In these challenging times, the use of analytics is certainly not the highest concern for most law firms or for their clients. Amid health concerns and economic fallout, combating the virus is priority one. Close behind are concerns about being able to pay employees and keeping organizations afloat.
When this crisis passes, a new normal will emerge. In fact, it is already taking shape.
In this new post COVID-19 environment, analytics will become an even more critical tool for surviving and thriving in the law industry. But the data sources and the way in which data is used may very well be changed for good.
Before the Crisis
People and businesses have been pursuing data analytics for quite a while now.
Slicing information in new ways was especially exciting in the early years. Client data, firm data, industry data… you name it.
Trends that have long been hidden within all of that historical data became remarkably clear with data visualization techniques. This kind of clarity enabled the data to deliver what once felt like unimaginable insights. Insights about clients. Insights about industry trends. Insights about the firm itself.
It was amazing and everyone wanted it.
But very quickly, new techniques emerged and models that considered only internal data that was, for the most part, backward-looking became “very 2006”.
A shift began to happen at many started realizing that:
- forward-looking analytics, rather than backward-looking analysis, would soon be a must
- driver-based, forward-looking analytics becomes even more effective when elements of external data are also considered
As firms embraced the idea of moving toward external data and forward-looking analytics, opportunities opened up. Alternative data sources began gaining traction. Now, these external alternative sources are being more widely understood and used.
During the Crisis
And then this happened. COVID-19. A crisis like no other.
Data enables the virtual experiences that keep us connected and collaborative. Remote access to banking, the gym, groceries, virtual meetings, has been critical during this difficult time.
During times of crisis, however, economists have traditionally used historical data to forecast market activity in order to design stimulus and recovery plans. The unprecedented and unpredictable nature of the pandemic renders historical data largely useless.
When the crisis began, inexperienced business leaders were tempted to hunker down, thinking that tightening their belts would protect their businesses. Many who have chosen this route are bound to lose opportunities, market share, trust and see their businesses fail.
Maybe during the time when land, labor and capital were the most important resources, this strategy was more understandable. However, good data has superseded those traditional items as the most valuable resource.
More experienced firm leaders, who make the decision to leverage technology to take advantage of information in ways that humans cannot, are seeking ways to work through the crisis.
These leaders realize that data provides answers during times of uncertainty and they know that investments in data and analytics should be accelerated rather than abated.
Like it or not, decisions are increasingly being made by data rather than humans. And alternative data is proving to be the best decision maker by far.
Here are just a few ways that alternative data sources provide insights:
How well do your clients understand their supply chains? There can be as many as eight or more participants in a supply chain? What if one of those participants falters?
What kind of technology integration options are clients expecting from firms? Understanding the array of economic factors that impact your firm and your clients at any given time is essential. You should know when changes occur in industry conditions, expectations and benchmarks, as well as competitor pricing and service offerings.
The same concepts apply to diversity. New contenders like accounting firms and consulting firms are taking business away from law firms. New information is constantly emerging for diverse products like mutual funds. Law firm business models are evolving every day. External data is a must.
After the Crisis
Now that COVID-19 has changed the world for the foreseeable future, hindsight analytics are even less valuable for businesses.
As economic conditions change, KPIs and financial goals must also change. In order to demonstrate and instill confidence in employees and clients, law firm leaders must understand the wide array of financial risk scenarios. Doing so requires – again – deep, broad, forward-looking and external data.
Why Should Our Firm Embrace Forward-Looking Analytics?
To understand the benefits of leveraging external analytics, consider the two examples below.
Social Media Marketing – Embracing Change
Social media marketers embraced a learning curve.
They gradually moved from analyzing only incoming data about client brands, products or services, to incorporating analysis of external data about competitors and the industry in general.
This was a game changer.
Reports can now uncover trends in whatever topic is important to the target audience. Whether it’s industry trends for job titles, job growth or salaries, public data can be turned into gripping and insightful information. In today’s world of information overload, data like this can be powerful in shining a spotlight on important opportunities.
Taking the transformation one step further, you can find the most sophisticated players leveraging external data to perform outreach in reaction to any mentions of the brand or products.
Law Firm Mergers – Not So Much
In 2018, there were 106 law firm mergers and acquisitions in the U.S. This is a record high, according to the ABA.
Blane Prescott, a management consultant and CEO of MesaFive LLC, says, “Mergers work best when they cross-fertilize with better clients and better work. Mergers should create partner-initiated cross-selling to access new market segments.”
Prescott admits that law firms tend to underperform when it comes to the due diligence for such mergers. Now is the time to change that.
The best and most effective due diligence will incorporate forward-looking external data.
Here’s the thing:
Because so many law firms resist change, the few that take advantage of this opportunity to leverage data in a more effective way can gain tremendous competitive advantage with relatively little effort.
Organizations that have already realized that hindsight analytics don’t move the needle for them are pivoting toward alternative data sources. They are developing economic and analytic architecture that provides visibility to firm leaders by creating prospective income statements that will redefine the future of their companies after the global crisis.
As the global economy continues to endure COVID-19, the pressure is increasing on law firm marketing departments. As firms face challenging times – some seeing higher demand and others struggling to make ends meet – marketing strategies must adapt.
One marketing strategy underutilized by law firms, especially during challenging times, is content marketing.
Right now, investing in your firm’s brand has never been more important.
