At the end of each year, business development and marketing specialists across the globe are busy identifying strategies and components to plan an annual marketing budget. Accordingly, this time around, given the season, we asked Law Firm Marketing experts across the CEE region a question: Which metrics do you look at when planning your marketing budget?
Forget about the 5% of firm revenues as the budget calculation. The only consideration and vital metric you need is how many liters of gin you will need to survive the coming year – also known as the Cost of Marketer Sanity (CoMS).
Charlotte McCrudden, Business Development & Marketing Manager, CMS
Our annual business development budget, which includes marketing, is planned based on several components. The major budget item is the cost of long-term marketing engagements, such as partnership/membership fees and ongoing initiatives with an already fixed budget. Another significant component relates to the initiatives, events, or umbrella marketing projects we do or participate in on annual basis. They differ in nature every year, so we can only forecast this expenditure item based on the analogous estimating technique. Every year, we try to launch new marketing activities in alignment with our firm’s values and CSR policy, where the cost could only be roughly estimated, therefore we make sure to calculate a higher management reserve in that item line. We also usually add an around 5% contingency reserve to the mix, for the so-called ‘known-unknowns’, as each year there are at least one or two really attractive new marketing opportunities, that pop up out of the blue and are worth taking on.
Boryana Zareva, Business Development Director, Gugushev & Partners
We normally look at how broadly covered a particular marketing event or material would be, to give a boost to Avellum’s visibility on the market. Obviously, we look at the prestige of such marketing moves, too. Finally, we also take into account whether a particular marketing instrument fits well into our overall marketing strategy, for instance, to target foreign clients or to target Ukrainian in-house counsels, etc. A piece on market entry fits well in foreign magazines, but it would be a futile effort to publish it in a Ukrainian language local magazine.
Denys Demianenko, Business Development Director, Avellum
When deciding where to allocate our marketing budget, the first thing I consider is: ‘What are we trying to achieve, and will this activity help us get there?’ This might sound obvious, but you’d be surprised to hear how many requests I get to fund activities that are not aligned with our business strategy. In an ideal situation, I favor activities which (1) demonstrate our capabilities in priority practices and sectors; (2) are aligned to our values and brand positioning; and most importantly (3) put us in front of our clients/potential clients in a way that resonates with them. Marketing initiatives that tick all three of those boxes are in the sweet spot. The other consideration is ‘bang for your buck’ – activities that reflect collaboration among multiple offices or practice groups are more likely to be funded than niche areas that benefit a single lawyer.
Amanda Lowe, Europe Marketing, PR, and Communications Director, Dentons
Obviously, by investing in marketing a law firm can expand its outreach, increase existing clients’ loyalty, gain new clients and projects, and reliably increase its revenue.
We use Return on Marketing Investment as the metric for marketing campaigns. While the ROMI calculation is straightforward, there are variables and assumptions to consider. For example, there is important information that we won’t learn about from the financials: (1) the non-financial health of the organization (e.g. employee engagement level); (2) what customers are thinking (customer attitudes); and (3) what competitors are planning.
One of ROMI’s downsides is that it is easy to recognize incremental profits in the short-term while underestimating the long-term benefits that marketing brings to brand value. Marketing activities not only affect profits in the short-term but also strengthen brand equity and client relationships over time. Investments in brand awareness and brand knowledge help clients move along the decision journey, even if they are not currently purchasing Sayenko Kharenko’s legal services.
Alyona Onishchenko, Director of Marketing and Development, Sayenko Kharenko
Marketing performance, marketing efficiency and effectiveness, ROMI / marketing ROI, and other metrics may often be used as synonyms. No matter the name, most refer to marketing strategies that reduce costs, deliver far more impact, and bring in revenue for the company.
When we embarked on our marketing budgeting project this year, we broke everything down into two segments: efficiency and effectiveness. On the efficiency side, we consolidated our agencies/vendors roster and got significantly better at comparing the pricing and scope of services vs. our business targets and goals. We then negotiated commercial terms with our vendors, including content marketing, media buying, research, and production.
The other side of the marketing ROI project included a number of different effectiveness tactics such as improved targeting; an inflow of new clients, contacts, and leads; an increased conversion rate; and an increase of RFPs and engagements – all of which are different parts of the future revenue constellation. Depending on each project goal, we may have up to ten different measures that we’ve been able to put in place and are tracking.
When budgeting for the VUCA world, deciding where to invest resources, money, and time can be a tricky task. We are trying to be more flexible, more agile, and, above all, more resilient. We set assumptions and every quarter/six months we adjust the numbers to reflect the new reality.
Oksana Buchatska, Marketing and Business Development Manager, Kinstellar
There’s no getting around it: an effective budget takes not only perfect planning but also tracking results against goals and using them to adjust the marketing initiatives going forward. As Lord Kelvin once said, ‘If you cannot measure it, you cannot improve it.’ Of course, each technique accommodates certain tracking mechanisms. In my view, at a high level there are three areas of tracking that make sense: (1) business outcomes (such as revenue growth, number and type of new and long-lasting clients, profitability, and new leads – these metrics could be tracked in the corporate financial or ERP/CRM systems); (2) visibility (measured through website traffic, traffic to corporate social media pages, or growth in the number of subscribers to corporate newsletters) and last, but not least, (3) expertise (measured through whitepaper/newsletter downloads, article views, event attendance). One accurate measurement is worth a thousand expert opinions!
Biliana Tzvetkova, Marketing Manager, Schoenherr
Firstly, I decide what I want to achieve – might be broader awareness, building image in specific areas or sectors, local or regional focus, consolidating loyalty, or targeting certain clients, etc. – but I just pick two or three of these objectives, the most relevant on a medium-term perspective. Afterwards, when selecting media partners, I mainly consider their reader/visitor’s profile, their market credibility and consistency in communication, the quality of the publication’s content, the chance to bring our message right to the relevant target, the professionalism of their people, plus specific indicators like readership, traffic, average visit duration, etc. Return on investment is typically a finance indicator and I would not push it into a marketing evaluation, since several aspects and outcomes of a campaign may not be quantifiable, while the results might spread from a short to a long run. Good luck calculating their net present value.
Titus Percea, Senior Marketing Manager, DLA Piper
At Drakopoulos, we create a marketing strategy towards delivering our firm’s strategic objectives and goals, by defining the acquisition and retention rates we aim to reach. Our goal is to build a reliable and consistent pipeline of quality leads and convert them to loyal and long-term clients. When planning our annual marketing budget, we often perform a cost-benefit analysis, taking into consideration our target growth rate, competition, risk exposure, and cash reserves at the time, while assessing the potential of any new/rising market trends that may lead to profitable practice areas. On an average basis, we invest approximately 2-3% of our annual gross revenues in marketing, including sponsorships, conferences, publications, SEO, and listings.
Marietta Vidali, Marketing Director, Drakopoulos
At PRK Partners, we believe that marketing investment is an important cornerstone of every law firm worldwide, regardless of its size or structure. Therefore, our long-standing strategy has been to spend approximately 5% of our turnover on marketing and business development.
The essential requirement for drawing up a marketing budget is to set the firm’s business goals for the upcoming year and then determine adequate marketing tools, ultimately leading to meeting the business plan and generating the projected revenues. Most importantly, we keep the budget flexible and continue to monitor and identify relevant opportunities to participate in a variety of activities throughout the year, while not averse to ad hoc budget increases when it makes sense for achieving our business goals.
Sona Rampulova, Marketing Manager, PRK Partners