I moderated a panel yesterday at the LMA Dallas City Chapter (subgroup of the LMA Southeastern Chapter) luncheon on ROI. Panelists included:
To anchor our remarks in the day-to-day reality of our LMA members, I created a survey for them to complete in advance. The Dallas City Group has 82 paid members, and this survey had 29 respondents.
Each panelist spoke of how and what they are measuring in their firms. I asked the question that all marketers fear hearing, “What are we getting for all the money we are spending?”
Both Allen and Tim rushed to say – if you’re getting that question, you’re in trouble. It means you haven’t done your job. They confirmed an approach that is focused on industry penetration, client growth and success with client targets as the best way to truly measure ROI. Allen simply said, “ROI is the return to shareholders of profit. How much that profit is compared to the investment you’ve made . . .” is where the true test of effectiveness is. Allen has a target of 100 to 1.
Tim noted something that struck me: When a partner asks the question above, she is really asking, “what did I get for the investment? How did it benefit me?” It’s a personal question, not really about the firm at all. Haynes and Boone has deployed business development managers who are embedded inside the practice/industry groups. They are the ones who answer this personal question – long before it’s asked.
All three panelists agreed that you have to keep a running inventory of the activities and initiatives that are supporting the firm and practice/industry strategies – because that’s what lawyers see and frequently want to track.
13 survey respondents said they provide metrics reports to partners – primarily monthly or quarterly, but 16 respondents do not provide reports. And in another question, 19 respondents do not have a standard procedure or process for measuring return on marketing and business development expenditures.
Bill Livesay spoke of a slightly different approach, and he started by noting the firm’s entrepreneurial culture. There are certain expectations that partners have, based on the culture of the firm. A firm that has a top-down, institutional business approach would have different measurement and reporting expectations than one where partners are more self directed. He stated that it’s imperative for the marketing team to have enthusiastic managing partner support, and Allen and Tim agreed.
Most of the survey respondents measure ROI, ROA (return on activity), ROO (return on objective), or some combination of all of these. 6 respondents said they are not measuring any of these.
The 3 main reasons for measuring ROI? An equal number of respondents said: establish the value that marketing adds to the firm, realign/reallocate resources if things aren’t working and understand bottom line business results.
Activities and initiatives that are being tracked or measured by respondents include:
- Web site visits/traffic patterns
- Seminar attendance/conversion rates
- RFP/proposal conversion rates
- Client satisfaction
- Market perception of practices/firm
- Market share of groups of clients (by industry, association, etc.)
- Wallet share of client
Respondents included: 16 marketing directors/marketing managers, 3 have business development as their primary responsibility, 3 CMOs, 2 executive directors, 1 partner and 4 others who were coordinators, consultants or vendors.
One respondent asked, “what are we seeing on the horizon when it comes to ROI, what’s next?” I think the ROI of lateral partner hiring and integration will get more scrutiny, which means it will also be viewed more frequently as a long-term strategic investment. I hope, anyway.
Thanks to Allen Fuqua, Bill Livesay and Tim Powers for their leadership in this area.