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missed opportunity cost of law firm marketing

The Cost of Missed Opportunity: Is Your Law Firm Losing Money?

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How Much Money is Your Law Firm Losing By Using Big Box Marketing Companies. Find Out Your Cost of Missed Opportunity Here.

The old saying holds true, “you don’t know what you don’t know.” In the legal industry, every interaction with a potential client can have a butterfly effect. Every detail concerning how to choose to run your firm can potentially have an enormous impact on your overall success or failure. But, how do you know what opportunities you’re missing?

Or, let’s reword that to better get your attention. How do you know how much these missed opportunities are costing you?

If you practice law in a business to consumer environment, such as personal injury, criminal defense or family law, your potential clients engage with your brand regularly. That is, if you have enough brand awareness for them to do so. The way you engage with them represents an opportunity. 

Types of Missed Opportunities

Obvious Missed Opportunities

When you talk to a satisfied client, you understand that this is an opportunity to turn them into a brand ambassador for your law firm, promoting your firm to his or her peers.

On average, a happy client tells 9 other people. When your client is happy with your services, that client’s value actually increases, since they’re more likely to help you gain future customers.

On the flip side, when a client is unhappy with your services, you lose these benefits. 

So, the cost of missed opportunity here looks like this:

Cost of missed opportunity = (Customer value increase x customer lifetime) + (9 x customer lifetime value)

When you engage with a dissatisfied client, you should do your best to turn them into a satisfied customer, or at minimum, a customer who wouldn’t hurt your name or brand image. On average, unhappy clients will tell 15 other people. So, when you miss the opportunity to make the client happy, this cost is much bigger.

First, you lose a client that you spent time and money acquiring, plus all of the revenue that he or she could have helped you generate in the future. You also reduce your chances of acquiring new clients that are in their network.

The cost of missed opportunity here looks like this:

Cost of missed opportunity = Customer acquisition cost + customer lifetime value + (15 x customer lifetime value)

Silent Clients

In the legal field, for every complaint you receive, 26 other clients remain silent. These previous clients may or may not be happy with the services you provided. One of the most common reasons why silent clients don’t engage is that you don’t make it easy enough for them to talk with you about the issue. The effort that is required to reach out surpasses their frustration.

If you were more available to discuss their frustrations, they may reach out, giving you a new opportunity to save face before they churn. 

The cost of missed opportunity here looks like: 

Cost of missed opportunity = 26 x number of complains x cost of dissatisfied client

Abandon Rate

Unlike the silent clients, some of your clients have things to say and prefer to have the conversation with you, personally. However, when they reach out through the channels on which you’re available, they regularly end up having to wait. When the wait time is short, they may hold. But, in many cases, the wait time is more than an already irritated client will want to deal with.

We’ve also seen legal intake systems that are built to discourage disgruntled clients and get them lost before they can actually talk to someone. So, the client hangs up before he or she gets to speak with you. This is what we call the abandon rate.

The missed opportunity here is again, satisfying the client. By avoiding angry clients who actually prefer to come to an understanding, you run the risk of having that person turn into a detractor. 

The cost of missed opportunity for this client is:

Cost of missed opportunity = number of calls dropped x cost of dissatisfied client

Non-Monitored Channels

You’re probably wondering “what do all of these scenarios have to do with my marketing campaigns?” Simple. We’re just setting you up to drop the bombs of missed opportunity.

The internet, as you know, is public. There are those that talk to you and those who talk about you. And, while learning to care less is great for your personal life, it’s not so great for your firm’s brand.

Lots of previous clients and people, in general, may be talking about your brand without talking to you directly. And, if you don’t monitor every online channel to catch these conversations, you will end up missing opportunities. 

Good conversations will exist on which you could monetize, unsure potential clients that you could convert, angry clients who worked with you previously that you could reassure, the list goes on. When you monitor online channels, this allows you to reduce the risk of bad-buzz controlling the communication. 

The cost of missed opportunity, in this case, is enormous and very hard to estimate. Like we said in the beginning, you don’t know what you don’t know.

How well, on average, do you think your current marketer does running interference on your behalf? Do you have someone that actively monitors online channels for you? Or, do you make it a point to put out potential fires yourself, after you’ve worked all day? Just something to consider. 

Public Comments

You already know about review platforms such as Avvo, Lawyers.com, Martindale, etc. However, most lawyers fail to address Google my Business, the most important review platform of all.

Google my Business covers every industry, gathers more reviews than any other platform, and directly impacts your SEO. None of the other legal review platforms do this. 

If you have a practice with multiple locations, it may be incredibly difficult to manage all of them. Regardless if you created the pages for the locations or not, your potential clients will leave reviews and create Google my Business pages for you, in order to leave a negative review, if your page isn’t already set up. 

Knowing that almost 95% of your audience will read online reviews before hiring you should encourage you to read what people are saying about you online. 

Furthermore, 54% of consumers will visit a website after reading a positive review. So, you should push consistently for more positive reviews, especially on Google my Business.

As a side note: Avvo and Findlaw can be good sources for reviews, but in reality, we feel as if this is more lawyers tooting their own or their colleagues’ horns. Most of your potential customers are not going to create an Avvo or Findlaw account to look for you when the information is readily available on Google. 

So, what happens when you don’t monitor your online reviews? What happens when you don’t respond to negative feedback or positive comments about your firm?

Typically, negative comments will start to pile up, and those who read them see that you aren’t trying to justify your actions or make things right. It looks as if you don’t care. This hurts the relationship you have with every commenter and reader, as well as hurting your image. It makes you miss the opportunities of readers who may have hired you otherwise. 

