New leads are the driving force behind a law firm’s success. While other professional services can count on repeat business to drive growth, law firm clients more often utilize services just once or infrequently. Not surprising, each new lead is especially valuable to firms, and even one lost lead means the loss of potential revenue and business growth.
While lead losses can occur for many reasons, a poor intake experience can quickly cause leads to move on and search for other firms. Issues like lack of responsiveness, unqualified intake teams, poor or no follow-up strategy and other problems can cause leads to abandon your firm.
So, how can you calculate potential lost revenue due to these lead issues? It’s fairly simple to do so, and when you do, you will certainly realize how important it is to convert every possible lead into a client.
Lead Loss Benchmark
Overall, your firm should aim to capture 99% of all leads, including calls, web forms, chats or text leads, and move them through the client intake process. That means that you should set a 1% lead loss benchmark. However, the law firm industry as a whole has a lead loss rate of over 8%. Changing your intake process to achieve the 1% benchmark isn’t easy, but the results are well worth it. Consider a full-scale retooling of your program, if you’re not reaching that goal.
How to Calculate Potential Lost Revenue
So, how do you calculate revenue loss due to lost leads? Consider the following scenario:
Your recent marketing campaign generated 100 quality leads, and your average fee per client is $10,000. If you have an 8% lead loss rate (the industry standard), you are capturing 92 leads with a potential revenue of $920,000. However, by putting people, systems and tools in place to improve that rate to 1%, you would capture 99 leads - rather than just 92 - and your potential revenue would be $990,000.
By losing just eight leads, you are missing out on $70,000 in potential revenue from one campaign. Multiply this number by however many marketing campaigns you run per year, and it could turn into a serious loss for your firm and keep you from achieving your growth goals.
Not only do you have the lost revenue, but there is a loss of marketing dollars and lower return on investment (ROI) of your marketing spend. It’s actually quite easy to calculate your ROI - simply subtract total spend from total revenue and then divide that total by your total spend again. That will be your ROI %. Continuing with the example above, your potential revenue is lower yet your marketing spend remains the same; therefore, your ROI goes down with every lead you lose.
Lost leads can be detrimental to law firms, especially when it comes to lost revenue and low ROI of your marketing dollar. Therefore, it is essential for law firms to optimize their intake process. This will increase conversion rate and maximize potential revenue. If you don’t think you can accomplish this on your own, consider working with a legal services call center like Alert Communications that has trained intake specialists that work 24/7/365 to capture 99% of your incoming leads.