New Study Highlights: How Buyers Buy Professional Services
By Aaron Taylor
What makes your clients and prospects tick? Why do they choose one firm over another? And what makes some companies leave for a different service provider? A new study released last week by my colleagues at the Hinge Research Institute answers these questions and more.
Unlike our original 2009 buyers study which looked at all industries in aggregate, our current study has been released as individual industry reports. I encourage you to download the report for your industry, as results vary by vertical (check out the links at the end of this article). In the meantime, I'd like to share a few highlights of the overall study.
The study surveyed 822 buyers and 533 providers of professional services. The buyers were clients of the sellers, so we were able to look at the relationship from both sides. We sought to answer a number of key questions about buyer behavior.
How Do Buyers Find You?
Not surprisingly, the most common way buyers find a new firm is by asking another person. In fact, this happens 71% of the time. But the next most common approach (11% of the time) is to search for a firm online. We expect this trend to grow, perhaps dramatically, as service firms become more sophisticated at marketing themselves online and as buyers become more adept at evaluating firms' expertise based on online evidence, such as specialization, expert content, thought leadership, case studies and client lists.
What Do Buyers Value Most?
Our research tried to uncover what attributes buyers found most attractive when evaluating professional services firms. The chart below illustrates the tremendous importance of expertise and specialized skills in the firm selection process. Having good connections is also very helpful. And firms that can demonstrate that their services have a positive financial impact on their clients also have an advantage.
Figure 1. Top Value of Benefit of Service
As you can see in Figure 2 below, buyers and sellers often have very different perceptions of what is important when they make their final selection from a group of candidate firms. Of course, the buyer's perspective is the one that really matters. Let's run down some of the key takeaways.
- Having a good reputation is the single most important characteristic.
- Cost is not usually the deciding factor; it tipped the scales only 8% of the time.
- Interestingly, past performance and experience were valued significantly less than reputation. This tells us that perceptions and brand are critical to market success.
Figure 2. Tips the Scale for Winner?
Will Clients Buy From You Again?
In our study, clients were much more likely to stick with a firm for multiple years in the accounting & finance and A/E/C industries than in management consulting or technology services. While it doesn't explain these industry variances, our data showed that although 79% of buyers would like to buy more services from their current provider almost of half of these buyers don't know what services their provider offers. Clearly, professional services firms can do a much better job of helping their clients buy from them.
What Drives Referrals?
Referrals have always been the lifeblood of professional services firms. And our research demonstrates that referrals are alive and well. 69% of the buyers in our study indicated that they are very willing to recommend their service provider. But many companies never make a referral. Why? Almost three quarters of the time the answer is simple — nobody asked them for one.
The Brand Problem
Figure 3 clearly illustrates a weakness in most professional services brands. A brand can be measured on two axes: reputation and visibility. While most firms do relatively well on the reputation front, they struggle to establish substantial visibility.
Figure 3. Reputation vs. Visibility Perceptions
So that covers some of the broad questions addressed by our new study. To get a more nuanced understanding of the issues and to learn how buyers of your services behave, check out the in-depth study for your industry. They are available free of charge.
- Technology Services
- Management Consulting
- Accounting and Financial Services