#172: Client Development Return On Investment (Do You Know Yours?)

[00:00:47] Hello. Hello everybody. This is Heather Moulder, host of the Life & Law Podcast. Today we are talking about your client development return on investment. Do you know what yours is? If not, let’s talk about how to start measuring it.

Something that I’ve seen not just in my clients, but within my career, was this inability to really understand and know what business development was working? So people would do all kinds of legal marketing activities via writing, speaking.

[00:01:24] They’d go networking. They’d network at big conferences, they’d network at small groups. They would have their law firms pay for sponsorships of various events.

[00:01:36] And nobody ever knew what the return on the investment was, the return on the monetary investment, but also the return on the time and energy investment that they were making.

[00:01:50] And that is a real shame because it’s really hard to be successful at business development if you’re not paying attention to those things. And what I mean by successful is this.

Your Business Development ROI Isn’t Just About How Much You Bring In

[00:02:04] I really don’t care how much you’re bringing in.

[00:02:07] I mean, I do, but hear me out.

[00:02:11] If you’re spending 15 hours a week doing business development activities, you’re spending way too much time for what you’re bringing in, no matter how much you’re bringing in. You could be bringing in a million dollars on your own this year.

[00:02:28] But how much time and energy are you spending to bring that in? There’s an actual cost associated with that, right?

[00:02:37] And how much money are you in the firm putting towards that development? So it is really important to pay attention to that. You need to know your ROI.

Now, you also need to understand another kind of ROI, which is what’s currently effective when it comes to networking. And how do you measure that? Because let’s be honest, a lot of our lawyer networking, whether it be with potential clients and partnerships, whether it be with people who could refer business, it’s a long game, right? And a lot of our legal marketing is a long game. Some of it’s shorter than others, but a lot of it is a long game.

You don’t go to that event, do a speech, and then necessarily get immediate business, but you plant seeds. Now, I will say if you’re doing it right at the right places about the right topics, you’re more likely to get some really great feedback that starts really great relationships, that does lead to business more quickly.

[00:03:42] But again, oftentimes it doesn’t happen immediately. And so you need to be really aware of all the things you’re doing, the feedback you’re getting.

[00:03:53] And it’s more than just feedback, by the way, the work you’re actually getting out of it or the relationships that then leads to work. So these are the things we are talking about.

You need to be very aware of all that you’re doing. All the time, energy and money you’re spending, and then what you’re getting from that so that you can effectively measure that over time and determine what’s working really well; what’s working okay; and what might not be working at all. It helps to determine what to stop doing, at least for now. What to tweak, maybe, or say, you know what, it’s not enough for now. Let’s maybe revisit this in a year or two.

[00:04:38] And what you really want to double down on.

Applying the 80/20 Rule To Your Business Development Efforts

So I don’t know if you’ve heard, you probably have because you’re smart, but the 80 / 20 rule… There’s different ways to look at this rule and different uses for it, but generally it says you get 80% of your results on 20% of your effort.

So measurement of your biz dev ROI is really about figuring out, well, what’s that 20% that’s working really well and increasing that so that you increase what you get back from it. Okay, so that’s kind of, in a general nutshell, the kinds of things you’re going to be looking at and measuring. Let’s go a little more specifically now into how to start looking at this and how to start measuring it.

How To Properly Measure Your Business Development Return On Investment

Categorize Where Your Money, Time & Energy Go

[00:05:23] So obviously, you want to pay attention to and track money going out the door, and you don’t want to do it in just one big blob. This is where I think some people mess up, is they kind of have a general sense of, okay, I can go track all my expenses and see where it’s, you know, that it’s going out the door, great. But you need to break it down from there.

What did it go towards, was it something more general where you’re sponsoring something like a conference to get your name out there? Was it a sponsorship on behalf of a client that you’re growing and is promised new business, kind of as a reciprocity type of a thing?

[00:06:07] Was it money out the door to, for a team to go to a big conference, maybe speak, maybe not? What came out of that specific conference. Right.

[00:06:20] And then what was the ripple effect of that as well? So you’ve got to start really paying attention to where is the money being spent, how much is it being spent so that you can then start to see. Okay, let’s gauge what we’re doing and what makes more sense to continue and what makes more sense to stop.

