Online marketing has its roots in consumer and product marketing, so it is not surprising that the professional services have been slower to embrace it. Today, many firms continue to believe that finding new clients is all about relationships and referrals. Well, a new study of online marketing for professional services firms is blowing that theory right out of the water.
This study of 500 firms, supplemented by an expert panel of 20 top digital marketing authorities, uncovers dramatic evidence that could accelerate firms’ adoption of online marketing techniques. Below are seven key findings from the study, which our research team released last week:
1. Firms that generate at least 40% of their leads online grow 4X faster than firms that do not generate any online leads.This fact alone gives firms that embrace online lead generation a tremendous competitive advantage. But the old ways of generating business aren’t obsolete yet. The highest growth rates occur when there is a balance between online and offline leads (40-60% of leads from online sources).
2. Increasing online lead generation boosts profitability for the entire firm.Profitability doubles in firms that generate 60% or more of their leads online. So online lead generation accelerates both growth and profitability. As far as we have been able to determine, this is the first time that correlation has been documented in the professional services.
3. The effectiveness of online marketing is directly related to the level of usage.We asked the firms to rate 15 popular online marketing tools on two criteria: how much they used them and how effective they were. We found that firms that used the tools more frequently enjoyed better results. Obviously, you can’t dabble in online marketing techniques and expect solid results.
4. Search engine optimization (SEO) and content marketing are driving the success of professional services firms.In terms of overall effectiveness, SEO was rated the top technique by study participants and our panel of experts, followed closely by web analytics, blogging, usability testing and whitepapers.
This is a powerful combination, and it is well suited to the habits of professional services buyers. Professional services markets are typically very competitive, and the sales process is complex. As a result, buyers are actively seeking education and information. So sellers need a way to be found and distinguish themselves.
5. Social media for the professional services is dominated by LinkedIn and Twitter.These two tools are well established in many firms. YouTube and Facebook have potential, but today they lag well behind in rated effectiveness.
6. Online marketing is also useful in recruiting new employees.Recruiting top talent is an ongoing challenge for many professional services firms. After all, their people are their product. About 55% of firms report recruiting new hires online, while one in four firms hire 40% or more of their people that way. Digital recruiting is particularly strong in the government contracting and technology sectors.
7. Online marketing in the professional services is poised to take off.Consider this. Almost half (46%) of professional services firms have redesigned their website in the last year. For firms that fit our “high growth” profile, the figure is over 85%. In addition, two thirds of firms plan to increase their online marketing budget next year, while less than 1% plan to decrease it. And the average increase in online spending is a hefty 56%. Clearly, momentum is building.
So what does this all mean for professional services firms? I see three big implications.
First, if your firm is not generating new business or new hires from online sources, you are missing out on huge opportunities for growth and profit. Sticking with traditional marketing tactics is not going to be a sustainable strategy. While relationships and referrals remain important, they are — literally — only half of the picture.
Second, even if you are actively involved in online marketing, you have more to do. While there are no silver bullets, the study’s high growth firms and panel of experts revealed many opportunities for average firms to enhance their marketing effectiveness, including SEO, usability testing and webinars.
Third, if you are not aggressively investing in online marketing, you are falling behind. This situation will put you at a growing disadvantage as other firms increase their budgets and, in due course, enjoy greater profits and faster growth. As time passes, it will get more costly and difficult to catch up.
The good news is that it is not too late to get in the game. But the results of this study underscore the need to act quickly. The ROI is there. The model is proven. And the momentum is shifting.
Lee Frederiksen is Managing Partner of Hinge, a firm specializing in branding and marketing for professional services. Lee, who was the Research Director for the online marketing study described in this post, welcomes your comments and feedback.