Four CMOs Explain The Importance of Measuring and Tracking Marketing Activities To Determine and Prove Return on Investment

Lee Brookes • January 25, 2021

INTRODUCTION

Few would disagree with the old saw: “You have to spend money to make money.” But how much money? And use it for what? How do you decide? E nter the need to measure the return on investment — or ROI — for your marketing and business development spending.

We asked several CMOs for their views on using ROI in their roles of shaping and managing their firms’ marketing and business development efforts. What follows is their insight.

How important is the measurement of the ROI of marketing activities within your firm?

Certain marketing and business development activities require more ROI than others if the firm plans to continue its investment from year to year. For example, targeted meetings through a third-party organization require that type of ROI, especially those activities in a higher price point. Advertising does not typically produce an ROI that we measure. Our firm thinks of advertising as a consistent way to brand and expose our firm name. That type of expenditure does not always allow for ROI tracking.

he sluggish demand for legal services, brand parity among firms, and increased competition for new and existing clients are the new paradigms firms and their marketing departments will continue to face in 2015. Intuition, anecdotal feedback and faith that mass communication, such as blind advertising and marketing campaigns based on “what other firms are doing,” are strategies of the past. Today, our management team and our attorneys recognize that our marketing strategy is grounded in marketing planning based on real information and not gut feelings and hopeful thinking.

But effective change is a process. Our journey from a communications-focused marketing function to that of a business development-focused marketing discipline has been one of evolution, not revolution. We work closely with our department and practice group leaders to identify targets, focus our messaging and plan marketing tactics that are realistic and can be measured.

Measurement of ROI is extremely important. Positive ROI is a crucial component in driving investment strategy for marketing and business development activities.

Determining ROI in the world of legal services is not always so easy, especially due to the complex nature of the business development cycle, as well as the lengthy period of time from initial contact to ultimately securing new matters from an existing or prospective client.

Given that the pathway to success is often not exactly linear, my approach is to collect and use data to the fullest extent possible, but also to realize that there are times when we simply need to rely on our gut to make good decisions, regardless of whether the data at hand fully supports that particular course of action. Measurement of ROI is extremely important. Positive ROI is a crucial component in driving investment strategy for marketing and business development activities.

What are you measuring and how?

Are there any specific tools or processes you are using or plan to implement?

The most typical way to measure ROI is through word of mouth of the partner in charge of that particular activity. Although that does not always work, the partner in charge is usually responsible and holds significant influence for those particular expenditures. So, it is in the partner’s best interest to report on what ROI came out of a particular marketing or business development event or strategy.

One school of thought is that all marketing ROI can be measured and that the standard formulas and calculations hold all the answers. If it were that easy, law firm marketing today would be on par with consumer product and media/technology companies in terms of marketing proficiency.

Law firm marketing, like all professional services marketing, is relationship-based and much more relative in terms of how sales originate. We began by measuring the modest metrics on which our marketing team can have the greatest influence such as:

Email open rates
Website click-through rates and other analytics
New matters resulting from client satisfaction interviews
Proposal win rates
Repeat event attendance rates
New matters resulting from events, seminars and CLEs
Article placements with target audiences

Certainly, tracking the marketing budget investment toward these and other activities helps in calculating the hard dollar ROI. But what about effort? Existing marketing ROI calculators do little to account for the resources and time involved in marketing planning and execution.

In addition to metric measurement and ROI calculations, we also track the time of our marketing team against specific projects such as proposals, communications writing projects, events and marketing technology projects. This helps not only with external-facing marketing projects but also in determining where marketing resources are being used, including non-strategic, one-off marketing requests by attorneys. The time tracking analytics are a huge benefit when planning strategy with firm leadership and in reporting where marketing resources beyond budget are being spent.

We are working with our CRM vendor as part of a pilot and development group for a new CRM opportunities module that we hope to implement this year. This new tool will allow us to better track several existing and new metrics as part of an integrated platform within our CRM tool. It will integrate much of the tracking we are already doing, but puts it all in one place and ties it to specific target individuals, companies and marketing activities.

We measure ROI from pitches/proposals/RFPs, from events and from specific media initiatives (traditional PR and social media campaigns).

