Business Referral: Quality Customer Acquisition for Your Agency by Word-Of-Mouth

Business Referral: Quality Customer Acquisition for Your Agency by Word-Of-Mouth

Last updated on by Ted Vrountas in Marketing Agency Tips

Not long ago we blogged about an Agency Management Institute study called Hiring and Firing Insights Report. From it, we learned a lot — like how to nail your first face-to-face meeting and ways to impress prospective clients throughout the selection process.

But before you can do either of those things, you have to first get your name on a business’s shortlist.


According to that report, it all comes down to recommendations:

“Recommendations by business contacts is the most frequently cited source of prospective agency names when organizations are developing their initial list of agencies to consider. Industry experts are second, and recommendations by other vendors or service providers is mentioned by 45% of respondents.”

Three different sources, one important thing: referrals.

So you won’t be surprised to hear that another study from marketing agency, Hinge, indicates that boosting referrals are the number one goal of over 60% of firms.

The good news for them? About 80% of clients are happy to give a recommendation.

But what makes a good referral? How can you use them to your advantage to win new business? And, most importantly, why aren’t you getting them?

We found out all those answers and more after sifting through a new survey from Hinge.

The Referral Marketing Study

Recently, Hinge partnered with NACVA (National Association of Certified Valuators and Analysts) and XPX (Exit Planning Exchange) to administer a report that sheds light on the reasons agencies lose referral business. What they found was surprising; but first, how they did it:

Hinge surveyed 1,168 business professionals spanning many demographics. A few things to note:

To find the answer to factors affecting referrals, researchers asked questions like “How do you get influencers to recommend your firm?” and “What aspect of your reputation is most important?”

We focused on one in particular: “What kills your chances of getting referrals?”

What follows are the answers, along with some takeaways you can use to boost referral business.

1. Absence of visible expertise

If you lack visible expertise, you’ve already slashed your chances of getting a business referral by 51%.

“What the heck is visible expertise?” you ask.

Fortunately, the report breaks down its components. We went ahead and turned those components into mistakes and corresponding action items to help you improve your chances of landing a referral.

Your website is poorly thrown together

How can digital agencies preach the power of online marketing collateral without a well-designed website?

According to Lee Frederiksen of Hinge, your website is where research begins for 80% of your prospects. If it’s not visually appealing, well-organized, and informational, 29.6% of potential clients will completely ignore another’s referral of your agency:

This chart shows marketing agencies how a poor website negatively affects new referral business.

You’re not showcasing high-profile work

Remember the copy you wrote for Microsoft? The marketing app you developed for Universal Studios?

Now’s the time to show it off.

Many agencies, like Cuker, dedicate a section of their website to high-profile projects labeled “Work,” or “Client Work.” Agency Red Door displays some work right on the homepage of their website:

This picture shows marketing agencies how Red Door displays high-profile client work on its homepage to generate referral business.

You have a reputation for doing poor work

There’s no way around this one. Sure, everybody messes up once in awhile, but if you’ve developed a reputation for producing bad work, chances are it’s a recurring thing.

According to Lee Frederiksen, this is huge, because most of your recommendations come from people who only know you by reputation:

“In fact, 81.4% of firms receive referrals from folks they have not worked with directly. These referrals aren’t made in the dark – they’re based on experiences of your firm other than a vendor/client relationship.”

Take pride in delivering positive results, and your clients (and even people you haven’t worked with) will be proud to recommend you.

You’re not giving any love to your agency’s social media account

Today, social media is a powerful driver of purchasing decisions. But, like agency websites, company social media accounts are often ignored for more important client work.

Remember: you’re a marketing agency. If you offer services like website design or social media management, how can you advocate for their importance if your digital marketing collateral is lacking?

Engage with your fans and followers on Facebook, Twitter, Instagram, or whichever platforms your business has a presence on. With so many marketing automation tools available today, “we don’t have the time” is no longer an excuse.

You’re not keeping up with industry trends

For buyers, hiring an agency that’s forward thinking is quite important. Remember, in most cases clients are looking to form a long-term relationship with you. That means they’re trusting your agency to take their business into the future, wherever the industry turns.

If you have yet to AMPlify your blog posts, create a Facebook Canvas ad, or publish your first Instant Article, this could be you. Stay on top of recent trends and experiment with new technologies that affect the way you and your target demographic do business. Your ability to keep up could be what lands you a referral.

