If there is such a thing as marketing dogma in professional services, it is that cultivating personal relationships is the best way to market. “It’s all about relationships” is the battle cry.
The influence of this belief is pervasive. Many, perhaps even most, marketing budgets are built around networking opportunities and personal contact. Golf outing, anyone?
But is it true? Is developing personal relationships the best way to market professional services?
Reputation vs. Relationship
As it turns out, there is an answer to this question. We recently conducted a major study of professional services buyers (Buyers) and the professionals who sold services to them (Sellers). The 822 Buyers were matched with 533 Sellers to allow us to look at both sides of the relationship.
As part of the study we asked both Buyers and Sellers to identify the best way to market professional services to the Buyers. The results were both clear and compelling.
Reputation Trumps Relationship
Figure 1 tells the story. By a wide margin (47% vs. 27%), professional services Buyers identified developing a reputation for producing results as the best approach and more effective than developing a personal relationship with them.
Figure 1. Best Way to Market as Identified by Buyers and Sellers
The view of the Sellers is also very revealing. While their view of the value of a personal relationship was quite similar to that of the Buyers (25% vs. 27%), there was a big perception gap around the value of reputation marketing. Buyers were over 3X more likely to cite reputation than were Sellers (47% vs.14%).
The dominance of reputation over relationship doesn’t stop there. We also looked at what factors tipped the scale in the final selection of the services provider. Here again reputation more often proved to be the deciding factor, albeit by a smaller margin (21% vs. 18%).
Why Reputation Marketing Matters
Why is reputation so important for professional services? On one level it is quite simple. Put yourself in the Buyers' shoes.
You have an important challenge facing your organization and you need professional help to solve it. You have narrowed down potential vendors to two firms. One is well known as being the best in the business at solving that very problem. The other is one with which you have a good personal relationship with one of the partners but they have no reputation for solving your important challenge. Which firm would you choose?
In most cases Buyers have no direct way to assess the competency of a firm. They are compelled to rely on indirect indicators, such as reputation.
Perhaps your golfing buddy could solve your problem. But are you willing to take the risk? What if you are wrong?
Unseating an Incumbent
One of the biggest challenges facing a professional services business developer is how to unseat an entrenched incumbent. It is usually very difficult to overcome the familiarity and trust established in an existing relationship.
But the data points to a possible approach. Of all the potential marketing approaches, developing a reputation for producing results is the most likely to be successful.
No wonder reputation marketing is gaining so much favor.
Do Relationships Still Matter?
Of course they do. After you develop a reputation for producing results your personal relationships are the next most important criteria for the final selection. And in some specific circumstances your personal relationship may well be more important.
The point is not to ignore relationship development. Rather it is to recognize the value that reputation marketing can play in the overall mix.
Remember that your reputation and your visibility are the essence of your brand. The new research gives a clear indication of just how important that brand can be in developing new business.