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ROI Research: Increase Revenues by Measuring Business Development Initiatives

By Larry Bodine, Esq.

Law firms could earn a lot more revenue from their marketing and sales efforts if they just did one simple thing: measure them effectively.  This is among the insightful findings of an ROI research report "Increasing Marketing Effectiveness at Professional Firms," published jointly by Expertise Marketing LLC of Concord, MA and my firm, Larry Bodine Marketing.

This is the first study of its kind reported that collectively the respondents spent a paltry sum - less than one-tenth of a percent of an aggregate $94 billion in gross revenue -- on formally measuring marketing and business development. 

The 148-page report includes 68 pages of valuable case studies in which 18 marketers in accounting, law, architecture, real estate, engineering and other professional services gave interviews on their marketing efforts and how they measured them.

The report and case studies are on sale for only $225 in the LawMarketing Store, at http://www.lawmarketing.biz/store/product.asp?dept%5Fid=11&pf%5Fid=288, in two PDF format downloads for $225.

Partners and senior executives are hammering marketers to improve the ROI of their marketing and sales efforts and even justify the value of their jobs. Now, for the first time, we have a verified link between competitive effectiveness and the intentional act of measuring. Marketers and business developers should immediately switch to activities that can be measured, and get out of doing the rest.

My research partner Suzanne Lowe, President of Expertise Marketing LLC in Concord, MA, and author of the bookMarketplace Masters added, "Until now, professional service marketers have had to fly blind and on a shoestring in measuring their programs' effectiveness.  Our findings provide breakthrough insights about which metrics work, which ones won't, and why." 

Our two marketing and research companies conducted a six-week unblinded Internet study.  A total of 377 respondents from a broad cross-section of professions, including: accounting, architecture, construction/general contracting, engineering, environment & energy consulting, executive search, human resources consulting, information technology consulting, law, management consulting, real estate, marketing, and several other professional services sectors.  Individual respondents included marketing directors, managing partners, CEOs, marketing and P.R. managers and marketing partners. 

Among the 15 key findings of the report:

1. Respondents' highest ranking initiatives reveal a strong link between marketing and sales.

2. Professional firms that said they were extremely effective used three particular client-focused metrics in combination with each other.  These three are:  a) Growing client revenue:  "Did you grow revenue with your client or not?" b) Moving the phases of a sale through a pipeline:  "Did you close the sale or not?", and c) Listening to the client:  "Did you listen to your client or not?"

3. Only 20% said they were "extremely effective" in growing revenues against rivals; nevertheless, the more Client Metrics a firm used, the more it said it was extremely effective in growing revenues against rivals.

The Marketing Effectiveness report outlines the four steps that a professional firm must take to succeed at achieving marketplace leadership.  As such, it is a roadmap for marketers to follow, and makes clear which activities are a waste of time.  "Professional service firms do have the ability to compete more successfully in today's marketplace," said Suzanne Lowe. "They must expand their firm's marketing beyond simply acquiring clients.  They have to do significantly better at using meaningful, non-ignorable marketing and business development metrics."

Marketers in all fields faced obstacles to measurement, with the most common complaints being, "Our people aren't inclined to measure / It's hard to change their mindset / Measurement is not viewed as a worthy activity / Our people avoid accountability / Measurement is perceived as too hard, too costly and too time-consuming."  Lowe showed no pity, saying, "Measurement obstacles are largely self-caused and are related to inertia and avoidance of accountability.  Now that we have verified the powerful punch that formal measurement provides, there should be no more excuses to avoid it."

The report goes into depth on which marketing initiatives are the most effective. It also singles out the three worst: forecasting (i.e., envisioning future economic and business scenarios), analyzing market share and alumni outreach programs.  "Marketers should dump those programs, and fast," Bodine said.

So which professions say they are the most "extremely effective" at marketing? In order:

1. Construction/General Contracting.

2. Environment & Energy Consulting.

3. Engineering.

4. Accounting.

5. Architecture.

The laggard professional services firms can clearly learn a lot from the leaders.

Reporters can find a 18-page summary of the study online at http://www.lawmarketing.com/Summary of 2006_study_results.pdf

Participants and sponsors of the research will receive copies of the findings and companion case study for free.  The report and case studies are available for sale in the LawMarketing Store, at www.LawMarketing.biz/Store, in two PDF format downloads for $225.

Full post as published by Larry Bodine's LawMarketing Blog on June 30, 2008 (boomark / email).