You don’t generate quality educational content

Almost a fourth of all buyers — 23.5% — will dismiss a referral because they don’t produce high-quality marketing content.

Quit focusing so much on getting business and spend more time educating your prospects. Teaching them something in a blog post will not only help them solve a problem, but it will position your agency as an authority. According to Frederiksen:

“Buyers do not want to be sold to. They want guidance in solving their problems. We’ve found that nearly 32.9% of prospects do not follow through on a referral because a vendor’s marketing materials focus on selling rather than educating.”

You don’t speak at industry trade shows

If your prospects can learn from you, in their mind you earn some authority points. If your peers can learn from you, that’s a whole different level of authority altogether — and buyers recognize this.

Network with your contacts to see if there might be any available speaking opportunities at next year’s industry events, no matter how small. “Wow” the crowd and record your presentation to use as a pitch for future opportunities.

You haven’t published any relevant industry research

If you’re looking for an example of relevant industry research, look no further than the report we’re breaking down right now. It’s packed with valuable information that agencies can use to land more referral business, and it positions Hinge as a resource advancing the industry with research.

How can you do the same?

Administer your own study, or, build upon another one. Readers always appreciate updated information, so even if your idea isn’t original, it can at least be new.

And if you don’t have all the resources to conduct one in-house, partner with another agency like Hinge has. It sounds intimidating but small-scale studies are not as tough as you’d think.

You don’t contribute to well-known industry publications

For PPC agencies, lawyers are highly sought after clients, whose keywords can reach nearly a thousand dollars per click.

If you wanted to position yourself to get a referral from a legal business, you might consider getting published in the National Law Review or the National Association of Law Professionals.
Finding these publications is easy. Ask someone you know in the business, or simply search “(Name of industry) news” and watch the results pour in.

2. You’ve fostered poor professional relationships

15.2% of study respondents said that your agency’s professional relationships will affect whether or not they follow through with a referral. Let’s dig deeper to find out how.

You didn’t maintain a professional relationship with a previous client

Remember the “Been Burned” population cited in AMI’s Hiring and Firing Report? If not, let us refresh your memory:

These respondents are “much more skeptical about agencies than the other two groups. They believe most agencies pretend to know more about their industry and their business than they do, and that agencies usually don’t give their company’s needs the level of attention they should.”

The group isn’t small. It made up a whopping 34% of AMI’s respondents. If you’re the one doing the burning — not meeting deadlines, advertising your expertise falsely, making off-color comments about a company’s CEO — don’t expect much referral business from former clients.

You didn’t play nice with another service provider

You’re a copywriting agency tasked with creating a drip campaign with a freelance email marketing manager that your client has a former relationship with.

Normally this would be fine, but this particular contractor is a bit abrasive and difficult to work with. Before you snap and tell them to lighten up, remember that these people have the potential to bring you business. Do your best to get along.

3. You’re too antisocial

18% of respondents said that businesses with no social relationships would lose out on referrals. In the report, Hinge explains what these relationships entail:

“Social relationships develop in a wide variety of situations. For example, a social
relationship could include a friend who works for a service provider or a person you
meet at a networking function.”

If you tend to be a bit flaky, you could be hurting your chances of earning a referral from a friend or a business contact. Do your best to keep in touch. Shoot them a “Just thinking of you” email or drop them a line to stay top-of-mind the next time they need to give a recommendation.

4. You’re not using traditional networking techniques

5.3% of participants indicated that by not networking traditionally — at industry events, trade shows, business dinners — you’re minimizing your chances of earning a referral.

The next time you’re tempted to jump on a video call with a prospective client, ask if you can take them out to coffee if distance allows it.

5. You’re a taker, not a giver

Give a referral, and, Hinge’s research shows you’ll get a referral:

“On average, respondents made 7 referrals within the past 6 months while receiving an average of 7.2 referrals. Our analysis shows a strong positive correlation(r=+0.70) between the number of referrals made and the number of referrals received among respondents. In Figure 7, the impact of reciprocity is evident when looking at the top 20% of referral makers compared to the bottom 20%:”

This picture shows marketing agencies how reciprocity positively affects new referral business.

Your turn

By boosting your chances of earning a referral, you can land yourself a lot of new business. What changes will you make to your referral marketing strategy?

Let us know in the comments, then begin creating an informational, visually appealing, referral-generating landing page with one of Instapage’s 100+ expert marketing templates.

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