Referrals are drying up: Here’s how to replace them

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Accounting practices have traditionally relied upon referrals for new business. A good word dropped by an existing client or a friendly banker were surefire ways to drive new business and grow an accounting firm. Times are changing, however, and this tried-and-true business development strategy no longer has the pulling power it once did.

The Hinge Research Institute recently released a new study on professional services buyer behavior that provides insight into how professional services are bought and sold. It reveals an overall decline in actual referrals, despite the fact that clients are still very willing to refer and increasingly value their service providers as instrumental in their success.

One possible reason for this decline is that more and more buyers are searching for service providers in other ways. In 2013, more than 70 percent of buyers reported turning to their business network when they needed a new service provider. While referrals remain the top search method, less than 60 percent of today’s buyers ask for referrals — a 15 percent decrease.

Instead of relying upon referrals from friends or colleagues, buyers today are putting the power of the internet to work and using the web to find and research potential service providers. In fact, web search is becoming an increasingly popular discovery tool, with nearly one in five buyers turning to search engines to find service providers. Soon, search engines could be the top referral source for professional services.

If your firm is relatively new to the digital marketing world, the prospect of turning to social media, online marketplaces, blogs and websites to market your firm may seem scary. The truth is, though, there are lots of opportunities online for promoting your accounting business. You just have to know a few key things to get started:

1. Focus on being visible in digital channels. Savvy, fast-growing accounting firms are leveraging a multi-channel presence to gain maximum visibility in their marketplaces. Here are a few popular digital strategies:

Social media marketing: Some of the popular social media marketing platforms include LinkedIn, Facebook and Twitter, to name a few. The platforms you choose depend on whether you’re looking for business or consumer clients, as well as other factors including your firm’s business goals, target industries/markets and target audience personas. But don’t assume you know where your prospects go. A little research goes a long way.

Content marketing: Content is central to all digital marketing campaigns and activities. Content marketing involves promoting various pieces of high-value content to your target audience via several digital marketing channels. What’s most important for content marketing to work is that the eBooks, executive guides, infographics and other high-quality content produced is objective, non-sales-oriented and of direct value to your target audience. This will help promote your firm as a thought leader and prompt prospects to provide contact information to receive your content and begin to engage with your firm.

Search engine optimization: This strategy involves getting your website or specific web pages to show up on search engines when specific keywords and terms are used as search terms. SEO can help your firm rank higher in search results and gain visibility across search engines, markets and geographies. Importantly, both content marketing and social media work together to drive your SEO.

Email marketing: Email campaigns go hand-in-hand with content marketing as a proven method for promoting high-value content. It’s a low-cost, effective method for building brand awareness and generating leads when done correctly. Use email to nurture prospects until they need a new accounting firm.

2. Fund digital marketing efforts by reducing less effective strategies. Studies have shown that traditional promotional efforts such as trade shows, event sponsorships and personal networking are growing increasingly less effective. Time-crunched business professionals are spending less time and effort on traditional information-gathering methods such as attending conventions and business association meetings and more time researching service providers online.

3. Make your expertise visible by sharing it. Central to any digital marketing strategy is the need to gain competitive advantage by promoting expertise. Every business wants to work with an expert in whatever area for which they need help. By promoting the expertise of key individuals within your firm, they — and your firm by association — become what we call “Visible Experts.” Visible Experts can achieve that status by focusing on either a specific area of expertise — say, accounting services for the manufacturing industry — or a specific topic, such as revenue recognition or R&D tax credits.

Regardless of your firm’s area of expertise, it’s crucial to share and promote that expertise through content that provides relevant, objective, actionable information of value to your target audience.

There is no question that the accounting field is becoming more competitive every year. To successfully grow a profitable accounting practice requires a constant, focused effort to reach and engage prospects. As traditional business development methods grow less and less effective, digital marketing strategies are replacing them as the pathway to success.

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Client acquisition Referrals Business development Social media Digital marketing