Professional services firms rely upon a variety of marketing channels to gather leads, attract new clients, and encourage other professionals to refer their firm. Many see event sponsorships and the networking functions associated with them as effective ways to build visibility for their firms, score face time with key individuals who influence prospects, and win referrals.
They couldn't be more wrong.
The Hinge Research Institute recently conducted a survey of almost 1,200 managers and c-suite professionals in a wide range of industries -- the individuals most likely to influence business referrals -- and the results published in our Referral Marketing Study may surprise you.
The survey revealed that sponsorships and the networking events associated with them were the least effective ways to influence referrals. In fact, less than one percent of respondents learned about the agencies they referred through sponsorships, and only 3.4% found networking events effective for finding and recommending potential service providers.
The Problem with Sponsorships
So why don't sponsorships work? While they can contribute to your brand awareness, they are lousy at conveying your agency's value proposition. Printing logos on cocktail napkins and tournament signage has zero value if the individuals who see them have no idea what you bring to the table.
Sponsorships only make sense if they present a valuable "pay-to-play" opportunity -- for instance, allowing you to speak to a group of influencers. Sponsorships may also provide some benefit if they demonstrate your involvement in a group that's crucial to your business. In either case, you'll want to use your participation to improve your agency's visibility. That could mean securing a speaking engagement or an article placement as part of the deal.
So if sponsorships are such a poor source of referrals, what does work?
How to Get Referrals Without Sponsorships
Take a look at the following graph. There are a number of referral techniques that can yield significant results, starting with reciprocity. Our studies revealed that the more firms referred others, the more referrals they received in return.
Social and professional relationships can also be valuable referral producers. The best relationships are those that combine both social and professional interactions. However, the study found social relationships had little effect on referrals if there was no associated direct knowledge of expertise. Like sponsorships, if your contacts don't know what you do, they aren’t going to refer you.
By far, the greatest source of referrals is what we call Visible Expertise -- the degree to which people in your firm are well-known industry experts. Individual experts develop this kind of visibility by speaking at industry events and publishing valuable thought-leadership pieces in trade publications, newsletters, and online.
Another Hinge study focusing on the best practices of high-growth professional services firms discovered that the five top marketing techniques that yielded the greatest return were, in order:
- Speaking engagements
- Blog posts and articles
- Social media
- Book or other signature content
- Online presence
An inbound marketing strategy is the clear winner for demonstrating expertise, building visibility and value for your firm, and influencing key professionals to refer your company to others.
So the next time your firm is offered a sponsorship opportunity, you might want to politely pass on it -- unless it presents a solid opportunity to secure a lucrative speaking engagement in front of a group of business influencers.