How do I Calculate the Value of a Lead?

With traditional means of advertising, including but not limited to radio, billboards, and television, becoming less effective, it is imperative that lawyers expand their marketing strategies in order to grow their business to its full potential. When an attorney knows how each of their advertising campaigns performed, and why it performed in the manner it did, they will be able to know what mistakes to fix, and therefore make sure such mistakes are not repeated during their next campaign. One of the best marketing tips for lawyers involves calculating the value (or cost) per lead. This in turn will help the lawyer understand whether their techniques for bringing in business are working or not. How do I calculate the value of a lead? This article aims to provide a basic breakdown of such a task.

What is Cost Per Lead?

‘Cost per lead’ or ‘cost per client’ is a specific calculation that can be made to help understand the value of a lead. It is a common metric used and one of many marketing tips for lawyers.  It is important to note that the cost per lead is not exactly equal to the value of a lead. This will be discussed further below. In order to calculate this metric, there are two variables you will need: your firm’s marketing budget & the amount of leads your firm has acquired over a period of time using the budget. 

Cost per lead = marketing budget / # of new leads. 

Therefore, if for example, you’ve spent $1,000.00 on marketing and it acquired you 5 new leads, your cost per lead will equal $200.00. Now, as a partner of your law firm business, you will know that each newly acquired client will need to bring in more than $200.00 in order for such marketing efforts to be profitable.

Other Important Metrics to Help Determine Value

There are numerous other valuable marketing tips for lawyers in regards to analyzing how much value a client brings. One of these metrics is called ‘value per case’, which is calculated by dividing the total gross sales generated by the total number of cases that have been completed within a specific period of time. Another one of these is called return on investment. This is essentially a percentage, calculated by dividing how much money you’ve spent on a specific lead divided by how much money that specific lead has brought into the firm.

It is important to note that these other metrics are there to help aid the cost per lead calculation (above). Altogether, these calculations will determine a certain amount of value per lead. For example, your cost per lead may be $200.00, however, if most leads themselves bring in other leads through referral, then the value per lead will greatly outweigh the cost.  These marketing tips for lawyers are beneficial to both the general business knowledge of the lawyer, as well as the overall growth of the law firm.

Create New Leads without the Hassle

About 49% of all law firms say their best marketing strategy is to purchase leads. 

At Grow My Firm Online, we’re delivering powerful results for our clients by providing high-quality legal leads for lawyers that are ready to convert. Our innovative approach allows us to significantly lower the cost and effort that goes into client acquisition. The best part is that you only pay for the results you get. Contact us today to find out how we can generate arguably the best legal leads for attorneys.

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