For this case the cost of missed opportunity looks like:

Cost of missed opportunity = number of negative comments x average number of view per comment x cost of dissatisfied client

When you look at that formula, take a look at the second value: average number of views per comment. This number will only continue to increase as time passes, because as we all know, the internet never forgets. It’s important to remember what we said earlier-that 95% of your audience will read online reviews. This means that the second value in this equation is infinitely important. 

Missed Opportunity Cost of Quality Online Marketing

If you’ve been around long enough, you’ve seen the rise and fall of advertising trends. Those who invest their marketing budget into new methods consistently tend to prove themselves to be the industry leaders. Very rarely will you see those at the top of the food chain become comfortable with their current marketing strategies.

The first sign of comfort with your overall marketing efforts indicates that you’re already starting to fall behind the competition. Someone else will always be out there searching, researching, testing, and familiarizing themselves with the campaigns of tomorrow.

Yet, we still continue to see law firms becoming comfortable with their same marketing efforts from the same big box marketing companies. Those same companies that, to be completely honest, never did much in the first place. 

PPC Campaigns

One of the core components of our work as a legal marketing agency is auditing PPC accounts and the overall digital media buying plan of both our clients and prospective clients. And, quite frankly, the number of missed opportunities and misguided investment from prospects is staggering. 

What’s even more jaw-dropping is that we see most of these missed opportunities within the accounts of large advertising agencies that claim to specialize in the legal industry. And, while many of these oversights are relatively small when isolated as a single instance, the act of fixing them all can deliver huge improvements in performance.

In order for your campaign to succeed at the highest level, your account manager needs to have integrity and initiative. They should do the right thing, regardless if you’re going to find out or not, and they should take it upon themselves to actively put in effort to improve your campaigns, because it is the right thing to do.

If you regularly speak with your account manager, do they give you the impression that you’re just a number to them?

PPC is one of, if not the most effective advertising channel. The potential success also brings an equally large potential for mistakes, oversights, or downright neglect, when it comes to your campaigns.

Many of the problems that your firm keeps encountering with respect to online marketing could actually be remedied with experience and initiative to make the campaigns better. The problem is that it’s extremely difficult to find agencies who have both.

Most of the lawyers we speak with truly believe that as long as they’re doing something, advertising wise, that their firm will be fine. That may be the case for now. But, as the technology advances, the way online advertising operates will change. If your current marketing agency is giving you the minimum or even the average ROI, it won’t be long before your marketing strategy will be left in the dust.

Cost of missed opportunity = ROI with a quality marketing agency – current ROI

Let’s put some actual data behind this. Most of the PPC campaigns that we audit from other companies average from 50% ROI, which is actually losing you money, to 200-250% on the higher end. In order to break even on your investment, you need your ROI to be at least 100%. At Digital Logic, those same campaigns are now running anywhere from 200-400%. 

So, let’s say that you invest $2,500 a month on PPC advertising. We’ll assume that your current marketing company charges the same amount that we do. It’s unlikely, but we’ll extend the benefit of the doubt, here, for time’s sake. To be fair, we’ll split the difference between their highest and lowest averages we’ve seen, and we’ll do the same for our PPC campaigns. 

If on average, the big box PPC management company brings in a 175% ROI (being generous) and Digital Logic gives you a 300% ROI, at $2,500 per month, the equation would look like this:

We calculated these numbers to be as fair as humanly possible. These numbers also assume that your current marketing team will at least move in the right direction, as trends change, despite the fact that we’ve seen no evidence of this in the past several years. Like we said, abundantly fair calculations, here. 

This isn’t even the kicker, though. We have more…

Local Service Ads

Most of the lawyers we’ve spoken with have a general understanding of what PPC advertising is and how it’s used to market their firm online. But, it seems as if this is where the marketing knowledge stops, on both the attorney side, as well as the big box marketing agency side.

Those that benefit the most from online marketing are those who invest in companies that are always ahead of or at least in line with the current marketing trends. For example, if your current marketing team hasn’t reached out to your firm about investing in local service ads, you’re already behind. And, the longer you wait to add these types of ads into your marketing strategy, the further behind your firm will be. These campaigns typically provide a considerable return on investment.

How often does your current marketing team try to get you more bang for your buck?

At Digital Logic, we’ve added local service ads into the mix for many of our clients. In the legal industry alone, we’ve seen the average ROI for some sectors increase exponentially, just by investing in different types of ads and rethinking our marketing strategies. 

Here are some of our current stats using local service ads for our clients:

These are actual numbers from our actual clients, who actually practice law. The chart above isn’t a would have, should have, could have, estimated scenario. It’s what we’re making our clients right now. On average, our current LSA ROI yields from 185-710%, with the majority of those numbers being on the 300% plus side. 

Let’s take that same thought process we had earlier, except we’ll average out all of our legal LSA numbers, since we have them here, and apply them to this scenario. Feel free to plug in the ROI associated with your practice areas to see how much you’re missing out on. 

Don’t Miss Any More Opportunities

As a lawyer or legal professional, you’re well aware that “time is money”, so most of the time, you try to work smart, not hard. We get it and try to do the same in our world. Your time is valuable, but so are our services. Making the time to at least look into your current marketing situation could put you ahead hundreds of thousands of dollars. As much as we realize how busy you are, when you avoid the task of checking your own missed opportunities, you’re not working smart, you’re working hard, for less. 

As a practicing attorney, you know that ignorance is never an excuse. What’s your next move?

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