With pitches and the like, we’re measuring success by whether or not we secure work. With formal RFPs, immediate or quick answers to that question are generally achieved. With more general pitches, the timeline is far less precise, and there can be significant lead or investment time before we know whether we brought in the work.

With events, we use a more graduated measure of success: Were solid leads secured? If so, have those led to a follow-up meeting, a pitch or a new matter? This is a longer-term process and measurement scheme.

Our traditional and social media campaigns have clearly defined goals, but they differ based on objective. For example, we may want to raise the profile of a particular attorney, practice or office, and a media campaign may be designed around that. The success of that sort of campaign would be measured using a number of factors involving Web statistics. On the other hand, a social media campaign focused on promoting a particular blog or a mobile app we’ve launched might be measured in terms of numbers of app downloads or new subscribers.

We use a variety of measures to determine ROI from our marketing and BD activities, including Web statistics/traffic, social media subscribers, blog subscribers and app downloads, as well as revenue business and revenue generation, we are old school: We use spreadsheets, some homegrown databases and plenty of direct follow up with attorneys.

How are you reporting those analytics to the leadership at your firm

We also provide a brief, quarterly update to our executive leadership team and attorneys. Like anything, it is a process to inform, educate and influence the behaviors of our attorneys, marketing department and firm toward marketing programs and tactics that influence our target audiences, clients and prospects.

In the end, it is really about moving from casting wide nets with mass communications toward segmented activities that reach defined audiences and individuals.

We provide quarterly statistics on blogs, the Web, marketing communications and client alerts, and business development efforts in a report distributed to all attorneys. We also report, more anecdotally, on business development success in a biweekly newsletter to all employees and attorneys called Fox Tales.

Additionally, we routinely provide focused ROI reports as part of strategic decision-making on investments in individual lawyers, certain geographies, sponsorships and initiatives.

I typically communicate these findings on a regular basis, using both informal and formal methods. This includes detailed CMO reports during management committee meetings, presentations to the partnership at annual retreats or during monthly video conferences, and in various other venues.

Additionally, there are opportunities to present or introduce information in less formal communications such as internal email messages, in discussions while conducting lawyer training programs or in one-on-one conversations with partners or administrative management. The point is to make sure our lawyers and other stakeholders understand that our goals and objectives are grounded in some underlying data that help inform our actions and behavior. My experience has been that we usually obtain support for our activities much more quickly if we openly share the data that we are relying on for our decision-making process in a transparent manner.

How are you using that data to inform future marketing decisions?

Basic arithmetic shows which strategies are working and which are producing minimal, if any, ROI over a two-year cycle in engaging in a particular marketing activity. We are successful at attracting new clients and matters, which is easy to show and document. That data confirms the use of these particular activities works, and that affects future marketing decisions.

We definitely are driven by ROI. We want to see tangible results whenever possible, and when initiatives deliver positive ROI, we continue to support them or replicate them.

We try to ensure that the data and research we collect is actionable in some way. After all, the data collection process is a means to an end, not an end in itself.

We review the information or research results to assess progress (or lack thereof) and to determine steps to address defined goals and objectives. If the methodology is sound, the data really shouldn’t lie, even though the potential always exists that it might be misleading. In short, the data analysis process can help justify a continued course of action if the evidence is supportive, or it might mean that changes should be made to the business plan if the results are surprising or unexpected.

What else can you tell us about what your marketing department is doing in regards to measurement, analytics and tracking ROI?

The more information and input the marketing and business development department receives after any activity or strategy, the better the structure and vision of the department grows. The firm can be conservative about innovation, and we are careful in our approach to the expenditure of marketing dollars. It is best if we can show any type of ROI.

If you accept the basic premise that marketing fundamentally exists to drive revenue, then marketing should be rooted in analytics. When data isn’t properly collected and reported, flawed assumptions and poor decisions likely ensue, and moreover, it will be nearly impossible to connect marketing or business development activities to revenue growth.

We expect members of our marketing department at all levels to track and measure their efforts so that they have a better sense of what is working and what is not. It isn’t enough to simply gather the data, though. Team members are also encouraged to share their discoveries with other members of the department, as well as with firm leadership, and include their thoughts on recommended action steps in light of the data. In this way, our professionals are empowered to ensure our team is collectively moving the ball down the field.