What is a signed case worth to your firm? How much would you be willing to pay to generate a signed case? These are the most important questions when assessing the return on investment from your paid law firm marketing.
What is ROI?
Return on investment, or ROI, is the value of a signed client case subtracted by the cost to obtain said case and then again divided by the cost incurred to acquire the case.
For example, a campaign that drives cases with a total value of $1000 on $500 of total spend would have an ROI of 100%. For paid marketing, this can also be called ROAS, or return on ad spend, but the general concept behind both remains the same. A high ROI means the paid marketing is working, while a low or negative ROI means that changes need to be made to increase incoming leads’ volume or quality.
How is ROI measured?
The two keys to measuring ROI are conversion tracking from the paid campaigns and accurate and timely intake information from the firm to measure ROI properly. A firm can track leads back to the paid platforms as their source through website tracking codes, call tracking and parameters set on the landing page URLs for the paid campaigns. While essential and valuable to know, this only tells half the story. When combined with the intake feedback and valuation of the leads driven in, we can see the whole picture and determine if the paid marketing is working.
For example, a firm could be getting 100 leads from one paid marketing campaign with a $1,000 budget and only ten from another with the same budget. Without feedback from the firm on intake or value, the campaign with 100 leads seems to be the better performer by a large margin. However, if the firm reports back that the 100 leads resulted in one signed case worth $1,000 and the ten leads from the other campaign returned 2 cases worth $10,000 each, then that changes the narrative dramatically. In that scenario, the 100-lead campaign would have an ROI of 0%, and the 10-lead campaign would have an ROI of 1900%.
Here are some factors that can affect the ROI of a paid campaign:
- Some firms are more discerning than others on the cases they will accept. Lower signing rates will negatively impact ROI, so it is important for the firm and marketing agency to communicate and exchange feedback to focus on balancing volume and quality.
- Likewise, some case types will have lower signing rates and need a higher volume to get a positive ROI. Again here, communication is paramount.
- The type of lead is also a key factor in ROI. For example, a phone call may be more valuable for some firms than a form submission or live chat (or vice versa). If that knowledge is made available to the marketing firm, they can optimize the campaigns to focus on driving more of the higher value conversion types.
Why is ROI important?
Every type of law practice is going to have different returns on signed cases. At PaperStreet, we work exclusively with law firms, so we have a good understanding of what types of cases are worth more to a firm, but, in general, a marketing agency will default to driving volume over quality if not given any direction on value or return. For that reason, both the firm and its marketing agency need to identify and target case types that will have the greatest return for the firm.
Once case value is understood, and ROI is calculable, this can benefit the paid marketing campaigns. For one, unprofitable campaigns can be adjusted, optimized, or outright stopped to move ROI in a positive direction. Another benefit of knowing ROI is that the firm would not be at risk of potentially shutting down a profitable campaign due to the surface appearance of costs without the corroborating data on return. Additionally, a high ROI would indicate that the firm may want to continue investing more in the paid marketing for as long as the returns remain positive.
Contact An Experienced Marketing Agency For Help With Your Marketing Strategy And To Understand Your Paid Marketing ROI
If your firm is running or thinking about running paid marketing, make sure you communicate your case value and ROI expectations to your marketing agency. With paid law firm marketing being as competitive as it is, understanding and focusing on these metrics is key in achieving successful and profitable results from any paid marketing campaign. At PaperStreet, we know the law and website marketing, and we understand how to get the most out of paid marketing for law firms. Contact us to find out how we can start growing your client base today.