Unlike last year, where calendar-year firms extended budgeting (rather, budget cutting) into Spring, this year many of them are done. They planned ahead, and locked down the budget submissions in September. This December must be infinitely more jolly and relaxed than last.
The question nags firms, though . . . “I’ve allocated from 1.5-4% of budgeted revenue to marketing/sales — what return will I see on that?”
On April 15, 2010, I will facilitate my second panel discussion of marketing partners and managing partners for the Dallas LMA Chapter — this time on ROI and metrics. What do firms expect of marketers when it comes to return on investment? If they spend a dollar do they expect an additional dollar in return? How do they measure success?
A December 3, 2009 BusinessWeek online post called, “Beware Social Media Snake Oil” had this paragraph about ROI:
“Many argue that a fixation on hard numbers could lead companies to ignore the harder-to-quantify dividends of social media, such as trust and commitment. A Twittering employee, for example, might develop trust or goodwill among customers but have trouble putting a number on it. “There is this default assumption that return on investment is the correct measure for everything,” says Susan Etlinger, senior vice-president at Horn Group, a San Francisco consultancy. “Everything needs to monetize within 12 weeks, so we can understand that we’re successful. But frequently the thing they’re measuring is misleading.
“This can lead to confusion. The risk is that a backlash against the consultants’ easy promises could reduce social media investments just as the industry takes off. Think back to the dot-com boom a decade ago. Soaring valuations were based initially on promise and hype. In early 2000, when investors started focusing on scarce profits, the market collapsed. But many companies drew the wrong conclusions. Believing the fall of a hyped market was a sign of the failed promise of the Internet, they drew back on Internet investments. This happened just as the technology was on the verge of living up to much of its promise, dominating global communications, transforming entire industries—and spawning social media.
“The best way to avoid a similar backlash today is for social media’s practitioners, including thousands of consultants, to shift the focus from promises to results. It may be the only way to convert the skeptics—and flush out the snake oil.”
The last line — “shift the focus from promises to results” — makes sense for every aspect of marketing budgets that must live in today’s law firms. It means that lawyers with pet projects who are betting on the come must recognize that if pet-project results are elusive, they’ll soon be evening-out.