WHAT IS A LEAD WORTH TO YOU?

By Chris Homer

How do you measure the effectiveness of your online strategy? Obviously, the answer is  lead flow. A rock solid, online strategy leads to increased phone calls month after month.

But how many of these phone calls are quality leads? How many of those leads turn into clients? How much is your average client worth to you? You should be asking yourself all of these questions before jumping into a new online strategy, especially when that strategy involves paid ads.

Before we jump into what a new lead is worth, let’s start by focusing on the leads that are already on your site. Last month, we wrote about the importance of utilizing programs for Live Chat and text messaging to engage potential leads and clients. These services allow you to capture leads at a small cost. There is a one-time setup fee, and after that leads usually cost less than $50 each.

You can accept or reject these leads based on the information provided from the chat transcript. If you see a promising lead, you can accept their request and only then will you be charged.

You may be wondering why paying for leads makes sense when they could simply pick up a phone and call your office or fill out the form on your website. I don’t know about you, but I can assure you that there are very few people I would pick up the phone and call at 3:00 AM on a weeknight.

A live chat service is a 24/7/365 service that allows users to interact with a live person at any time. According to NGage, “40 percent of contacts occur outside of standard business hours.” How many leads is your law firm missing simply because potential  clients don’t think you are available? A small fee is well worth you capturing that lead instead of the law firm down the street.

Avvo

It’s been a couple of years since Avvo has surged into the legal market. It offers a space for lawyers to highlight their skills and knowledge, and assist people in finding answers to their legal questions. It’s also a great place to advertise. Most lawyers today have an Avvo profile that they have claimed and properly optimized. However, even if you claim your personal profile there could still be other attorneys advertising right on it. For that reason, we always recommend going with the Avvo Pro, as it will remove other attorneys from your profile.

If you are looking to secure more leads from Avvo, heavily consider advertising on their website.

We receive the same question all of the time regarding advertising dollars. “How do you know if advertising with Avvo is the right way to spend money?” The answer is right in front of you. First, do some Google searches for the keywords you want to generate business from Google. You will most likely find that there is a result for Avvo linking to a  practice area page on their site. These pages are geo-specific and contain a list of all relevant attorneys nearby. You will notice a couple of the lawyers at the top of the  page are ‘Sponsored Listings.’ There is also a display ad on the side of the page that takes up a lot of prime real estate. These are the two options when it comes to advertising on Avvo. If you see Avvo is ranking well for the search terms you want to target, look into buying ads on those keywords.

Before investing in ad space, you must make sure your Avvo profile is complete, highly rated, and regularly updated. There is no point in buying an ad on Avvo if you have an Avvo rating of 6.0/10. Other attorneys who are advertising may have a 10/10 rating. Make sure you take the necessary steps to increase your Avvo score before advertising.

Once your profile is optimized, you can start evaluating how these ads fit into your budget. The average cost of Avvo advertising is between $100 – $300 a month for sponsored listings. These sponsored listings are able to place you above everyone else on the page and lead to a much higher CTR.

The biggest question to ask yourself is, “How many leads do I need to generate from these ads to make the investment worthwhile?”

AdWords

When we talk about ROI on leads, everyone immediately thinks of Google Ads. Why? Simply put, they are the big kid on the block. Google Ads are not going anywhere, and when done correctly can dramatically increase your lead flow.

The problem is that bad marketers and attorneys who don’t know what they are doing are driving up the cost for everyone else. When someone overspends on ads, it drives up all other law firm’s costs. This is not going to stop and the price will continue to rise. It is also a perfect example as to why properly targeting ads is so crucial to their success.

Despite this, if you understand your lead flow and revenue per case, you can then set a proper budget and run a successful, cost-effective campaign.

Here is how it works. The name of the game in AdWords is CPA (cost-per-acquisition), or how much you are spending per lead. Every click has a cost associated with it, and  based on how well your campaign is performing, that cost can either increase or decrease. The goal of your campaign is to lower your cost per click (CPC) while increasing the number of leads you generate from AdWords. In order to lower your CPC, you must maintain a high-quality score across your campaigns. Quality score is determined by the expected click-through rate vs. the actual click-through rate. If Google expects your ad to have a CTR of 1.6% and your ad is receiving a CTR of 2.4%, you will exceed their expectation and therefore have a high-quality score. The high-quality score will then reduce your CPC and hopefully decrease your CPA.

AdWords is a great way to get an immediate return on your investments if done properly. Usually, after 3 to 4 months of fine-tuning your AdWords campaign, your cost will begin to decrease.

Before deciding on an advertising strategy, I ask everyone to answer one final question. What is one lead worth for your law firm? If you can’t answer that off the top of your head, then we need to figure out a rough estimate of what a lead is worth. Simply take the total revenue of the law firm last year and divide that by the number of clients you had. This is a really rough estimate of what one client is worth to you.

How many leads does it take to secure a client? Does it take 15 leads? 10? 5? Whatever that number is you can divide the revenue generated per client by the number of leads it takes to acquire one client.

Why is this important? If you know that 1-5 leads turn into a client, you can then calculate how many new leads you will need each month to meet your quarterly and annual goals. It helps measure ROI and dictate where to spend your marketing budget. If Avvo ads are within your price range, then buy some Avvo ads and let them generate X amount of leads at a margin that is acceptable for your law firm. All  of this stems from understanding your ROI on marketing. Once you know that, you can run marketing campaigns that will help immensely in the growth of your law firm.

So, what is a lead worth to you?