Response-Based Marketing Tools

The deep, dark secret of so-called "marketing gurus,"
advertising agencies, and practice-building consultants...

These people make money by selling you marketing "stuff." I say that they are selling you dreams.

See, they make money by promising you more clients. Their objective is to sell you the most amount of advertising or "marketing gimmick" you can afford. Not to get you results.

In other words, they do not want you to be able to hold their marketing activities accountable.

They do not want you to know if you are getting clients because of their product or service... or if you are just getting clients that you would have gotten anyway. (Perhaps... you are getting clients despite their product or service?)

It Gets Worse...

Most lawyers get the bulk of their clients from referrals, but never know where or when a referral is going to come.

Most lawyers also waste thousands of dollars every month on networking activities, advertising, and marketing gimmicks... without knowing if these things are working.

But, you're not "most lawyers." You're a PremiumPractice.com Lawyer. A smart lawyer.

And, smart lawyers know that you can predict -- with mathematical certainty -- where your next client will come from.

How would you like to know -- with mathematical precision -- where your practice will be... a year from now?

To Get Where You Want to Be,
You Must First Know Where You Are

Let's begin at the beginning.

To be successful, you must only spend time and money on proven marketing techniques. Not on marketing techniques that other lawyers say works, but on marketing techniques that you know has worked for you in the past and will continue to work for you in the future.

Once a particular marketing approach has proven itself, you will know to spend more time and money on a particular referral source or marketing technique. Sounds logical so far, right?

This brings us to the next topic...

How to Scientifically Monitor
the Results of Your Marketing Activities

Right now, you might have a vague idea of where most of your clients come from.

But -- do you know which referral source or marketing method produces the best "return on investment?"

For example, do you know who made the most referrals over the last 6 months, the last year, or the last 5 years? Do you know who made the second-most referrals last year? Do you know -- with certainty -- which potential referral sources to lavish with attention?

Do you know -- with mathematical precision -- which advertisement or Internet marketing method produces the most telephone calls? And do you know which produces the highest ratio of inquiries-to-appointments... and high-fee clients?

If not, then you're not systematically monitoring your marketing. Don't worry -- I'll show you how. It's easy.

In a moment, I'll cover the math -- how to calculate "return on investment" -- but first, let's learn how to track your marketing.

Tracking your marketing is very simple. In fact, you probably already do it informally -- you probably ask your clients "How did you find me?"

You can also track your marketing results by using "tracking codes" -- for example, different telephone numbers or different extension numbers for each marketing technique.

(Please see my article on "split testing" for a discussion on tracking and improving advertising results. If you do not advertise -- then please continue reading.)

You should keep track of your results using a tracking sheet like this one: (click here to view or right-click and select "save as" to download)

(If you cannot view the document properly, you may need to first install Adobe Acrobat Reader software, which you can get by clicking here. If you need help downloading the file, you may click here for instructions.)

You want to track referrals separately, because you want to be able to specifically pinpoint who refers the most, the second-most, and the third-most. You want to reward these people by thanking them lavishly, so that they continue to refer in the future.

Is this magic? No, it's called the Pareto Principle, which states that 80% of your results come from 20% of your efforts -- and 20% of your results come from 80% of your efforts.

(The ratio is not always 80/20, by the way. It could be 70/30 or 90/10. The point is that causes and effects are almost always disproportionate to each other).

Here's the magic: When you identify the most productive 20% of your marketing activities... you can get rid of the other 80%... and make almost the same amount of money... with less time, cost, and effort.

To put it another way: If you get rid of the unproductive 80% of your marketing, and focus on multiplying the 20% -- you get...

One of the ways to focus on that 20%... is to focus on the marketing methods that produce the highest "return on investment."

Here's the mathematical formula for calculating "return on investment" (R.O.I.): Revenue divided by marketing cost.

For example: Let's say you spent $500 on a small advertisement in a trade journal or newspaper. Let's further assume that you retained one client from that advertisement, and you generated $3,000 in fees from that client.

Your R.O.I. is: $3,000/$500 = $6/$1. In other words, for every dollar you spent, you received six dollars back. Therefore, your R.O.I. is 6.

Notice that most referrals will have an R.O.I. of infinity. In other words, if you spend zero dollars and get a referral worth $3,000... and you try to calculate $3,000/$0...

Your return on investment is so high,
it actually causes your calculator to display an ERROR message!

And that's why your #1 priority should be to concentrate on getting referrals. Some referrals, however, cost money...

For example, let's assume that you regularly represent Fortune 500 clients. Let's further assume that it is common practice to treat your former clients to expensive steak dinners. Those dinners are the cost of your referrals, if those clients refer. (They're also the cost of repeat business, but that's a different discussion...)

How to Mine the Hidden Profits in Your Marketing
(Here's what will really separate you from the other attorneys.)

Most attorneys get frustrated with marketing techniques that do not show an immediate response. And so they abandon the marketing technique... and many times, they unwittingly throw away future profits... simply because they didn't have enough patience to allow a particular marketing method to work.

You see, as time goes on... your R.O.I. will grow larger and larger, because you will earn more fees from each marketing method over time. For example...

Let's assume that you advertise in the local business trade journal, which costs $3,500. When you first advertise, you may only get one client who pays you $7,000. Your R.O.I. is only 2, and it seems like this may not a be a good source of clients. However, let's further assume that you get another 7 clients after 3 months, and you make $49,000 in legal fees, at a cost of $14,000. Now your R.O.I. has jumped to 3.5.

If you hadn't been patient, you would never have discovered that the cost for this trade journal ad was about the same as if you paid referral fees for these cases ($14,000/$49,000 = 28.5%).

Another example: Let's suppose that you sponsored a local Little League baseball team. The total cost: $1,000 for the year. Let's assume that you don't get any clients the first month... and that you don't get any clients at all until... the third month. During that third month, you get a call. A baseball player's parents heard that living wills help benefit their children by avoiding the probate process. Right after you hang up the phone, you get another call. The coach needs a good divorce attorney. All in all, you make $6,000 in legal fees that month (an R.O.I. of 6).

If you hadn't been patient, you would never have discovered the profitability of this community sponsorship.

There are other special situations, as well. For example, a personal injury attorney who takes cases on a contingency fee will not see a return for many months... perhaps years.

Mathematically, it's easy to explain: More revenue divided by the same cost equals more "return on investment."

For these reasons, you should also calculate the R.O.I. for the "Year to Date." The following example shows how to do this, along with a couple of other things -- "Appointments to Date" and "Clients Generated to Date."

These four tools -- "Client Source Tracking Journal," "Referral Diary," "Return on Investment Worksheet," and "Marketing Results Chart" -- will help you increase your profits. You'll know where you should spend more of your time, energy, and money... and where you should not.

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