The law industry has been slower than other industries to adopt content marketing as a strategy to attract and convert business, so there is a significant opportunity to gain competitive advantage by getting in the content marketing game.
Well-designed content can help firms not only survive during this crisis but come out the other side actually stronger than before.
How? Consider a few facts about content marketing:
- Content marketing builds brand awareness, trust and loyalty.
- Content marketing attracts and converts leads. Sales thrive behind content.
- The ROI from content marketing is good for your bottom line. It’s significantly more cost-effective than traditional advertising.
Even if you are convinced that content marketing is the key to your firm’s post-pandemic success, it’s likely you have a long road to travel in order to convince decision makers to make a new or larger marketing investment during an economic downturn.
Budget Obstacles During a Downturn
Firms without a formal marketing plan for crisis-management may balk at the idea of investing in content in 2020. Too often, decision makers feel that the safe move is to pull back and slash budgets.
However, the opposite is actually true. Silence is a serious mistake. Content marketing informs your target audience.
With a good SEO strategy, you’re going to be discussing topics that potential clients need and want to know about. Once informed, those potential clients see your brand, and your firm, as a thought leader guiding them back toward a sense of normalcy.
But how do you get the budget approved when times are lean?
It all comes down to proving that a solid return on investment is forthcoming.
Overcome Objections by Proving ROI
Firm leaders understand that, without a strategic effort to go to market and develop new business, the firm simply can’t survive.
However, many firm leaders are not familiar with what is possible with content marketing. And, more importantly, most firm leaders are not clear about what the metrics look like and what exactly can and can’t be measured in terms of return from content marketing.
Predicting ROI is always a challenge, and it is especially difficult for content marketing considering the effort is largely focused on increasing goodwill with clients, contacts and leads.
So rather than trying to predict ROI the old-fashioned way, firms will benefit from taking a different approach. Proving ROI is a better strategy and it can be done by carefully evaluating, measuring and improving ROI.
Proving ROI of any marketing strategy to firm leadership will:
- Demonstrate the importance and the impact of a content marketing strategy with cold hard data.
- Identify specific areas where content marketing is most effective.
- Uncover areas where adjustments are necessary.
- Support the legal marketing department in better understanding the target audience, their pain points, and what drives them to take action.
- Justify and secure a content marketing budget for the future.
5 Steps to Evaluating, Measuring and Improving Marketing ROI
Step 1: Set the right marketing objectives.
What are you setting out to accomplish? Establish marketing objectives that are aligned with your firm’s overall business goals.
- For example, if the firm’s goal is lead generation, the content marketing strategy should focus on the top of the funnel and the ROI must be calculated based on number of leads generated rather leads converted or dollars earned.
Once you identify what you want to achieve, clearly articulate how to get there. And be specific.
- For example, if your goal is to generate new leads, that’s not specific enough. Quantify how many new leads or by what percentage you want to increase landing page traffic each month or each quarter. Then be sure to consistently measure performance in those distinct time-over-time increments, like month over month, quarter over quarter, and year over year.
Step 2: Choose the right metrics to monitor performance.
To measure how well your content is performing, websites and social platforms have reporting tools that marketing departments can easily use.
But first, you must determine the right metrics for the objectives that you’ve chosen.
Keep in mind that return won’t necessarily be in dollars. Depending on what you’re trying to accomplish, metrics for monitoring return might include any one of the following:
- likes, comments and shares
- engagement and traffic data
- lead generation indicators like content sign-ups or downloads
- qualified lead distribution for follow up
- conversion ratios and timetables
Step 3: Understand the real costs of content marketing.
You need to know how much you’re investing in content marketing.
This includes the cost of:
- tools and platforms
- employee time
- outsourced content creation
Even if you outsource, be sure to consider employee time and resources spent editing, publishing and monitoring the performance of the content.
Step 4: Identify your firm’s leading growth drivers.
When designing an ROI measurement process, start slowly with low hanging fruit.
Where is the most potential for growth?
Begin with a review of the most significant changes in revenue. Whether you find it’s a particular office or a particular area of the practice, this is a good place to focus your efforts for establishing or recalibrating metrics to measure ROI.
- For example, if a significant portion of your business stems from your current client base, be sure to track the percentage of work your firm is handling against the total work available from each client. This will provide a clear starting point from which to begin designing strategic objectives for driving ROI.
Step 5: Continuous Quality Improvement
Of course, you’ll want to continuously improve your ROI from content marketing.
By continuously refining the process, you’ll end up optimizing strategies and ultimately converting more business for the firm. The good news is that the previous steps will provide rich data to help with this process.
- As you test different publication platforms like blogs, articles and whitepapers, you’ll be collecting data about which format resonates best with your target audience.
- Seek to identify opportunities for spending in a more effective manner. Comb through data to see where efforts are and are not paying off. Then make adjustments accordingly.
According to one study, the average mid to large size B2B firm wastes 25 cents of every dollar spent on content marketing due to inefficiency.
Of course, firm leaders already know that during an economic downturn, efficiency is imperative when it comes to spending. However, too many firms are reactive when it comes to such a review. It must become a regular process and tackled with a proactive approach.
Content has proven to be a cost-effective solution for building trust and brand awareness. These same attributes make content marketing indispensable during a crisis.
As industry leaders recognize how important it is to invest in content in today’s economic environment, the only question that remains is: which firm will act fastest and most effectively?