Totum report: ROI on law firm marketing expenditure still elusive
The 2017 Law Firm Marketing Operations Index, conducted by consulting firms Totum Partners and Calibrate Legal, surveyed marketing leaders, including Marketing and BD Directors and CMOs, at the largest law firms in the UK, United States and Canada. The 68 participants were asked to rate their firms’ performance in seven categories of leading business practices demonstrated by the highest-performing marketing/BD organisations across all sectors, including:
- Business Alignment and Accountability
- Marketing Performance Management
- Marketing Data
- Business Processes
- Revenue Enablement
- Systems and Technology
- Talent and Knowledge.
‘The findings show that law firm marketing leaders are generally confident that their teams are well aligned to the business needs of their firms,’ says Tim Skipper, Managing Director at Totum Partners. ‘But they do not believe they are effective in measuring the performance of their marketing/BD function. Nor do they seem to think this is critical, even though this is a priority across other sectors.’
‘CMOs are not confident that their firms meet best-in-class standards for the operation of a Marketing/BD department,’ adds Jennifer Scalzi, founder and CEO of Calibrate Legal. ‘This points to a viable area of opportunity in an industry that is particularly hungry for competitive advantage.’
Of the seven categories of Marketing Operations proficiency covered by the survey, Marketing Performance Management stood out as an area for attention. Marketing and BD leaders rated their organisations low on ability to measure the performance and business contribution of their organisations – particularly on the critical metric of Return on Marketing Investment (ROMI), which is widely used in other industries to allocate marketing spend.
‘Our research shows that CMOs understand the value of measuring return on marketing investment, but are not institutionalising that measurement,’ Scalzi says. ‘Those that can confidently capture the performance of their marketing programmes will be well positioned to achieve sustainable revenue growth.’
Reinforcing this issue are the study’s findings on Marketing Data in law firms. Respondents appear to agree that improving marketing data – including quality, access, and capability – needs to be a priority for their teams. In particular, they believe that their firms need to focus on Customer Relationship Management (CRM) data, including information on the firm’s clients and lawyers’ interactions with them.
‘The ability to measure marketing’s contribution starts with reliable marketing data,’ says Skipper. ‘We believe Marketing & BD Directors need to look at data & analytics as a core marketing competency, and set expectations around this competency for their teams.’
The research also identified Revenue Enablement (the degree of alignment between marketing and sales activity) as a problem area. The responding Marketing & BD Directors/CMOs reported high performance scores on the tactical elements of revenue enablement, such as creating and maintaining sales collateral and marketing materials. However, they are much less confident that their teams are strategically aligned. For example, few respondents report that marketing supports a standard BD process, has internal accountability for the firm’s revenue pipeline, or is measured by contribution to revenue.
Other findings in the joint research project included:
- Marketing/BD leaders report excellent working relationships with their IT Directors/CIOs and IT organisations – a positive sign for the future of marketing technology at law firms.
- Lack of integration among law firms’ various marketing technologies remains a critical pain point for Marketing & BD Directors/CMOs.
- Few of the respondents report that they track the satisfaction of their internal clients (lawyers and business developers) with marketing & BD’s services.
‘Our research makes it clear that law firms have not fully embraced the principles of Marketing Operations: increasing marketing efficiency and organisational agility; aligning marketing activity with revenue growth, and measuring activity and people in a systematic way,’ says Scalzi. ‘There is some very rewarding work ahead for the firms willing to lead the charge.’
‘As in other industries, the business leaders that marketers serve are motivated to wring the greatest possible value out of the firm’s marketing expenditure,’ concludes Skipper. ‘If law firm marketers can’t prove that value over time, the Marketing/BD budget will inevitably be reduced or restructured.’