.  What is relationship marketing?  Referrals.  From clients, friends and professionals you know.  And who know your business.  How do I know this?  Because we work with our clients to track their conversion cycle.  We track these rates by referral source and by type of matter using our ROI of Marketing system.  Usually maintained by the person answering the phone, it is a quick easy spreadsheet that gives the law firm owner all the information they need to fully measure their sales process.  And what gets measured, get improved. Here are the 6 Key Numbers© of Marketing that we look at:

Calls to Qualified Potential Clients: How many people are calling your firm each day/week/month and does your receptionist spend the time to qualify them?  He/she should be screening for those traits that make a great client for you.  And conversely, screening out clients that aren’t.  For example, if you are a DUI firm, you shouldn’t be meeting with people who have pending drug charges.  And the important one, can they pay you?  You should have a list of six to eight simple questions that ensures you only have serious potential clients in your sales calls.
What should the ratio be?  40-45% should be qualified
If my ratio is low?  Your messaging is wrong.  You are saying something, either online or in person that is attracting the wrong clients.

Qualified Potential Clients to Appointments Set:  Once you have qualified the potential client, they should be setting appointments for sales calls.
What should my ratio be?  75-80% should book appointments
What if my ratio is low?  You need to get some training for whomever is answering your phone and setting appointments.  These people are ideal clients – they should be booking at a high rate.

Appointment Set to Appointment Show:  The person booked an appointment, but did they show up?  I was always amazed when qualified potential clients didn’t show but then I had that experience personally.  I went to visit a new client one day.  I easily found the building, but the front door was locked.  I called the office and they said to go around the side of the building and there was an unlocked door that opened directly into their office.  I wonder how any other people had the same experience?  A simple sign would have made a world of difference.
What should my ratio be?  75-80% should be on time for your appointment.
What if my ratio is low?  How are you communicating with the potential client?  Did they get written confirmation of the appointment?  Did they receive detailed instructions (with photos) of how to get to the office?  Was the appointment confirmed the day before?  Do you have a locked front door?  Examine the process from a potential client’s viewpoint and make necessary changes.

Initial Consult to Hire:  Once you have your ideal client in the room, what percentage are buying?  It should be pretty high because they were screened to be ideal clients before they ever made an appointment.
What should my ratio be?  65-75% should buy from you.
What if my ratio is low?  You (or your salesperson) needs some training.

Cost of Client Acquisition:  This is a simple formula – how much did you spend on marketing divided by the number of new clients.  The result is how much you spent to get a new client.
What should my number be?  This is different for every firm, but never more than 15% of the billable value of the case.
What if my cost is too high?  If your cost is more than 15% of the case value, then you need to cut that marketing source.  It is not cost efficient for your firm and is hurting profitability.

The ROI of Marketing:  The ROI of Marketing system tracks average case value.  And when we start to compare marketing spend by client source to revenue by source, we make educated decisions.  If for every dollar we spend on workshops brings in $12 of revenue and every dollar of pay-per-click brings in $3 of revenue, the smart move is to divert marketing dollars from PPC to workshops.
What should my ratio be?  We always want it to be at least a 6X return.  10X is our goal.
What if my ratio is too low?  Divert money away from low ratio activities into higher producing options or simply stop spending the money.  Sometimes less is more.

The power and insight of this information is incredible.  It puts you, the owner, in control and able to make decisions based on data, not gut feeling.  No more hoping its working or that you are making wise decisions.  Are you measuring your marketing?  If not, how can you expect improvement?

If you have any questions or would like to know if you are getting ROI on your marketing plan please email,, and she will be happy to help.