Are you in marketing budget limbo-land? Perhaps, you submitted your 2011/12 marketing plan and budget for approval last year, but do not expect to hear what and how much has been approved for at least a month, maybe longer? |
Or maybe you are just starting the planning process for the next financial year?
With all expenditure under the microscope, how do you ensure that your marketing budget is planned and spent wisely to generate the maximum return on investment? Here are some practical tips for 2011.
First of all start with a clean sheet of paper, resist the temptation to start with last year's budget and assume that you will do all the things that you did last year. If you wish to achieve different results and win business from a new source, then you need to do some things differently.
Refer back to the firm's business plan, think about your headline objectives and make a broad allocation accordingly. For example, if you wish to focus on developing 50 per cent of new business from existing clients, then around 50 of the budget should be allocated to client facing activities, rather than prospecting.
Identify the two or three main firm-wide activities that must happen this year and carve out that funding accordingly. Understandably, many firms have been putting major projects on hold for the last two to three years. However a seriously dated web site will not be doing you any favours, so maybe now is the time to get on with it.
If you have departmental marketing budgets, then encourage each team to take a similar fresh approach to their planning.
In an ideal world, marketing resources need to be allocated where they are likely to yield the highest return, rather than, say to the department that shouts loudest. Try not to fall into the trap of spreading a limited budget amongst too many for the sake of fairness. A 'spray and pray' approach will achieve little if resources are spread too thinly.
Make sure departments back up the budget requests with a clear plan, dates and responsibilities - one page should suffice.
Providing a standard template for each department will help to guide their thinking and will make it easy for you to compare and combine the departments across the firm. Keep it concise. A one page A4 spreadsheet with 12 columns (one for each month plus total) with rows for each activity is easy to monitor.
Making tough decisions about where budgets should be allocated is much easier if you have reliable information regarding the fruitfulness of your various marketing activities.
How do you know whether one particular activity has delivered an acceptable return on investment? Without a systematic approach to collecting information about enquiries, opportunities and new clients, then you are forced to rely on anecdotal evidence.
Make sure you have a system to measure enquiries, whether by telephone, email or referral. Receptionists usually record all incoming calls, so they just need to record one more valuable piece of information "Where did you hear of us?"
Via your new client opening procedure you should record where clients say that they heard of you.
These two pieces of information will allow you to track your conversion rate - the percentage of enquiries that sign up to become clients.
For example Yellow Pages can be a huge item of expenditure. Do you know precisely how many clients you receive from this each year? How does the cost per client from Yellow Pages compare with the cost per client from pay-per-click, the annual golf day or referral fees, if paid?
Armed with this information you will clearly be able to see which marketing activities yield the most enquiries and which of these translate to the most lucrative work.
Both measures are important, as a high volume of low value web enquiries is not usually as attractive as a smaller number of higher value referrals.
There are always un-planned for opportunities that occur throughout the year. Some of which may be worthwhile and fit your strategy, others are simply aggressive advertising executives who try every partner in the firm to try and find a less-experienced one to agree to their 'must buy' opportunity.
Set clear policies against which you can assess opportunistic budget requests during the year. For example, "We only undertake long term pre-planned advertising".
This will help to deflect those persistent advertising sales executives, whilst enabling you to quickly identify opportunities that do fit your strategic objectives.
Double check if your expenditure is really aimed at the right clients. For example does your corporate hospitality programme reflect the leisure interests of your partners - or the preferences of your key clients? Most importantly, are there any key clients who are being neglected within the current hospitality programme?
If junior fee-earners are encouraged to participate in marketing the firm, do they have a clear understanding about how they can access budgets? Low-key entertainment such as a regular coffee or glass of wine can go a long way in building relationships.
Are you paying for online directory listings that may no longer be necessary? If the information on your web site is up to date and your personal profile on LinkedIn is detailed, do you really need to pay for expensive profiles on other sites?
Review and renegotiate
If you are renewing an existing agreement, say for advertising or sponsorship, don't just accept last year's deal.
It is most definitely a buyer's market and even if you cannot reduce the total cost, you should be able to get them to add value to the contract in some way.
We recently met with a firm who had been paying a monthly fee for their web site over a number of years. The long term cost of this web site was disturbing! This might have seemed a sensible decision a few years ago, but most new web sites are now designed with a content management system, so there is no need to tie your firm into paying for this every month.
For new activities, make sure that you test the market, for example if you are looking for a new web site, SEO agency or want a rebrand.
Take the time to put together a clear brief that you can issue to a number of providers and make sure that you understand all the costs over the total contract - and negotiate hard!
Consider new solutions
One of the most common problems that I come across on the ground is the lack of a really user-friendly contact management system (database). Practice management systems rarely do the job and the big company systems are just out of reach of most firms.
However, cloud computing now offers a really costs effective solution with easy-to use web based systems that cost just a few pounds per user. As the systems are web based- they are accessible anywhere and need no technical support.
Move to e-newsletters
E-newsletters are easily one of the most cost-effective ways of keeping in regular contact with your clients, prospects and intermediaries. Think of the savings in design, print, postage and fulfilment.
Whilst I am a huge fan of email marketing, the printed brochure and newsletter is still essential in certain circumstances, such as at events, and for certain markets, such as elderly private clients.
With advances in the quality of digital printing, you can reduce the length of your print runs and print smaller batches of brochures as required.
If a member of the marketing team leaves, do they necessarily need to be replaced with another direct employee? When you add in the potential fee to the recruitment agency, you may find that money could go a long way with outsourcing of certain activities.
For example, is it really the best use of valuable fee-earner time for them to research and draft articles for the firm newsletter when legal content can be bought in or ghost-written at a fraction of their hourly rates?
Working with a number of firms, it often strikes me how much reinventing the wheel goes on. For example, I wonder how many law firms have spent many hours researching and preparing presentations on The Bribery Act recently. How much time might have been saved if law practitioners in a single specialism collaborated and produced one presentation that all firms could use?
It may be personal
In a partnership, you need to remember that all marketing expenditure is discretionary spend and this colours an individual's views on the necessity of marketing. I remember discussing one particular activity with an equity partner who bluntly told me that he would rather keep the profits up to enjoy another skiing holiday.
Whatever the structure and strategy of your firm, hopefully these tips will enable you to stretch your marketing budget further this year.
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