What are marketing KPIs?Key performance indicators, better known as KPIs, are the metrics used to quantify the effectiveness of your business’s marketing initiatives. Marketing KPIs reflect your business’s progress towards a certain goal, such as increasing traffic to your law firm’s website or enhancing the number of contact forms completed within a month. The purpose of marketing KPIs is to allow business owners to track the success of their efforts over time. By constantly monitoring these metrics, lawyers can more effectively determine which strategies are working and which aren’t, and adjust their objectives accordingly. In other words, marketing KPIs help ensure that marketing efforts are bringing in money, not just spending it.
Why are KPIs important for small law firms?Unlike national law firms with hundreds of attorneys, small law firms and solo attorneys don’t have an exorbitant marketing budget. For a small law firm to remain profitable, it must be able to keep tabs on the amount of money moving out of the business and how that number compares to the revenue that’s brought in. Failure to monitor KPIs over time leaves a small firm at risk of overspending on marketing to the detriment of total business cash flow — spending more on marketing than the potential return on investment (ROI). Likewise, it casts doubt over which marketing efforts are truly worthwhile. By setting KPIs to track over time, business owners no longer need to speculate if and how marketing efforts are profitable. Instead, owners can track specific metrics over time, adjust initiatives for smarter spending, and predict future results for more informed decisions.
12 marketing metrics all law firms should monitorMost law firms already track key metrics like billable hours and collections and consider how these numbers factor into cash flow. However, you also need to monitor marketing KPIs or factor in how these efforts can positively or negatively impact overall operations. Here are 12 marketing metrics every small law firm or sole practitioner should monitor to gauge financial performance.
1. Phone CallsMost service based businesses still get the majority of their business via phone calls. But most marketing firms don’t setup tracking to measure the effectiveness of this nor do they thing make phone numbers easily found and clickable (click-to-dial) on your website. This is critical as most web searches these days come from mobile devices.
2. Form SubmissionsThe second most common way a prospect may communicate with you from your website is your web forms. Be sure that whoever you partner with for your law firm’s website sets up conversion tracking for each critical form on your website.
3. Traffic to your contact or main call-to-action pagesAnother thing we often see overlooked is the tracking to what we call “money pages.” These pages are most commonly your call-to-action pages such as your contact page or order form, for instance. It is important to know that your marketing efforts are getting the RIGHT people to the RIGHT pages. As the old saying goes, “you can lead a horse to water but you can’t make them drink.”
4. Site visitsSite visitors refer to the quantity of web traffic to your website over a given period. This metric includes internal users (like employees), anyone working on your website, and external customers. It’s helpful to exclude the IP addresses of all employees and web developers to narrow this metric to true external customers only. Then, this KPI can track fluctuations in customer traffic over time. Unique visitors refer to the number of different IP addresses that reached your website. Each IP address amounts to one unique visitor. So, if your law firm’s website had 7,000 visits and 3,500 unique visitors, it means that each visitor was on your website twice on average. To find both site visits and unique visitors, head to your site’s Google Analytics account. In Analytics, toggle to Audience on the top left of the page and click Overview. The top graph will display the total site visits as well as unique visitors over the last 30 days, which you can monitor to determine how different marketing efforts bring potential customers to your site and which are most effective.
5. Bounce rateBounce rate refers to the percentage of site visitors who exit after only viewing one page. As a marketing KPI, bounce rate demonstrates the effectiveness of your content. If visitors are leaving your site without taking action, your content is likely not having the desired effect. There are several reasons why your content may not be effective, including:
- Your call-to-action (CTA) is unclear
- Your content is not what they expected
- Your content is difficult to read or visually confusing
- Your website is not loading correctly (or quickly)
Ad MetricsIf you are running ads, you’ll also want to track these:
6. Ad impressionsImpressions refer to the number of views you receive on a specific advertisement, such as a paid search ad or social media post. An impression is counted each time your advertisement is shown on a search results page (SERP), another website, or social media. Each time your ad appears to a web user, it’s counted as one impression — even if viewers don’t engage, click, or hover on the ad. Impressions help reveal how often your advertisements are seen. A large number of impressions means your ad is likely to reach a wide audience, which increases the chances of conversion. However, if you have a high number of impressions with little to no engagement (more on this later), you may want to rethink your strategies, such as ad placement or your target audience. To discover the impressions for a Google advertisement, head to Analytics and toggle to Behavior. From here, click on Events, then Overview, where you can view impressions under Advanced Ads in the Event Category list. For Facebook or Instagram, monitor impressions from the Business Account, where you can find profile analytics under the Insights section.
