PILMMA members know that I’m a real stickler when it comes to return on investment (ROI). If you can’t track it, I say don’t do it. You have to know how much each marketing channel – each lead source – costs for each case it generates and the consequent revenue for your law firm.
As I’ve written previously, John Wanamaker said:
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.“
By tracking the ROI and the revenues from every activity, you can know what’s working in your marketing, how much it’s costing you and how much it’s making you.
So perhaps you can understand why I don’t want to spend money on anything where I don’t know what the ROI will be.
However, there is one exception.
The exception to this golden rule of ROI is when you try something new.
An idea that has been tried in one law firm may not generate the same ROI as you will by implementing the same strategy in your law firm.
Or perhaps you’re thinking of trying something that simply hasn’t been tried anywhere else before.
Would you let an expenditure on a new strategy – with an unknown ROI – stop you from experimenting in the first place?
Only experimenting will let you know whether the strategy is a winner. Only by experimenting will you be able to calculate the ROI.
Not knowing the cost of a new strategy or tactic does not stop me pursuing it.
I can’t ask myself “What’s the ROI going to be?” So instead, I ask myself, “Am I happy to lose this sum of money if this doesn’t work out?”
Place A Bet
It’s the same question responsible gamblers ask themselves before placing a bet. That’s the giveaway here – you’re taking a gamble on a new strategy or tactic because you don’t know how it’s going to work out.
Years ago I would enjoy a trip to Atlantic City for a serious game of poker. I’ve grown out of that now, but the gambler within me remains – at least as far as spending money trying and testing new strategies and tactics in my law firm. I’ll invest in an experiment if I’m happy to lose that sum of money. If the sum is too big and I’m not willing to lose that amount without a return, then I won’t take the risk.
I explained in a webinar yesterday that if a law firm owner is really determined to succeed, they’ll make sure they do whatever is necessary to reach their goals and invest their money when required.
I’m a law firm owner who is determined to build the preeminent law practice in my market and I’m willing to do what it takes. So I will take that gamble from time to time and by doing so, I put myself way in front of the other law firms whose owners won’t take any risks.
That doesn’t mean they’ve made a bad decision. I tell people that while I like to learn from my mistakes, it’s a lot cheaper to learn from other people’s mistakes. As the President of PILMMA, I get to hear about a lot of expensive mistakes and I take pleasure in helping others, including myself, avoid them. As the President of PILMMA, I am also pushing constantly for our firm to aim higher. There’s always room for improvement and I like to build successful businesses, so I’m not going to wait for everyone else to prove something works.
I’ve been in practice for over 32 years and legal marketing has never evolved as rapidly as it is right now. The Internet and Social Media have seen to that. Frankly, I don’t have time to wait for others to prove something works.
Successful entrepreneurs have a number of common character traits. From Warren Buffet to Ray Kroc to Sam Walton to Richard Branson, I know you will agree with me on this point: they are all individuals who never waited for someone else’s research before making a decision if they were able to go out and find out the information for themselves.
So ask yourself, do you want to achieve the heights of success as an entrepreneur?
Are you willing to take a reasonable gamble once in a while?