After the Click, Pt. 4: How to Measure Cost Per Client
How Much Does Your Firm Spend Per Client?
For law firms, the ultimate goal of any marketing strategy is to get more clients. However, it is crucial to know how much each new case costs to acquire, because a firm that spends more money than it takes in won’t be in business long.
If you find calculating your cost per client (CPC) to be a daunting task, you’re not alone. Many law firms track only an approximation of their CPC. At best, these rough estimates limit how accurately a practice can measure its marketing plans. More commonly, though, they obscure the fact that a firm is actually losing money.
At Client Chat Live, we know that measuring CPC doesn’t take special business savvy, just a resolve to account for your marketing budget. Follow these steps to calculate your cost per client.
One of the most important factors of calculating your CPC is first knowing how much you’re spending in marketing efforts. If you already keep track of a marketing budget, this step will be simple.
However, if you’ve adopted more of a lax approach toward spending in the past, now is the time to go through those old invoices and tabulate how much you’ve actually been spending. This task may seem arduous at first, but once you have established an accounting system, it will be straightforward in the future.
Be sure you total the expenses from all your marketing channels. These might include:
- Pay-Per-Click advertising
- SEO vendors
- Traditional advertising, such as television and radio commercials and newspaper, billboard, and bus advertisements
- Sponsoring community organizations
- Legal directory listings
- Event hosting
- Business-related dinners with fellow attorneys or potential referral sources
As we discussed in Part 3 of this series, you should also track how many clients you get from each referral source, which will help you better understand where your marketing dollars are getting the greatest return on investment.
Use a Cost Per Client Calculator
Once you have a list of your marketing expenses, you can input the data into our Cost Per Client calculator.
With this helpful tool, you can determine not only your average CPC but also the average cost of a potential client and how many PCs it takes for you to get a client.
Compare Case Values
Now that you have calculated your average CPC, you can compare the data with your case values. Hopefully, you’re collecting more in legal fees than you’re spending on client acquisition.
As a business owner or manager, you should know exactly how much it costs to acquire a new case. By consistently using this process, you will find you can make more-informed decisions on where your marketing budget is best being spent, which in turn will help you bring down your CPC and maximize your profit.
We Turn Visitors Into Clients
After the Click, Pt. 1: Optimizing the Intake Process for Law Firms
After the Click, Pt. 2: Determining Who at Your Firm Should Be Talking to Potential Clients
After the Click, Pt. 3: How Law Firms Should Analyze Client Sources