7. Click-through rate (CTR)Click-through rate, often abbreviated as CTR, refers to the percentage of users who click on a specific link in relation to the number of total impressions. For instance, a paid ad with 1,000 impressions and 20 clicks has a CTR of 2%. The CTR for your initiatives can be found in the same place as your impressions, either under Advanced Ads in Analytics or Insights on social media.
CTR = Clicks ÷ Impressions x 100CTR helps measure the success of various digital marketing initiatives, including paid ads, social posts, and email marketing efforts. As a marketing KPI, a higher CTR means users find your content useful and will complete a contact form, whereas a lower CTR implies your content is not resonating with your target audience. Tracking this KPI helps refine how you speak to your audience over time.
8. Engagement rateEngagement rate is similar to click-through rate but with slightly different parameters. Engagement rate monitors the amount of interaction with a paid post in relation to the impressions. Rather than just clicks, engagement also tracks metrics like shares, likes, comments, and messages. In other words, engagement measures how many users saw the content versus how many interacted with it. You can calculate your engagement rate by dividing the total engagement on a single post by your amount of impressions or followers, like so:
Engagement Rate for Impressions = Total Engagement on a Post ÷ Total Impressions x 100
Engagement Rate per Post = Total Engagements on a Post ÷ Total Followers x 100Like CTR, your engagement demonstrates how well your content is received by your target audience and is often reflected in newly completed contact forms. If your impressions or follower count is high, but your engagement rate and number of newly submitted forms are low, that may be a sign that your marketing messaging is off-target and could use some refreshing.
9. Cost per lead (CPL)A lead is an individual who has shown interest in your law firm’s services. The primary goal of marketing is to increase your number of leads to subsequently increase your number of conversions and, ultimately, the number of clients and billable hours your business generates. Cost per lead, abbreviated as CPL, refers to the amount of money it takes to generate one new potential customer for your business. To help quantify the cost-effectiveness of your marketing, especially search and social ads, CPL assigns a dollar amount to each lead generated by your marketing initiatives.
CPL = Total Marketing Spend ÷ Total Number of New LeadsTo determine your CPL, sum up all marketing expenses, from paid ad budgets to graphic design costs on your website. Then, add up all your new leads based on how many new contact forms have been submitted. Finally, divide the total expenses by your total leads to reveal your CPL.
10. Customer acquisition cost (CAC)A lead is not a customer, just a potential customer. That’s why there’s another KPI to track how much it costs to turn a lead into a paying client for your law firm. Customer acquisition cost, abbreviated as CAC, includes all of the costs involved in turning a lead into a billable client.
CAC = Cost of Marketing and Sales ÷ Total Number of New Customers AcquiredFor law firms, CAC often involves pure marketing costs, such as paid ads, as well as sales tactics, like dedicated time for a complimentary consultation or case review. Though these might be free to your customer, they will cost your business valuable labor hours. These hours should be included in your total marketing and sales costs to understand which methods are most efficient for your business.
Other important metricsThe following metrics may be harder to track but we strongly encourage you do.
11. Referrals in, referrals outReferrals in, referrals out is a ratio of incoming referrals to outgoing referrals. Though not a digital marketing KPI, this traditional marketing KPI for law firms indicates the effectiveness of your ongoing networking efforts. After all, referrals are a significant source of new clients for legal teams. There is no set number of referrals that should come in or out of your practice; rather, the amount of incoming and outgoing referrals should simply be in balance with one another. For instance, you wouldn’t want to make 10 referrals for other practices, just to receive one in return. Enhance your local networking with other practices to grow your ratio of incoming and outgoing referrals.
12. Return on investment (ROI)Last but certainly not least, return on investment (ROI) refers to the profit or loss generated from the amount dedicated to marketing initiatives. This marketing KPI is essential for small law firms to conceptualize if their initiatives are worthwhile or effective at meeting objectives.
ROI = ((Revenue – Total Marketing Spend)÷ Total Marketing Spend) x 100To maintain positive cash flow, it’s integral that your marketing efforts continue to generate a positive ROI. When marketing spend is outweighing revenue, it’s time to review the above metrics to learn which marketing initiatives are draining resources rather than nurturing leads.
Take the guesswork out of your marketing with TitleTap’s Bottom Line DashboardOur bottom line dashboard is a proprietary tool that makes it easy to see how your TitleTap website is working for your law firm. Instead of spending time learning how to navigate Google Analytics or updating various spreadsheets, you can pull up your dashboard and see the metrics you care the most about, such as calls, emails, or website visitors, on one screen. Ready to take your website and marketing efforts to the next level? Request a free demo here.
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