Not too many years ago, marketing was a somewhat mysterious process. It was hard—if not impossible—to connect the tactics you employed to the revenue they may or may not have produced. You couldn’t see the forest through all the fog.

Today, marketing is much more scientific. An amazing number of marketing activities can now be measured. A/B and multivariate testing improve results over time. Data is everywhere. More and more, firms are taking steps to understand buyer behavior, something we at Hinge have been passionate about for more than a decade.

But even with these advances, marketing today isn’t always a straightforward equation. The marketplace is constantly in motion, so what worked two years ago might be a dud this year. As generations Y and Z play greater roles in the selection of professional services providers, the process buyers use to find, vet and choose firms is also in flux. And every year, new technologies are redefining the way learning, buying and marketing work.

The Revenue Generation Equation Has Changed

How does a firm adapt? To answer that question, we first need to understand the traditional approach many firms still rely on to generate revenue.

Here’s how professional services firms have traditionally generated revenue:

Reputation + Referrals + Repeat Business → Revenue

Let’s break down this equation. You got good at something, and you did good work. That commitment paid off and established your reputation. For this, you were rewarded with ample repeat business and word-of-mouth referrals. As you got more clients, your business grew over time. Sure, marketing and advertising contributed some unknowable amount to the top line, but they always felt like nice-to-haves. Whenever the market turned south, firms would scale back their marketing and advertising investments. But those reliable workhorses, referrals and repeat business, kept on plowing up money.

Today, the world is different. Referrals, for example, will always be an important way professional services firms win new business, but on average, firms only hear from a percentage of firms that get referred their way. . Relying on repeat business? Clients are less loyal than ever, often swayed by the multiple opportunities that present themselves in today’s open (meaning digital) learning environment. So the old formula just doesn’t work the way it used to—and it keeps firms from accessing the many opportunities that a modern marketing strategy makes possible.

Still, many organizations cling to the old ways. Unfortunately, yesterday’s “tried-and-true” has become today’s “tired and false.”

Fortunately, there’s a better way.

A New Formula for Success

Instead of relying on people for recommendations, or instead of wondering what marketing techniques are going to work this time, savvy firms have turned to a new formula to generate visibility, growth and revenue. A formula built for uncertainty and changing times. One that allows you to adapt to the volatile trends, habits and whims that drive buyer behavior.

What is this magical formula? It looks like this:

Research → Relevance → Revenue

That is, “Research drives relevance, and relevance drives revenue.” As you can see, there’s no magic involved (sorry). Instead, it’s a strategy designed to keep you continually well informed about your target audience so that you can remain relevant to them over time. Since most of your competitors don’t employ this strategy, you should have a significant advantage over them.

Let’s explore this equation piece by piece so you can see how it works.

Research Answers Many Questions

What do you really know about your audience? Chances are, your knowledge is built from an assortment of anecdotal evidence and past experiences. There’s nothing scientific about the way you acquired this information, so it’s probably incomplete, inaccurate or even entirely wrong.

Enter research. When you conduct research on your target audience you can get clear, unambiguous answers to important questions. Questions like these:

  • What are your audience’s top business challenges?
  • Where do they look for information to solve those challenges?
  • What criteria do they use when looking for service providers?
  • What do they look for when selecting a firm?
  • What do your clients value most about your firm?
  • How do you stack up against your competitors?
  • How strong is your brand?

Answers are power. Suddenly, you’ll have valuable intelligence into what motivates your buyers and how they look for solutions to the kinds of problems you solve. You’ll also get a wide-eyed look at your competitors—and how you compare.

Of course, any study of your audience captures a moment in time. As time passes, those answers become less and less reliable. To maintain your advantage you’ll need to repeat the research on a regular basis. Try once a year for starters.

Some organizations conduct their own research, and this approach can work. It does, however, have one big downside: Clients are much more likely to provide honest answers to an impartial third party than they are to a member of your firm directly. If you can assure respondents’ that their answers will be kept anonymous, you’ll collect better quality, more accurate data. That’s a lot easier message if it comes from a third party. Also, professional interviewers—the kind you would get with an outside consultant—are trained to follow up with questions and extract more revealing answers.

How Research Drives Relevance

Research unveils your audience’s wants, needs and preferences. The more you understand these factors, the better you can create appealing messages and new service offerings to address them. While your competitors are left guessing what clients want, you bring clarity and certainty to your marketing.

Relevance also applies to your marketing toolset. When you know what channels your clients turn to for information, what they read and what conferences they attend, you can adjust your marketing plan accordingly.

How Relevance Drives Revenue

This part of the equation is pretty straightforward. Once you understand how your audience behaves, and once you’ve built a marketing program that fits those behaviors, you should start receiving more leads and qualified opportunities. And because your messaging and services are better aligned with what buyers are looking for, you should be able to close more of those opportunities, and at a faster clip.

The right knowledge can take you a long way. If your firm’s revenue equation is stuck in the past, I hope this article helps you see an exciting path forward. And in case you’d like even more on this topic, you might want to check out this short and sweet podcast episode, where I was interviewed by Brandi Starr, host of the Revenue Rehab podcast. Brandi is a revgen master and I enjoyed talking through my three Rs of revenue with her. (I also reveal my least favorite buzzword).