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? Enter 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?
Lilley: Measurement of ROI is extremely important. Positive ROI is a crucial component in driving investment strategy for marketing and business development activities.
Enderle: The 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.
Kaiser: 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.
Berardi: 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.