Service industries such as legal and accounting are very competitive. Surprisingly they still lack behind when it comes to estimating the cost of their marketing campaigns. This article is about some basic measures you can adopt to calculate the ROI of your digital marketing campaigns. You want to make sure your investment is well calculated and spent.
How to estimate ROI?
We can start to understand how the return on investment looks for other industries. It is expected that for each 1000€ of investment in online marketing campaigns the return is around 2-3 times higher than that. For instance, when you invest 500€ in marketing you should receive in return at least 1500€.
In the legal and accounting markets the return is expected to be slightly higher, around 3-4 times or even more. But why this return is slightly higher? Many businesses are not aware of the benefits digital marketing has. These businesses continue doing marketing using outdated and traditional methods. This leaves a gap to firms that invest in digital marketing to take advantage of and be the first ones to position themselves in search engines. This advantage will not last for long. As businesses will adopt more and more new marketing methodologies is going to be more challenging to stand out.Before starting to estimate the ROI on a marketing campaign, we must consider:
- Which are the goals of your firm
- What structure your firm has
- What budget is available for marketing activities. According to recent research performed by Thomson Reuters on average law firms invest 2% of their revenue in marketing and business development activities.
- Which is the firm’s target market
This information is the starting point to define an ROI driven digital marketing strategy. We always advise consulting with a marketing specialist for a more customized solution that will adapt to the needs of your business.
ROI Driven Digital Marketing to reach your firm’s goals
Do you know how much capital you should allocate to your marketing budget? Have you wondered if you are spending your money in the right places or if that investment is effective?
If we were to go a bit more in-depth about estimating your ROI driven marketing strategy, we would estimate from each acquisition channel what it cost to acquire a new project, business or referral.
- New Business
- Existing Clients
- Professional Referrals
From the mentioned three channels we estimate the following aspects:
- Billing amount coming from each channel
- Which marketing channels have been used to nurture, attract and maintain each acquisition channel, i.e. Advertising, Events, Existing Client, Referral – Client, Referral – Professional, Website.
- How the budget is allocated for each one of the three categories
- Analyze which is the most profitable and effective acquisition channel
- Optimize marketing budget to obtain a better ROI
This is an example to get more in-depth variables that are analyzed for each marketing acquisition channel. As the goals and results to achieve are defined the formula gets more complex and is what makes it imperative to consult an expert in this topic to obtain better guidelines.