Believe it or not, most referrals don’t come from clients
by Elizabeth Harr, partner, Hinge
If you’re like most firms, attracting and developing new business is a top priority. One of the best ways to do this is through referrals. Referral marketing is so critical to businesses that in a recent Hinge Research Institute study on firms’ marketing priorities, 72 percent of respondents cited generating more referrals as their top marketing initiative for 2015.
You might think your referral strategy doesn’t have much to do with your B2B professional services firm’s brand. You may think that most referrals come from current clients who appreciate your work and recommend you to others. In reality, that’s not how it usually works.
According to Hinge’s research on referrals, 82 percent of firms receive referrals from people who aren’t clients.
So what’s driving referrals if it isn’t your clients?
It’s simple. Your brand.
How your brand influences referrals
Of the three major types of referrals — experience, reputation or expertise — only experience-based referrals rely on direct interaction with your firm. The rest of referrals come from avenues that depend on your brand to do the selling.
According to Hinge’s research, the majority of referrals come from a firm’s general reputation and expertise. Since your firm’s brand is its reputation and visibility within your target market, most referrals are linked directly to the strength of your brand.
So where exactly do these reputation-based and expertise-based referrals come from if they’re not coming from your clients or others who know you? Let’s take a look.
These types of referrals come from individuals or organizations that have not worked with your firm directly, but know you by reputation. They hear about your firm through friends or colleagues, but almost as many will simply know you have a good reputation as Figure 1 shows.
Figure 1. Source of Reputation-based Referrals
And how has this reputation been developed?
Through brand experience — every customer interaction, your website, social media posts, online reviews and every published word your firm releases.
So when you’re thinking about how to grow referrals, it’s important to also think about how to grow your brand’s reputation in your target market.
These types of referrals happen when your brand is positioned as the expert in its field. There are several ways that your brand can successfully develop its position as an expert. However, the most common sources for expertise-based referrals, according to our research, is hearing an expert speak, reading blog posts or articles by the brand or its visible experts, and interacting with the brand on social media as shown in Figure 2.
Figure 2. Sources of Expertise-based Referrals
To grow expertise-based referrals, it’s vital that your brand and those associated with your brand are visibly sharing their expertise through a variety of mediums. So if you’re not already promoting your expertise through multiple channels, consider how you can add these types of efforts to both your brand building and referral growth strategies.
How referrals can fall flat
Getting a referral is only half the battle. Our research shows that over half of buyers — 52 percent — report that they rule out firms without talking to them. This means that beyond building your brand to attract referrals, you also need to look for proactive strategies that will keep referrals engaged throughout the buying journey.
How can you best do this?
Hinge’s research looked at how buyers initially engage with firms and what types of issues make them rule out a firm before they speak with it. Refer to Figure 3 for the results.
Figure 3. How Buyers Check out Professional Services Providers
The first place buyers go to get more information is a firm’s website. Online searches (such as a Google search), asking friends or colleagues if they’ve heard of the person or firm and social media are all places buyers go to get more information before contacting the firm. And as Figure 4 shows, it’s through these venues that they will either continue to engage with your brand or rule you out as a potential service provider.
Figure 4. Why Buyers Rule out Referrals
There are a lot of reasons buyers may rule out a firm, but the top reasons all revolve around its messaging. If its messaging isn’t clear about what it does, what benefits it offers clients and how it can help them, the firm won’t get buyers to take the next step and contact it — they’ll move on.
Along these same lines, it’s crucially important that your messaging and your brand presentation are relayed clearly and professionally on your website — the first place most buyers go to learn more about you. If the website is unimpressive, doesn’t convey the right culture and doesn’t provide a clear message that focuses on how a firm can help potential buyers, it’s likely it’ll lose referrals right then and there.
How to get new business from referrals
To cultivate successful referrals that result in new business, make sure that you’re focused on the right things. Build your brand reputation at every opportunity in a professional manner with clear, prospect-focused messaging that lets potential buyers know how you can help them. Then, demonstrate your expertise through educational and relevant content that helps your target audience improve their own business.
Also, create more opportunities for your firm’s experts to share their expertise and build their networks. And, make your website a priority. Properly designed to showcase your prospect-focused messaging and domain expertise, it can, and should be, one of your top-performing business development assets.
To learn more about effective referral marketing, download a free copy of the full research report, Referral Marketing for Professional Services Firms.
About the Author
Elizabeth Harr is a partner at Hinge, a marketing and branding firm for professional services. Elizabeth is an accomplished entrepreneur and experienced executive with a background in strategic planning, brand building and communications. She is the coauthor of “The Visible Expert,” “Inside the Buyer’s Brain” and “How Buyers Buy: Technology Services Edition” and “Online Marketing for Professional Services: Technology Services Edition.”