4 minsMost lawyers are doing marketing that builds zero long-term value for their practice. In fact, they’d be better off doing no marketing at all than flushing money down the toilet.
The big problem with pay-per-lead, Yelp advertising, pay-per-click search advertising and the like, is that they’re all “one and done.” Just like the ultra-soft Charmin TP is flushed after it serves its purpose, the dollars you spend on these marketing tactics don’t do anything for you after the marketing vultures suck the money out of your wallet.
Appreciation vs. Depreciation
You know about appreciation and depreciation in the context of investments. It’s not rocket science. And marketing's no different.
When your marketing dollar brings not just one client, but a relationship that can spawn more business (whether or not you land the client), you have a marketing dollar that appreciates. The smart thing to do for your firm is to make sure every dollar brings in as many clients as possible.
On the other hand, when that marketing dollar is spent on “one and done,” that spend hits a brick wall. You spent the money. And if you didn't get the client then and there, well, tough cookies.
Suppose you do pay-per-lead, you get one lead, and you don’t close that lead.
Tag the toe and shut the door. That investment of money and time is dead.
Marketing That Depreciates
If you’re doing pay-per-lead, pay-per-click, SEO or directory advertising, your costs goes up as volume goes up.
You can get more leads if you want to cough up more cash, but they’re still “one and done.” Your marketing budget explodes, and you’re still not getting more than one shot to close each lead.
I talked with an attorney just the other week who it seems was running his practice for the benefit of the pay per lead company. He was running nearly half a million dollars in billings ... but after paying for overhead and paying the criminal selling him expensive but crummy leads, was taking home around $60K. Deplorable. (Yes, we hooked him up with a referral system. Happy camper, now).
Most attorneys figure if they cover their costs and turn a profit from that one shot, then it was a wise investment. Well, sort of. Maybe.
The problem is, you’ve created zero value in your law firm. You’ve invested that marketing dollar in a single transaction. And when you stop paying, guess what?
No more clients.
Why? Because you don’t control the marketing channel. Do you think the people who sold you the pay-per-lead program, directory listing - whatever - will keep sending you leads if you don’t keep sending them dollars?
Attorneys seem to think they must invest in SEO, but there’s one problem – it’s not an investment.
The SEO company can claim they'll get you a certain search ranking, but they can’t promise results. (If they do, they're lying. Run, don't walk.)
And even if you get results, all it takes is a Panda, Penguin, Hummingbird or some other animal from Google’s wild kingdom of nerds to screw everything up.
All of a sudden, the best practices you’ve been following cause you to get slapped. Google changes their rules and you have to restart from scratch and spend more money. No notice. No do-overs. Money gone, start again.
Why Referral Marketing Is Different
With referral marketing, your investment of money of time creates a system capable of constantly expanding. Every contact leads you to new contacts.
That’s appreciation.
It doesn't matter if you got the client today. You've got the relationship. And guess what? A relationship is worth more than a client today. It's worth many, many clients in the future.
Best of all, if you’ve made technology your friend, the costs are barely incremental.
When you come in contact with someone, focus on getting more introductions (use a system every time, I'll talk about that in a sec). If you get incremental business from that client or introductions to other leads, you’ll be making money from that relationship forever.
Now you have long-term value that snowballs. And it can’t be taken away from you because you own and control the marketing channel. It's yours. Nobody between you and a better practice. No vendor, no Google, nobody.
But that brings us to another important misconception.
Most lawyers don’t realize that referral marketing IS a marketing channel. They don’t see it that way because they think referrals are accidental or dumb luck.
It’s not like Google, where they can go to a PPC vendor and buy clicks. That we all get. Spend a dollar, get a click.
Lawyers don’t realize that a dollar can be spent just as easily on a referral marketing program and bring far better results.
Why? Most attorneys mistakenly think referral marketing is manual marketing – shaking hands and kissing babies.
That’s not the case.
Referral marketing, when done right, is a perfect marriage of personality and automation.
It’s also a fraction of the cost of “one and done” marketing.
Most lawyers just don’t know how to execute a referral marketing program because they’ve never built a referral network in a scalable way. A way that appreciates. Builds you a real, stable, lucrative business.
How do I know? That's what I do. That’s where Practice Alchemy helps. If you're not sure where to begin, just ask us.
