Oftentimes attorneys and law firms believe that because they have already put in a lot of money into one marketing venue, they should continue to so invest in it even if it isn’t working. An economist would label this situation as the “Sunk Cost Fallacy”. A sunk cost by its very definition is a cost that has already been incurred and cannot be recovered. Law firms often fall into the sunk cost fallacy when they try to build a website and hire a search engine optimization (SEO) company to get the website to rank highly on search engines.
Cost of Websites and SEO
It will cost at least a few thousand dollars to build a quality website for your law firm. Depending on the how competitive the areas of law you are trying to rank for, it could take anywhere from a few months to over a year to get your website to rank highly. The most competitive areas of law, for getting a website to rank, according to Google are:
- Personal Injury
The legal industry is the 4th most competitive industry for digital advertising, preceded by the insurance, loans, and mortgage industries. Given the steep competition, it is not unreasonable to expect that it will take about a year for your site to rank highly on Google searches. If you hire an internal SEO specialist, it will cost at least $30,000 per year. A third-party SEO company could charge anywhere from a few thousand dollars to over $10,000 per year to optimize your site.
When the Sunk Cost Fallacy Comes into Play
First, there is a chance that your website is getting a lot of traffic despite investing tens of thousands of dollars into SEO. You might be tempted to invest more money and try to make it work since you have already invested so much.
Second, Google constantly upgrades their ranking algorithm and there is always a chance one of these upgrades could negatively impact your site. Similar to the first scenario, you might be tempted to dump even more money into your SEO efforts to recover your site’s ranking.
You should not make a marketing decision based on the amount of money you have invested in the past. Instead, evaluate your marketing decisions based on future cost and potential for return on your investment. Analyzing your SEO costs by these measures, you could find that pursuing your own SEO (internally or hiring an SEO company) might be the best solution; whatever the decision, it should not be based solely on the fact that you have already invested a lot.
How to Avoid the Sunk Cost Fallacy
Law firms fall for the sunk cost fallacy when the marketing medium they use requires a lot of upfront cost. Hiring an SEO and investing in print or TV ads are a few examples of marketing media that generally require a lot of upfront investment.
Buying leads from a third party is a medium that generally requires very little upfront cost as you only pay for the leads you get. At eGenerationMarketing, we generate leads for attorneys and advocates who practice Social Security disability, personal injury, workers compensation, or employment law. If you are interested in learning more about our services, gives us a call at 617-800-0089.