Customers do not find your business for free. To attract and retain paying clients, your firm will need marketing dollars for branding, advertising, digital media, commercials, public relations, and more. Think of it this way – no one can hire you if they do not know who you are or how to find you. This means that your firm needs to prepare to spend marketing dollars.
Marketing spend induces anxiety in a lot of small business owners, but it doesn’t need to. There is a quick and efficient way to measure the impact and effectiveness of every marketing dollar spent. It is the simple equation of cost-per-acquisition. Cost-per-acquisition helps you to compare the money you paid to secure a client against the money you wind up making off of that client.
Let’s illustrate the concept with an example. A local cleaning service is looking for new clients. They come up with a name, let’s say Lickity Split Cleaning, and pay an artist $50 to draw up a logo. They then place an ad in the local newspaper using that new logo. The ad costs $150. If only one person calls and hires them for service, their cost-per-acquisition would be $200, but if five people call and hire them, the cost-per-acquisition drops to a mere $40. Let’s say that the logo and ad lead to 5 paying clients. If each client pays $100 for an hour of cleaning, that brings their total income to $500, or $300 net profit. They received a $300 return on their $200 investment.
The exact same principles can be applied to a more complicated business like a law firm. The money you spend developing your website, purchasing ad space, and creating news stories should all be compared to the amount you make from converted clients. Digital marketing may not be as cut and dry as a local ad with a phone number on it, but it is infinitely scalable and can create powerful revenue streams for your business.
The best part is that with digital marketing, changes can be made and implemented quickly. When it comes to traditional media like print ads, changes cannot be made after publishing. Online, changes can be made at any time, which means that you can fine-tune your marketing message as you discover what clients respond to best. Marketing is essentially conceptualizing, testing, measuring, and adjusting. The more marketing you do, the more adjustments you make and the stronger your pipeline can become.
Small business owners make the mistake of assuming that uncovering your cost-per-acquisition is complicated. It is as simple as doing the math. If you track your marketing spend, are honest about what your customers bring in, and adjust marketing efforts following newly acquired knowledge, it is difficult to be wrong.
Stop thinking about marketing as an elusive and hard to pin down expense, and put in the work to discover the best marketing spend for your law firm.