Referral Marketing Is No Longer What You Think It Is
In a recent survey of professional services firms’ top priorities and initiatives in 2015, the Hinge Research Institute found that referral marketing is the top marketing initiative this year. However, referral marketing is no longer what it used to be.
In a new guide, Rethinking Referral Marketing, Hinge explores the reasons for the shift, and how you can use your industry expertise to generate more referrals than ever before. Here are some interesting findings from the publication.
Most referrals come from someone you’ve never worked with
When we think of referrals, most of us think of clients or known influencers who have direct familiarity with our company’s work. Hinge calls these experience-based referrals, and they’re very important, but they’re not the whole story.
In fact, 81.5% of firms receive referrals from people they have not worked with directly. These referrals based on experiences of your firm other than a vendor or client relationship. Specifically, they draw on your reputation and what referrers understand about your areas of expertise. These referrals are built on your brand.
According to Hinge’s research on 523 professional services firms, the brand-based referrals break down like this:
- 46.4% of brand-based referrals are driven by general reputation
- 18.1% of brand-based referrals are driven by expertise
- 5.5% come from people who have met you but don’t have much detailed information about what you actually do
Sharing your expert knowledge is essential
The expertise-based referrals have several sources:
- 30.0% I’ve heard them speak
- 20.0% I read blog posts or articles they’ve written
- 17.0% I’ve interacted with them on social media
- 15.0% I read a book they wrote
- 8.0% They had an impressive website
- 5.0% They came up in online searches
- 5.0% They had positive online reviews
The common theme is sharing your expert knowledge.
You can be ruled out based on your online presence
A narrow definition of referral marketing is not the only problem that companies have. Over half of buyers (51.6%) report that they have ruled out firms without talking to them. Those referrals have gone to waste.
According to Hinge’s research, most buyers check out providers online, with a firm’s website being by far the most common source of information (cited by 80% of respondents). The research also mentions the reasons for ruling out a referral. Here are the top five:
- I couldn’t understand how they could help me or my firm (43.6%)
- The material seemed more focused on selling than helping my firm (32.9%)
- They didn’t seem to be a good cultural fit with my firm (30.9%)
- Their website was unimpressive (29.6%)
- They have a poor reputation (27.6%)
You can fix your referral marketing strategy
On average, 69% of professional services buyers are willing to provide referrals for their service providers. If you are not meeting or exceeding this percentage, this is a strong sign that you are leaving business on the table.
Rethinking Referral Marketing explores strategies for improving your referral marketing strategy and results. Download this very interesting guide at http://www.hingemarketing.com/library/article/rethinking-referral-marketing-guide.
If you like my blog and podcast, subscribe to my monthly newsletter!