[00:06:38] Now, you also want to look at time.

[00:06:42] How much time are you spending?

[00:06:45] Right? So let’s say you speak and you speak all over. Well, how much time are you spending speaking and where?

[00:06:52] And perhaps you are. So I have a client who’s a privacy expert, and she goes and speaks all over the place. So for her, she would break it down more based on industry, right. Because they have different industries that need them at their firm that they really target and focus.

So what is the monetary and then the time spend per industry on her speaking? And that would be the travel time. That would be the time there, but that would also be preparation time, preparing for the speaking. So what does that look like? And then what does the money look like? And then what are the efforts? What are the connections that were made at each place within each industry?

[00:07:35] And don’t forget to look at the ripple effect of that. So you go somewhere, you meet somebody you want to look at. Okay, I met somebody. Well, what if they referred me to someone else or introduced me to someone else that then led to something else, right.

[00:07:48] So you’ve got to pay attention to these things, which means you need to be tracking not just money, not just time spent, but the other side of it, too. Who you’re meeting, where you’ve met them, who they’ve introduced you to. You’ve got to have a good tracking system.

By the way, this is an area we talked about business systems a couple of weeks ago. This is yet another great area to implement them. Once you get really into business development, there are some systems you can put into place that would really help you. And if you need help with that, this is something that I do help my clients with. So reach out to me.

By the way, my mastermind for business growth – ELEVATE – is about to close. It’s the end of the month. It closes on the last day of this month. I will stop the application process. You can sign up to actually be interviewed in November, by the way, but the actual last day to sign up will probably be at the time of this recording. I anticipate it will be October 31st. So, FYI, if you’d like help with this, look there, that’s one way to do it. So I’ll put a link to that in the show notes.

But back to this. You need to be tracking, you need to be paying attention to all of these things, and you can have really simple systems in place to help you to do that.

[00:09:10] So you’re going to look at time and money that go out the door that are expended, and then you want to look at also, what did you do when it comes to legal marketing?

Now, maybe it was all speaking, like I said earlier, maybe you also did some LinkedIn writing. So how much time do you spend on that? Right. So what’s the time effort on that? And that’s a different category, by the way. So the type of marketing that you’re doing, the networking that you’re doing, they should be in different categories so that you can see, okay, what’s going on here?

[00:09:46] I’m speaking, I’m doing a little bit of LinkedIn writing, and I’m networking. Okay, those are three categories. So how much time and money are spent on each, and what are the returns of each?

How To Track (& Measure) Your Networking ROI

Now, when it comes to networking, your returns, again, may not be immediate, but usually you start to get a sense of whether or not it’s a good connection. That is, somebody who’s relevant to the business that you do either through, they can send you business or they’re within a company or somewhere that can send you business and they’re willing, or you think they’re willing to at some point do so. Or they could be a referral source, somebody who can refer you business or who is willing to introduce you to those types of people who can refer business or send you business.

So you should have a pretty good understanding within a couple of months of where somebody stands, and you should be continually rating them.

I have a system that I’ve talked about before and that I actually have in my client development blueprint. And they tell us never to have two calls to action in anything, but I’m gonna do it today because this will help you. The CDB talks about how to rate people when it comes to your networking and the connections and who to follow up with more proactively and more often versus who to kind of be a more cool follow up that might have more long term potential, but not immediate potential.

And it’s really based off of the relevancy to the business that you have to your actual practice, and then also how, you know, willing and or able they are to actually send you something that could be business or send you referrals that could lead to business, that type of a thing. So you want to be very honest about, okay, what is this?

And let me just tell you, networking connections move up and down. Oftentimes we meet people who we think are going to be amazing connections that three, four months in, we realize, or six months in. No, they’re not. Or they could be, but this is a much longer haul. And then we also sometimes meet people that we make an initial gut reaction of, yeah, I don’t know, but for some reason we think, I’ll keep up with them a little bit. And then a couple months later, oh my God, they end up being the best connection ever for future business or current business. Right.

