When cash flow is tight and times are tough, one of the first things people do is look for ways to cut the marketing budget. People typically cut marketing budgets for one simple reason – they don't have the money to spend.
But it’s always important to cut for the right reasons. “I’m short of funds" is not a marketing reason. From a marketer’s perspective, the welfare of the company depends on the marketing budget. You have got to be spending time, if not money, to market your practice. If you are cutting that budget only to reduce costs, then you need to decide what to do with your wholesale to fill your pipeline.
So how do you measure the worth of your existing marketing activities and know what you should cut? Or how do you defend how you are spending your marketing dollars?
Here are some things to consider about your marketing budget.
First, only spend what you can. You don’t need to do any more than that. Decide what that amount is going to be and commit to it for six months. I did a marketing roundtable call in December about how to determine your spend. How do you arrive at that number? If it is zero, that’s OK, but then you need to be spending 80% of your time on your marketing. You should be doing workshops, professional presentations, synergy meetings, strategy meetings, lunch and learns, etc. Make certain you are doing the follow-up that’s necessary to meet the expectations you’re creating and the promises you’re making in the industry. Or make sure you are rubbing elbows at networking events and getting in front of prospects and power partners. That should be where the majority of your time is being spent. Some of that time should also go toward building your brand by participating in community events. You can’t bring in business just by hanging your shingle and sitting in your office practicing law. You have to market.
Second, tracking and reporting is crucial. This isn’t negotiable. Your reporting tracks your efforts, and it shows you whether you are reaching goal and what you are risking. It is a necessary part of your commitment to executing and understanding your marketing; it is required information to know the implications of your reporting at a deep level. It helps you build on what’s working and cut what’s not. A very strong discovery process will uncover gaps and weaknesses, it will bring you new ideas, and it will pull you and your team together in the common set of goals required for your marketing.
If you aren’t tracking and reporting and have questions, we do have tools to support you. If you're a Lawyers With Purpose member, just log in to the members website and look under the February retreat; I did a breakout session on the RMS and the reporting. Start there and reach out to me if you have any questions.
So let’s talk about some criteria for what you can cut. These are things that may not be working, and any marketer should look for ways to fix them. It’s just good business sense. You can base your cuts on wanting to cut costs, but if funding isn’t the issue, you should still look at some of the ideas below and consider trimming.
Cut Anything Not Generating Profit
Do you have any marketing spend that simply isn’t generating a profit, despite concerted efforts and a consistent six-month commitment to it? And I specify six months because that’s the length of time it takes to tell if something is working – results typically show up by the six-month mark in your reporting. If you do something different, like stop promoting your workshops or cut down on your RMS, you will see it around six months after you stop. So if you see any piece that is not generating profit for you by then, we can 100% say you should retire that effort.
However, you need to be sure to look at your reporting as a whole: monthly, quarterly and annually. For example, if you got an AP2 from a $100-a-month ad in the local church bulletin, that was worth the monthly fee and axing it doesn’t make sense. But when you’re looking at that item week in and week out without considering the whole picture, it might initially look like something to cut. So make sure you have the whole picture before you cut it.
Walk Away from the Wrong Prospects or Leads
If generating fees outside of estate planning / elder law – assuming this is what you want to focus your practice on – it might be time to step back from such leads, see where they’re coming from and refine your marketing strategy. It’s important to understand your sweet spot or niche and focus on it. Think about referring the work you don’t want to someone else. Build a relationship with that person – a referral relationship. So if you have family law still showing up in your practice, don’t just grab onto it. Find an attorney you feel confident referring to – but have a synergy meeting with them and make sure to build a referral relationship. You refer to them; they refer estate planning and elder law to you!
This isn’t easy, I know. I worked in a small boutique firm that did family law and estate planning. The family law came by default, but we decided we didn’t want to do it anymore. Still, every once in a while that retainer was right in front of us and we would cave to reach goal. But one day we decided no more, so we built structure and standards around referring it out. We built referral relationships with another family law firm and asked for estate planning referrals. We found that we were better able to focus our marketing and leverage our efforts. And when you are THE estate or elder law practice, it’s amazing what happens in the industry. You become the go-to, and you can feel confident saying you are the best at what you do. We were able to focus our marketing and not just talk about the things in general that we did, like “living trusts” and “dissolution of marriage” to include the business planning and asset protection, which compensated for that family law that we dropped. And we ended up getting consistent referrals from that family law attorney.
Also, if you find that your marketing is bringing in endless requests for negotiating your fees, then it’s time to think again about whether these are the prospects you really want and where they are coming from. You are probably targeting the wrong demographic. Refine the marketing message, move it, or axe it altogether.
Why Not to Cut Marketing Budget?
Many times, the firms that don’t cut the marketing budget – they just refine, move, tweak, and throw the dollars someplace else – really reap the success. If you analyze successful companies, the one common theme among many of them is the effectiveness of their marketing and advertising. And sometimes, moving backward helps you eventually move forward. It’s not fun, and it’s not painless.
Marketing is like casting a net, then letting it sit to see if you catch any fish. If you do, you recast the net, maybe even a bigger net next time! But if you don’t, pick up the net and throw it someplace else. If you know something is working, do not cut it – power through it and invest in the spend. Work your wholesale and community outreach to drive some revenue to compensate for the retail that may not initially be delivering an ROI.
After more than 20 years in the industry, I have learned one certainty: Marketing budgets at most law firms are the most unloved of all budgets. When not reaching goal, we huddle around them, trying to determine which expenses are likely to have the biggest impact on growing the top and bottom lines. But it’s always important to make cuts for the right reasons, and the right reasons usually aren’t commercial reasons, they’re marketing reasons.
Our next post will address which marketing strategies are the most cost-effective.
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Roslyn Drotar, Internet Marketing Strategist, Lawyers With Purpose
Transferring assets to children has many high risks that clients aren't familiar with. Most commonly, it can create a gift tax filing requirement that is rarely done and results in a “carryover” tax basis to the beneficiary who receives the gift. Many of these general practitioners fluff it off because they may have reserved a life estate for mom and dad, to preserve or step up in basis on the home. While they may be correct on the step up in basis issue, what they have failed to consider is, what is the impact of conveying the house to four kids is after the death of mom and dad? Imagine trying to sell that house and getting the four kids to agree on the price and to even agree whether it's sold or not. 
