Lately, we have encountered some firms that are in a marketing death spiral – a state we all want to avoid.
A marketing death spiral starts its fatal course like this: A firm first decides that it is going to cut back on its marketing budget, most often because the company has experienced a dip in revenues.
On one hand, they are being smart about managing expenses and revenues before it becomes an unmanageable deficit — but on the other hand, they are being unwise by cutting their marketing budget at a time when they need to bring in more business.
Once a firm’s marketing budget is reduced, it draws fewer results from its marketing. Therefore, they cut their marketing budget further, deciding that spending money on marketing isn’t paying off and so they will suffer no ill effects.
You can predict the end of the story. The company keeps cutting the budget, results continue to decline — they have entered the vortex. By the time the firm’s leaders recognize the deep hole they’ve dug, they are far behind their competitors and require an even bigger marketing investment to catch up. What was it Newton said about objects in motion? (They stay in motion. In this case, downward.)
You might think this sounds self-serving. Yes, as a marketing firm, we do not want clients to cut their budgets. However, the reality of today’s law firm business development is that it takes an ever-increasing investment simply to remain competitive — let alone pull ahead.
The people who have led their firms into the death spiral are smart, surrounded by good lawyers making what appear to be common sense-based decisions.
Our recommendation is this: Step back before cutting the marketing budget and consider the many variables, calculating the best way to excel in both the online and offline worlds. This will help you prevent entry into the business death spiral, and instead will ensure an enduring and successful enterprise.