How to Create A Marketing Budget and Plan for Your Firm
We get questions all the time from law firm owners who are wondering what kind of marketing will work best for them. They want to know what’s working right now and what marketing tactics will bring them the most results.
The problem is, our answer is always, “It depends.”
Of course, we have some general rules of thumb. We share marketing tactics all the time. The key is, how you apply them largely depends on your firm’s revenue and profits.
Today we want to go over what your marketing budget should be depending on the size and revenue of your firm, from brand-new to established and growing firms. We’ll also give you some marketing strategies to guide you through all of this information.
Setting A Marketing Budget
Forbes recently came out with an article titled, “How Much Should You Spend On Marketing.” In it, they said that if you want to maintain current revenue amounts, then five to 10% of sales allocated toward advertising may suffice. If you want rapid growth, however, you’re going to need to push that number higher, possibly up to 20% depending on the industry and type of business you operate.
In another article from the Small Business Administration called, “How To Get The Most From Your Marketing Budget,” they cited that, on average, service businesses spend 11.8% of their revenues on marketing.
All in all, these articles assert that if you want to focus on growing your law firm business, you should invest around 10% to 15% of your revenue into marketing. If you’re happy with the level of business you have, you still need to spend on marketing, though. You need some sort of marketing just to stay steady.
Marketing Depending On Your Firm’s Size
These percentages are fairly general. You need to customize your marketing budget depending on your firm’s specific size and revenue.
If you’re just getting started and your revenues are less than $200,000, you really shouldn’t be budgeting much more than $20,000 on marketing. That might even be too much. You have a lot of other operating expenses so if you can’t spend $20,000 on marketing and still have a comfortable salary, don’t spend that much.
Instead, invest more of your time into marketing and build sweat equity. There are many ways to improve your marketing without putting money into it. Work on growing your referral network, building your email list, and protecting your referrals.
As your firm grows and you start making more revenue, you can increase your marketing budget to stay in that 10% to 15% range. You might also be able to afford more targeted marketing at this point. This includes offline marketing such as billboards, bus signs, running ads, magazines, and church bulletins. You could also start putting more money into SEO and paid online ads.
Measuring Your Marketing
When you begin implementing marketing strategies, you need to measure the results to make sure you’re getting a good ROI. Track your data and refer to it often. Once the data shows that your firm is profitable based on the cost per lead, you can start investing even more. This is how firms scale up to seven figures and beyond.
If you want to learn more about marketing, check out Episode 071: How Does Your Revenue Dictate Your Marketing.