How Do You Determine a Marketing Budget for Your Law Firm?
So you know that you need some marketing, right? Web sites, business cards, maybe a TV commercial or a radio jingle. That much is clear. What isn't so clear is how much you should spend on marketing. You want to spend enough that you get a quality product, but you're a lawyer, not an ad agency.
It can be tough to figure out what the sweet spot is so that you don't overspend on marketing. So how do you come up with a marketing budget?
Run the Numbers
First, you need to know how much money you're making. A marketing budget isn't a fixed number; the rule of thumb, according to the Small Business Administration, is that small businesses making less than $5 million in revenue should spend 7-8% of that revenue on marketing costs.
Of course, the SBA goes on to point out another assumption in this figure: That your profit margin is 10-12%. If your margin is less, it will be up to you to decide whether you want to sacrifice more profit for ad spending.
Pick a Strategy
Before you spend money, you'll also have to take into account what things cost. TV advertising is the most expensive type of marketing, and while you'll reach a large audience, you'll also be spending a lot in the process.
Consider also, says Entrepreneur, where you are in your firm's life cycle. New companies need to spend more initially because no one knows they're there. As you become more and more established, you can devote less of your revenue to marketing. Also, are you exploding into a new practice area or just expanding an existing one? Doing something brand new will cost more than merely growing.
Data, Data, Data
It's not just your favorite TV android: Data are crucial for knowing whether the plan you've implemented is working. The SBA reminds us that marketing plans are flexible; if you discover that your brilliant plan to paper the town in flyers isn't bringing in the business, it might be time to pick a new strategy. Constantly reevaluating your marketing plan's efficacy ensures that you're not wasting time and cash on something that's not working.
If you're going with an agency to help you, it can be hard to know whether you're getting a good value. Most agencies keep their "rate cards" a secret from competitors and non-clients, but expect to spend multiple thousands of dollars on even a small agency.
The good news is that "full service" ad agencies are going the way of the giant BigLaw firm, and for the same reasons. Clients don't want to pay for services they don't need, so they turn to boutique firms that specialize, for example, in just branding or in just Web design. Make sure you're not paying for a buffet when all you want is a few potatoes.
If you're looking for marketing help in this crazy atmosphere, consider FindLaw's Lawyer Marketing. They have the tools and the talent to help you with as much or as little marketing as you want.
- Three Steps to a Solid Marketing Budget (Forbes)
- Developing a Marketing Budget (ABA Law Practice Magazine)
- Does Your Firm Need a Marketing Manager? (FindLaw's Strategist)
- 5 Law Firm Marketing Chores for a Slow Time of Year (FindLaw's Strategist)
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