So this is something you want to keep track of and you want to reevaluate. I like to reevaluate it quarterly and then annually on a much bigger picture as you’re looking forward to the next year, but quarterly to kind of decide, okay, what new information do I have? What’s going to change around who I’m trying to follow up with more often, less often, etcetera.

[00:12:33] So that’s kind of how to look at your networking ROI.

Tracking Social Media ROI

So you look at these different categories, right? And so when it comes to social media, let’s take LinkedIn, because most of my clients, if they use a social media avenue at all, then it’s LinkedIn. Like me, I’m on LinkedIn, too. It very much depends on the goal. Okay, what is the goal for being there? Oftentimes it’s really about branding and just getting seen.

And so you might measure that by engagement and who needs to be engagement by the right people, right? And engagement is a tricky thing. So the way those, the way the social media works is not everybody sees everything you put out there. And many of the people who see it, see it, pay attention to it, might even find it interesting or helpful, and they won’t comment, and they won’t even like it. So you don’t necessarily know unless they actually engage, but they can also engage in another way.

So something that I have found to be true for me, and it’s definitely true for many of my clients, is when you see people in person, they’ll say, oh, my God, I saw your post last week on so pay attention to those things.

[00:13:43] What’s getting noticed and why is it getting noticed? That’s actually important because it again, depends on your goal for being there. You want to ensure that you’re meeting that goal. So if you’re getting comments back from people about how interesting it is but in the wrong way, then that’s telling you something. That’s telling you that your return on investment isn’t there in respect of the goal itself. So again, your goal, your intent matters when it comes to how to measure these things.

The next thing is to look at actual growth.

[00:14:19] So again, you look at time invested, you look at money invested. You also look at each individual kind of avenue or strategy that you utilized and you break them down. You look at your networking and you kind of see the ripple effect and what’s going on and how beneficial it either has been in getting you new business or leading to new potential leads that could that kind of a thing.

Then you also look at the obvious thing, right?

• How many new clients have come in?
• Where have they come from?
• Why did this work come in?

Make sure you’re getting that information on intake, okay? And FYI, write it down somewhere. Because even if it seems obvious at the time, it is really easy to forget later on down the line when you’ve gotten really busy. So track new clients. Track new matters from clients as to why right.

[00:15:13] Business growth from current clients, them starting to send you even more or something new, a new area of expertise that you have that they haven’t been sending to you before. All of that is growth. So you need to get real clear on why, what made them do this? Was it just work? Was it a conversation I had? What was that conversation? How did that go? How could I leverage that?

These are the things you want to pay attention to, by the way. How could I leverage that in additional conversations with current clients and with potential new clients when networking? Right. How could I leverage that into my speaking or writing? What did I learn from that that I need to write about or speak about? So these are the things that you need to pay attention to. So you’ve got to dig into the numbers then.

How many clients were expanded? How many new clients did you bring in? Where did you get this from? Why?

Okay, final note, this is about formal pitches, those pitches, those beauty contests that we lawyers really don’t love going on because it seems like we do this big dog and pony show. There’s a lot that goes into it, and, you know, we don’t always get that work and even when we do, it feels like such an intensive situation and a lot of work, right?

[00:16:29] So you do want to pay attention to those as well. How many in the last you know, how many have you gone on? How did you fare?

[00:16:38] I would say try to get feedback for the all of them. The ones you get and the ones you didn’t. Why did you get it? What was it that sealed the deal? Why not like to improve our process? What did you find missing? You can go ask people those questions. Most are actually very happy to tell you because they want to help and they’re going to be honest with you when you ask in the right way. So go back and find out why, so that you can figure out your ROI on those and increase it.

Okay, so if you are ready to reimagine business development so that you can make the ask in a natural, service based way, so that you can feel confident in your marketing activities, even enjoy them, so that you can have a simple, repeatable plan of action that is proven to produce real results, that is what ELEVATE was made for.

ELEVATE is a limited availability mastermind tailored to you and your law practice. You get expert guidance from me, customized solutions that are customized to your practice, your goals, your strengths, your personality, peer support from fellow lawyers on a very similar journey. If that sounds like something you would like, it is your last chance. So please check it out. I will put a link to ELEVATE in the show notes so you can apply.

That’s it for this week. We will be back next week. Bye for now.