The 2 Golden Rules of Planning:
- The Plan is the plan until the plan changes
- Any Plan beats no plan
As we get closer to the end of 2008, it’s time to start thinking about budgeting for your marketing efforts in 2009. In an ideal world, your 2008 marketing plan worked to perfection and creating the ’09 plan is simply a matter of tweaking the current plan. Unfortunately, this is rarely the case, and in fact, many law firms don’t specifically budget for their marketing efforts, but rather carry out ‘hit or miss’ marketing activities sporadically throughout the year, and spend discretionary funds over the course of the year. Obviously, this is not the ideal way to manage your law firm as a business. Imagine if the Chief Financial Officer of General Electric told his CEO that he wasn’t sure how much GE was going to budget on Marketing for 2009, but instead was going to “play it by ear.” He wouldn’t be the CFO for long. So, why is your law firm any different?
There is no question that a focus on marketing is needed to maximize your revenue. Regardless of the state of the economy, your competitors are marketing their firms and you need to as well. As importantly, assuming you are spending money on marketing efforts, if you don’t budget, it’s impossible to identify your true ROI, and you are probably throwing money away.
A good starting point for the budgeting process is to prioritize the activities that you want to focus on in the coming year.A good place to start is by gathering the costs of the individual marketing activities that you undertook in 2007 and 2008.This should include everything from yellow page ads and website costs to LexisNexis and advertising expenses, as well as money spent on entertainment of clients and prospects.Once your list is compiled, objectively identify how those activities performed. This may be difficult unless you are tracking intake, website statistics, and other indicators. However, if you are going to spend the money, you might as well track the investment and doing so isn’t as difficult as it sounds.
A couple words of advice:
- There always seems to be a few sacred cows in the marketing budget (like sports tickets that go unused). If you have sacred cows, that’s fine, but if they don’t contribute to new cases or clients, don’t classify them as marketing expenses.
- Secondly, established activities often still require some funding – websites need updating, ad campaigns need freshening, etc. Typically, you should keep using those activities that are providing value, and if applicable, spend more in those areas. For those activities that are providing minimal value, budget less.
If there are other activities that you want to include in your 2009 plan, identify conservative cost estimates for these new initiatives. Prioritize the activities based on cost / benefit, focusing on those that have the biggest bang for the buck. You may be amazed to learn that some of the lower cost initiatives may have a huge return, while some of your highest expenditures may bring very little value.
Now you are ready to identify how much you plan to spend on for your overall marketing plan in 2009. Again, you can start by identifying the current and previous years’ budget and then identifying what is changing in your business plan: are you moving into new areas of law? Are you planning to expand into new geographic areas? Has competition increased? Plan your budget accordingly – remember, new initiatives and expansion typically require additional funding.
Once you understand both your budget and the prioritized list of specific activities you want to undertake, you can build your plan. Remember, the better the analysis – the better the plan.The better the plan – the better the return.