Word-of-Mouth Referrals and Content Marketing are Inextricably Linked

Cara McDonald, LexBlog’s Director of Marketing, believes that professionals are downplaying the Internet’s role in how they get work. The common rejoinder she hears: “I get my best work through word-of-mouth.” Cara says, “While that may be true in the broader sense — these days the Internet plays a big part in how that word-of-mouth engine works.”

Understanding Cara’s subtle distinction is critical to your business development success. Today’s guest post by Lee Frederiksen, Ph.D., takes a closer look at the role of word-of-mouth in the digital age. Executive summary: At some point in the buying process, 81% of all buyers go online to check out your professional services firm. Either you have a compelling online persona that confirms your prized word-of-mouth referral or you don’t. As Lee suggests, you’d be wise to develop a content strategy that ensures you’re making a positive first impression online.

In Lee’s words:

I’m about to say something that might shock your marketing department: for professional services firms:

Word-of-mouth referrals remain the strongest way to attract new clients, despite the digital revolution.

In fact, in our recent study of 822 professional services consumers, we found that a whopping 71% of buyers still turn to their network when searching for a new service provider, asking a friend or colleague for recommendations. This number far outpaced the other search options mentioned by the buyers in our study. If word-of-mouth referrals continue to be so important in professional services marketing, should companies stop worrying about online marketing? Is the big fuss about online content and social media much ado about nothing? Are these new marketing techniques just gimmicks that will fade away in a few years? The answer is NO.Firms that use online marketing grow faster and are more profitable In another study that we conducted for our book about online marketing, we found that:

• Firms that can generate 40% or more of their leads from online sources grow 4X faster.
• These same firms are also 2X more profitable than firms that obtain fewer online leads.

Why? The results showed that every single one of these high growth companies was employing a variety of online marketing techniques to achieve high growth and profitability. What gives? If over 70% of consumers use word-of-mouth referrals to find professional services firms, why are companies that invest in online marketing and lead generation practices doing so much better than other firms?

For B2B consumers, all roads lead online

Here’s the answer: even when a consumer gets a word-of-mouth referral from a trusted friend, chances are very good that he or she will go home and check out that company online. This scenario is borne out by several relevant facts:

1)    B2B consumers are taking more control of their own buying process In a recent study of over 1,400 B2B consumers, the Corporate Executive Board found that 57% of a typical purchasing decision occurs before the buyer has a conversation with a service provider. Consumers are increasingly using online tools to perform research, find their own solutions to business problems, and price out various options before seeking out a provider.

2)    Most consumers now use search engines to make buying decisions For their 2012 Digital Influence Index, Fleishman-Hillard and Harris Interactive found that 89% of consumers rely on Internet search engines to make purchasing decisions for products and services. The consumers surveyed included both B2C and B2B buyers. If you look again at our chart at the top, you will notice that 11% of buyers skip the referral step altogether, going straight to online search as their primary method of finding a professional services firm (and we expect this group to grow rapidly as the younger digital generation starts to take on more leadership roles). If we consider that 11% of all buyers search online for firms, and 71% of all buyers start off by asking friends but then follow up with online research, it means that:

At some point in the buying process, 81% of all buyers are going online to check out your firm.

Why content marketing matters

The takeaway is that firms have everything to gain by using online content to make the best first impression possible. Today’s buyers are increasingly sophisticated. While getting a referral from a trusted friend might start the ball rolling, the consumer will go home and do some more research. They will probably give your website a drive-by. Maybe read a few blog posts and look to see if you’re active on their social channels. They’ll even spend a few minutes on Google to see what pops up about your firm—positive or negative. All of this comes back to content marketing. Firms that have committed themselves to consistently offering free, valuable information to their target audience via the web are the firms that are achieving the highest growth and profitability. Firms that ignore content marketing are living in the past, which is no place to live at all.

About the Author Lee W. Frederiksen, Ph.D., is Managing Partner at Hinge, a marketing firm that specializes in branding and marketing for professional services. Hinge is a leader in rebranding firms to help them grow faster and maximize value. Last April, Lee wrote on this blog about how professional blogging translates into new business. I recommend you read that post. Lee can be reached at LFrederiksen@hingemarketing.com or 703-391-8870.