It is no easy task to come up with a marketing budget. You don’t get to concretely see the return on investment so it is hard to estimate how much is just enough. If you spend too little, you might not make any recognizable results. Invest too much and you can be losing money instead of making any. So, the question is, how do you know what’s the right marketing law firm budget for you?
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How Much to Spend on Marketing in Law Firm?
There is no actual way to know how much to spend on your law firm marketing. At the end of the day, it depends on how much your gross revenue is and your current reputation. The more money you make, the more capable you are of investing a bigger amount. Also, the higher your current reputation, the lesser investment you need to allot on brand awareness.
However, what is too low or too high? When do you say you are not investing enough or you are spending too much?
In a survey that was conducted by Legal Marketing Association and Bloomberg Law, the average law firm spends 6.7% of gross revenue on marketing. However, you don’t necessarily have to strictly stick to that number. As a matter of fact, the amount that each firm spends spreads from a range of 2% to 12%.
As was earlier stated, your reputation and revenue factors in on your budget. Knowing what is the current state of your law firm will help you determine what your position is on that budget range.
If you aren’t generating too much revenue, then you might need to be on the upper limit of 12%. Otherwise, you might not be having a significant amount to invest on your marketing. On the other hand, if you are bringing in heaps of revenue, 2% can already mean a lot of money.
While it may be a considerable gap, you at least now know where to begin your budget estimation. As long as you stick within this criterion, you can safely assume that you aren’t going overbudget. At least, you are sure that you are not losing more many than you make.
How Much Should a Small Law Firm Spend on Online Marketing?
Knowing your marketing budget is not enough. You also need to understand how much goes to where. There are marketing approaches that are more effective which warrants more investment. Then, there are ones that are less desired but still matter greatly in your marketing strategies.
Considering how everything today has made a shift on to the internet, you are likely looking at online marketing. However, while it may be logical to invest a substantial amount on it, how much is too much? Because at the end of the day, this is still only one of a few other marketing strategies you should undertake.
Small law firms usually are the ones to take the leap of faith with online marketing. Not that it is a gamble, but because it is so effective. As a result, it is easy to get carried away and overspend on this single approach.
If you are still starting out and need to establish your online presence, you are looking at a huge percent of your law firm budget going to online marketing. According to a survey, law firms practice between 76% to 100%. Going for the upper limit is risky, but if your situation permits, it could be the right approach.
If you are in the middle of your online marketing strategies, the general consensus is 51% to 75%. It is still a hefty part of your budget, but what else do you have to spend on?
While you can do something else such as creating print ads and investing in television and radio ads among others, online marketing delivers the highest return on investment. As a result, it warrants the highest percentage of your marketing budget.
How to Create Your Law Firm Budget for Marketing
When creating your marketing budget, there are a lot of things to consider. Otherwise, you might make one that is not the best for your situation. Since you are running on a limited budget, you want that every penny spent will reap the most results.
With so much pressure in making the right budget, you might not know where to begin. Nobody really knows how to make one at the start. It is usually a learned skill after repeated practice and observation. Though, you don’t necessarily need to depend on trial-and-error as long as you use the guideline below.
1. Know How Much You Charge
Remember that one of the factors for your marketing budget is your revenue. So, it is important to know how much you charge for your services. Once you have gotten an estimate of potential revenue, it is fairly easy to proceed to the next steps.
2. Understand What You Need
As a business, there are going to be things you need such as awareness, reputation, and the likes. In order to know what marketing campaigns to undertake, you should understand what are your needs. You cannot come up with a plan if you don’t know what you should be spending on.
3. Create a Campaign Draft for Your Law Firm Budget
You now have a budget and where you should be spending it on. So, it is time to come up with your marketing campaigns and strategies. Estimate a budget allotment on each to equally divide your entire budget on everything you need.
If you don’t allocate your budget beforehand, you can potentially find yourself having not enough for your other strategies. It is fairly easy to overspend when you don’t have a general picture of your entire potential expenses.
4. Refine and Adjust
Your draft is not going to be your final marketing plan. For sure, you are not going to be able to follow it. Either you later realize that you need more money for one or you re-evaluate your priorities. Regardless, it is okay to change your plans at any point. Make sure to have adjustments that will best fit your needs and situation.
Your Law Firm Budget is Crucial
If you don’t make a marketing budget, what you end up doing is freestyling everything. You pull out money when you see fit and hold back budget when there isn’t any. In the end, you make a marketing campaign that is not effective and expensive.
Stop yourself from throwing money out. To do that, you need to know your budget. With that information at hand, you can make informed decisions on allocation and how to effectively spend it for the best results.
If you think that is something you are not capable of doing, what you need is a little help. You can get that from the best digital marketing agency. So, contact us today for a free strategy consultation.
