What is Marketing ROI?
Marketing return on investment (ROI) is a key metric that evaluates the return generated from money spent on marketing activities. The formula for measuring the effectiveness of your efforts varies depending on the industry and your objectives.
As an example, let’s say you are spending money on a LinkedIn campaign so you can attract new clients for your firm. How much is the campaign costing you? Be sure to add in hard and soft costs when calculating this number. Not only are you paying LinkedIn, but you need to spend time (or hire a graphic designer) to create the ad. Set your objectives at the beginning of the campaign. How many new clients might you obtain if you run an eight-week campaign on LinkedIn? Maybe your objective is simply to raise awareness of the firm or a specific practice area. That can be measured by the number of views or new likes on your firm’s profile.
The ultimate goal is simple: your marketing efforts should generate more revenue than the cost you incurred.
Do I Have To Track ROI?
You don’t have to do anything, but you will want to track ROI. Tracking ROI helps lawyers and law firms decide where to allocate their marketing budget, which strategies are most effective, and where adjustments may be needed to improve overall performance.
Even though your firm’s website is a decade old, you will be hard-pressed to get firm leaders to agree to spend money on updating it without having a solid business case. If you haven’t done so already, now is a great time to make Google Analytics your friend. There is so much data to mine with this tool that is helpful as you make decisions. Do you know how many people are visiting your web pages? Where are they coming from? How long are they staying on the pages? What are your expenses related to the website? Are you contracting with a specialty firm and/or have a full-time employee who works on it?
Look closely at both the hard and soft costs to determine if your investment is paying off. There is a wealth of engagement metrics to monitor that help gauge the effectiveness of your firm’s online marketing efforts. Like it or lump it, tracking marketing efforts is essential for optimizing marketing spend and maximizing profitability.
Mix It Up
It’s never a good idea to put all of your eggs in one basket. Measuring other key performance indicators can be helpful in decision-making, too. As an example, you could measure prospects who take an action based on one of your email marketing campaigns. Perhaps you take a look at individuals who signed up for a newsletter or filled out a form in order to download a case study you published. How many people opened the email? How many bounces did you have? These are all important data points to collect and review.
It’s also important to measure brand awareness and overall firm visibility. Client surveys and certain social media monitoring tools can help you determine how clients, prospects, and the business community perceive your brand.
And speaking of social media … many of us have a love-hate relationship with many platforms. However, if your clients and prospective clients are using a certain social media tool, you need to have a presence there, too. Track metrics such as likes, shares, comments, followers, and click-through rates to assess the impact of your efforts. Know what your typical activity is and look for trends and spikes in engagement to measure your overall effectiveness.
By measuring ROI and analyzing the data regularly, you can gain valuable insights into the performance of your marketing campaigns. As the late, great Dr. Maya Angelou once said, “When we know better, we do better. If you’re armed with good information you can make great informed decisions to help grow your firm’s bottom line.
