The performance of every law firm function should be assessed on a regular basis, and that includes marketing. Key Performance Indicators (KPIs) of law firm marketing efforts are some of the most significant measures of success because they examine your firm’s ability to withstand the competitive legal marketplace and attract new clients.
KPIs are quantitative performance measurements used for the analysis and monitoring of business activities. They help identify what’s working, as well as areas ripe for improvement. KPIs should be linked to specific business strategies and involve relevant criteria that align with your firm’s priorities. For this post, the business strategy is a marketing plan, and the firm priority is the marketing goal. With these specifics in place, your law firm can use the following KPIs to achieve critical points of analysis and measure progress made towards your marketing goals.
Commonly Used Marketing KPIs
Marketing can entail a large portion of a law firm’s budget, so you need assurance that these costs are resulting in comparable returns. You need to know if your marketing strategies are actually bringing in new clients and greater revenue. These eight Marketing KPIs will help you collect and analyze the information you need to make informed marketing decisions:
Leads are those people who contact a firm with the potential of creating an attorney-client relationship. The more leads accumulated, the more opportunities for possible revenue generation, so it’s important to have some system in place to track leads. Lead tracking software helps you get the most out of your prospects. With the right options, your firm can easily keep track of leads in an organized manner.
Generating revenue is the main goal of all law firm marketing efforts, so a revenue KPI is essential for determining the effectiveness of the marketing process. With data that spans a specified time period, your firm can clarify which marketing efforts have resulted in increased revenues and which have resulted in more costs than benefits. With revenue KPIs, you can help your firm be more strategic in its marketing plan by better assessing the current performance of your marketing plan and making informed adjustments.
Acquisition costs are those associated with marketing efforts, including the costs of advertising, promotions and email campaigns. This KPI breaks down these costs per client gained using the following formula:
Customer Acquisition Cost (CAC) = Total Cost of Sales & Marketing/ Total Customers Acquired in that Duration
The final number gives you an idea of how much money your firm is spending on the acquisition of each client. You can then determine whether the average revenue generated by clients exceeds the CAC, which indicates a positive return on your firm’s marketing investment.
The conversion rate reports the percentage of website visitors that turn into leads through the traffic-to-lead ratio, which represents the number of website visitors that actually turn into leads within a given time period. The higher the ratio, the higher the leads which result in higher levels of revenue. This KPI can be used for each of your online marketing campaigns to help determine which types of content bring in the most leads. A conversion can be defined in a variety of ways, but generally speaking, once a lead becomes a law firm client, a conversion has occurred.
The Bounce Rate measures the percentage of visitors to your law firm website that leave with no intention of exploring beyond the landing page. This is calculated as follows:
Bounce Rate = (Single-page sessions / All visitor sessions)* 100
This KPI can be an indicator of the effectiveness of your website’s design and attractiveness to potential leads.
Most law firm prospects start their hunt for the right firm with an internet search. They open a search engine and enter terms like “Chicago divorce attorney.” Organic traffic are those visitors that find your law firm website through these keyword searches. Measuring this metric allows you to gauge the effectiveness of your keyword and Search Engine Optimization (SEO) efforts.
This KPI measures the time it takes for customers to become law firm clients. It reveals the effectiveness of your marketing strategies and tests the likelihood of turning a lead into a paying client. Extended conversion times may mean that leads are on the fence about your firm and considering other options. It can also indicate an internal problem where your firm is not reaching out to leads in a timely manner.
Response time measures the time between a lead’s first contact and your company’s response to them. This KPI is an important factor when it comes to converting leads into paying customers. Delays in lead communication could mean a lost opportunity and a waste of marketing investments because leads will look elsewhere for the assistance they need. So, you want to ensure that your firm is consistent with timely response times that meet or exceed those of your competitors.
KPIs Help Assess and Improve Law Firm Marketing Strategies
Marketing is essential for law firm success, but strategies should be reviewed on a regular basis to promote the most effective use of firm resources. With these KPIs, you firm can create a valuable analytic springboard for marketing success.