Referral Marketing: How It Works [Video]
In the first video of this series on referral marketing, Liz Harr talks about a concept that’s familiar to all of us in professional services when it comes to generating leads, and bringing in new business. Referral marketing.
Hi, in this video series, I’m going to be talking about a concept that’s familiar to all of us in professional services when it comes to generating leads, and bringing in new business. But it’s something that has taken a twist, a profound twist in recent years. What I’m talking about is referral marketing.
Now, probably all of us in professional services can point to a handful of new business, new leads that came to us because somebody referred to us, and it continues to be that way. In fact, in a study that we did on referral marketing, we asked buyers, so people like your prospective clients, my prospective clients, how are they finding out about firms like you and me, and turning to their peers, turning to their network and asking for a referral, continues to be at the very top.
In other words that’s the first thing they do. But what’s interesting is asking for a referral, turning to your network, turning to your peers and seeing who they know, is actually on a decline. It’s declined over 15% in fact over the last several years of us doing this research.
But take a look at the third bar on this chart. Online search. That has actually increased by 80% over the same time period. Now, what that means is referrals that will always be part of how professional services business is done, but the traditional way is changing. So, let me talk to you about what that means.
When we think about referrals, of course there’s the tried and true method of somebody has had an experience working with you. They liked it and they refer you. That’s experience-based referral. But there’s another type of referral, and this is that shift that I was talking about at the beginning. It’s called reputation-based referrals.
What it means is, you can get referred without even knowing it, without ever having worked with somebody simply based on your reputation. Now, this actually is not, it’s not just a notion that we’re wondering about. This is a reality, and 82% of experts have received a referral in this way, from someone they’ve never ever worked with.
Well how does that work? A very small part of it comes from people having met you. Maybe they met you at a networking event, they saw you speak, something in that regard, but the vast majority comes from your reputation and the visibility of that reputation around expertise. So you get published, you speak, your website is found in online searches.
So this all ties back to that very first chart that we saw where traditional referrals, asking your network who they know, that maybe on the decline, but you can bet that you’re getting referred based on how visible your expertise is, whether it’s you show up in online search, or you publish or you speak.
And let’s put that into numbers, 61%, the degree to which your expertise is visible, it generates 61% more referrals than just your general reputation. Now this makes a lot of sense.
If you’re generally known as a great company with great people, it’s kind of hard for someone to refer you and make a strong recommendation about what you can actually do. What if your reputation, as opposed to just being generally a great firm, was around a niche expertise. That’s when you get the strong referrals and when your referrals actually work. Now, if you would like to learn more about this, check out our course in Hinge University on Referral Marketing.
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